Divorce: What is a fair way to divide property?


It is a logical assumption that when two people decide to go their separate ways after being married for a period of time that their assets should be divided equally between them. While that often is the case, there are plenty of exceptions to this ‘rule’.

Just a short time ago, UK divorce law was written in a way that assumed that married women had no means of supporting themselves, because that was usually the case.

It was only recently that these laws were reformed to more accurately reflect modern societal standards, due largely to the efforts of lawyers and civil rights groups.

Before any other factors are taken into consideration, a 50/50 split is a reasonable benchmark to start from. The judge must then consider a large number of different points before making a decision, some of which include:

  • Did the couple have a prenuptial agreement and does the judge agree that it is a fair agreement? Prenuptial agreements have some power, but they do not allow a wealthy spouse to neglect the welfare of a poorer spouse by divorcing them.
  • Who is the petitioner and who is the respondent? If there is going to be an imbalance in the split, it will be more likely to be in favour of the petitioner, as the other person will be regarded as being “at fault”.
  • What are the grounds for which the divorce is being sought? If the reason for the divorce is abandonment, neglect, or cruelty, then the division is likely to be greater than if the divorce is being sought for more trivial reasons.
  • Are there any children, and if so, who will be the primary carer of them? The law will want to ensure that the children are not merely able to survive, but ideally that their standard of living is not too greatly affected as a result of the divorce.
  • Which partner had the most wealth prior to entering into the marriage? Contrary to what many people think, the law does not necessarily want to see people lose substantial amounts of the wealth they owned prior to marriage.
  • What is the difference in income between the two parties? If one person earns substantially more than the other, they may have to pay a portion of their income to the other person until that person either remarries or has a significant change of circumstances. Normally for this to be considered, the affected party must have applied for ancillary relief, periodical spousal maintenance payments, or an interim order for Maintenance Pending Suit.
  • Does either of the parties have an illness or disability that may affect their long-term earnings capacity? If yes, then it is likely that the balance will tip a little more in their favour, unless of course both parties to the divorce have such conditions. In very complex situations the judge may have to consider not only the present state of an illness or disability, but also the potential progression of that condition. If this may apply to your situation, it is important to let your legal consultant know so they can help you make sure that the judge takes this into consideration.
  • Are there any other special circumstances that will need to be addressed? For example, a husband and wife may have jointly invented something, but only one of them applied for a patent. Such situations will add a new layer of complexity to the proceedings, and may even result in the requirement for the new matters to be dealt with entirely separately to the divorce hearing.

Judicial discretion is quite powerful, but judges must rely on the written law and attempt to justify their discretionary decisions within the scope of the written laws.  Sometimes the written laws are framed in such a way that even if the judge wants to make what he or she views as a fair decision, the law makes it difficult to do it precisely.

Let’s take a look at a few case study examples, to try and see how the law gets applied in different situations.

White vs. White, 2000

This is an important divorce law case for several reasons. One of the important things to take note of from the opening remarks of the case (which you can read here) is that it sets out the official position that the judiciary would like to be seen as taking in such matters, thusly:

Everyone would accept that the outcome on these matters, whether by agreement or court order, should be fair. More realistically, the outcome ought to be as fair as is possible in all the circumstances. But everyone’s life is different. Features which are important when assessing fairness differ in each case. And, sometimes, different minds can reach different conclusions on what fairness requires. Then fairness, like beauty, lies in the eye of the beholder. – Lord Nicholls of Birkenhead, 26 October 2000 (White v White).

In particular, Lord Nicholls takes the position that when a divorce court is considering matters beyond mere subsistence of the parties involved then it is a “big money” case and that courts should not apply broad discretionary powers in such matters.

In making his final decision, Lord Nicholls placed great emphasis on the interpretation of “financial needs”, particularly with regard to what the wife was claiming as her entitlement. Lord Nicholls pointed out that some judges were stretching the meaning of this phrase too liberally. In his view (to paraphrase), the term should be reserved in meaning for circumstances involving:

  • Financial obligations, such as the repayment of debts, or the payment of taxes, etc.
  • the ability to provide a roof over one’s head (without necessarily having to downgrade)
  • The ability to purchase sufficient food, clothing, fuel, etc.

In summing up, Lord Nicholls stated:

Mrs White criticised the use of net values, arrived at after deducting estimates of the costs and capital gains tax likely to be incurred if the farms were sold. Mr White still owns and uses the farms. The farms have not been sold. Counsel submitted that the use of net values in this situation should be discontinued. I do not agree. As with so much else in this field, there can be no hard and fast rule, either way. When making a comparison it is important to compare like with like, so far as this may be possible in the particular case.”  – Lord Nicholls of Birkenhead, 26 October 2000 (White vs. White).

The meaning of this ruling is that it does not help to ask the court to award you a larger sum on the basis of need unless that particular need can be established within the narrow definition provided by Lord Nicholls. Therefore, if your argument were that a 50/50 split would place you in a position of hardship and you could demonstrate that, it would be taken into account. On the other hand if your argument were that you wanted to invest in some sort of opportunity where you “needed” a certain minimum amount in order to make the investment, the court would be unlikely to agree that there was a legitimate circumstance of need.

McCartney vs. Mills, 2008

In this famous case where Sir Paul McCartney divorced from his wife Heather Mills after a four year marriage, there certainly was not a 50/50 split, and Ms Mills ended up being awarded less than 10% of what the court estimated Sir Paul’s net worth to be.

Ms Mills expressed dissatisfaction with only being awarded £24.3 million, but stated that she would not appeal the decision. From her comments it seems likely that, given the opportunity, Lord Nicholls would have verbally chastised her for having a skewed view of need, and it also appears that she may not have been in the habit of making her own travel arrangements.

In this case, the couple had a four-year-old daughter, and there was a vast discrepancy in the net worth of the two parties to the divorce. What very clearly separates this ruling from White vs. White is that in the former case both parties had made an approximately equal contribution to the accumulation of wealth and the court eventually awarded an almost 50/50 split, while in the latter case there was nowhere near an equal contribution between the two parties, and the vast majority of the wealth had been accumulated by one party before the marriage, so the court awarded a roughly 94/6 split.

Hohn vs. Cooper-Hohn, 2014

This is another case involving enormous wealth where one partner was considered to have made a substantially greater contribution than the other. In this case the wife was trying to claim a portion of assets accumulated after the couple had already separated.

Not surprisingly, she was unsuccessful in establishing either entitlement or need to access that money.  In the end the award was approximately 65/35 in favour of the husband.

The judge’s remarks indicated that her decision was at least partially based on the fact that the extraordinary wealth had been accumulated primarily as a result of Hohn’s skill as “a financial genius”.

Thus it can be concluded that effort is one criteria in determining input, but so too is specialist skill and knowledge.

Although it does not apply in this case, it could be assumed that if two parties made an equal contribution of effort in an enterprise of any sort but one party could not have succeeded without the input of skill from the other party (where the converse is not also true) the court will take that into consideration.

Critchell vs. Critchell, 2015

This is going to be a very important case in future divorce decisions. In the majority of cases the court only wants to consider the division of assets that were accumulated during the marriage. Critchell vs. Critchell was unusual because it was a situation where if a 50/50 split of only the matrimonial assets was awarded, the assessed financial needs of both parties could not be met.

In this case, both parties were the polar opposites of Hohn and Cooper-Hohn in terms of wealth. After the couple separated, the husband moved out of the family home and purchased another home in his own name using borrowings of £148,000. The wife was earning a part-time salary supplemented by working tax credits, and the husband was running a small business but earned only £5,000 from it also supplemented by working tax credits.

The matrimonial home, which the husband vacated to the benefit of the wife, was valued at approximately £190,000 and there was an outstanding mortgage on the home of just £10,000. The husband’s new home, on the other hand, was valued at £148,000 and had an outstanding mortgage debt of £63,000 and additionally the husband was in debt to his own father on a private loan of £85,000.

Neither party had substantial earnings and the wife was taking care of the former couple’s two teenage daughters. The court also had to take into account that the low earnings of the husband were due to an acquired injury, but that the husband had also testified that he expected to recover both physically and financially.

In view of all the evidence, the judge attempted to pass what appeared to be a fair ruling that took into account all of the special circumstances of the case. In fact, if you examine the details of the case, you will find that this was a singular act of judicial genius with respect to the facts as they stood at the time of the decision.

The gist of the original ruling was that the matrimonial home would become the sole property of the wife and that she would have to take over responsibility for the repayment of the outstanding £10,000 owed on it. The judge then further ordered that the wife would at some point in the future have to pay 45% of the value of the home to the husband (there was a somewhat interesting loophole in this decision which could have meant the wife never had to make the payment if she never remarried and her youngest daughter never completed secondary education).

Then the whole situation suddenly got interesting!

Within less than a month of the ruling, the husband’s father died. Instantly £85,000 of the husband’s debt was wiped out, and he inherited a further £180,000. This meant that even after discharging all of his debt, the husband would have £117,000 left over.

When the original ruling was made, the judge had made all of the provisions on the basis of the financial needs of both parties. The sudden unforeseen event that resulted in the inheritance completely changed the financial needs of the husband, while the financial needs of the wife remained the same.

The wife appealed, and the court upheld the appeal on the basis that the net wealth position of the parties had effectively been reversed due to the windfall that the husband received. The requirement for the wife to pay to the husband 45% of the value of the home was then nullified.

Exactly why the husband or his solicitor subsequently felt that this entirely fair decision should be challenged is a bit of a mystery. He no longer had any need of the relief granted to him in the original ruling, and yet he sought to obtain it anyway. It is not surprising at all that the court did not uphold the ultimate appeal.

The crucial factor in the success of the wife’s appeal is in the timing. If the windfall even had occurred a year or two later, the court would almost certainly not have been able to take it into consideration.

This is one of the reasons why we always urge our clients to get in touch with us immediately when they become aware of any change in circumstance that may affect their legal position. Timing is paramount in law, and Critchell vs. Critchell is a great example of this.

Summing Up

From each of these case studies we can see that the courts do try to make fair decisions, but there are many variables that can affect the outcome. Appeals are available but should not be abused.

The complexity of divorce cases and the ease of accidentally overlooking some piece of evidence can end up costing you thousands of pounds. It is therefore not a process you should attempt to enter into alone.

Hylton-Potts can and will help you if you are involved in a divorce. Call us on 020 7381 8111 or email [email protected] for further information about the ways we can assist you.

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