How Court decides Finance cases Section 25 Matrimonial Causes Act
The Law which sets out how Divorce and Financial cases are dealt with is the Matrimonial Causes Act 1973,
So far as financial division is concerned, Section 25 is the part of the Matrimonial Causes Act where the principles that the Court applies in deciding cases are set out.
I have reproduced the Section here in Olive italics; my notes are in normal type and grey.
What Section 25 says
Matters to which court is to have regard in deciding how to exercise its powers under ss. 23, 24 and 24A.
I have not reproduced sections 23, 24 and 24A. Basically, these set out the different sorts of orders that the Court can make. For example, a Lump Sum Order, a Transfer of Property Order, a Maintenance Order, Pension Sharing Orders etc.
Is to have regard means must have regard.
(1)It shall be the duty of the court in deciding whether to exercise its powers under section 23, 24, 24A or 24B] above and, if so, in what manner, to have regard to all the circumstances of the case, first consideration being given to the welfare while a minor of any child of the family who has not attained the age of eighteen.
The Children’s welfare is the first consideration. This is not quite the same as “Paramount” which is the importance of welfare when the children’s arrangements are under consideration in proceedings under the Children Act. Nevertheless the children come first. They need a home and they need to be supported.
(2)As regards the exercise of the powers of the court under section 23(1)(a), (b) or (c), 24 , 24A or 24B]above in relation to a party to the marriage, the court shall in particular have regard to the following matters—
Here are what are known as the section 25 factors;
(a)the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire;
(b)the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
(c)the standard of living enjoyed by the family before the breakdown of the marriage;
(d)the age of each party to the marriage and the duration of the marriage;
(e)any physical or mental disability of either of the parties to the marriage;
(f)the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family;
(g)the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it;
(h)in the case of proceedings for divorce or nullity of marriage, the value to each of the parties to the marriage of any benefit . . . which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.
Which will be most important in a particular case will depend on the facts of that case. Like the “welfare checklist” of the Children Act, they are in no particular order. One or more will often emerge as being more significant. All cases turn on their facts. This means that the Judge has a lot of discretion.
That said, conduct is rarely a factor. The rules about the use of conduct as a factor mean that the Judge must give permission for evidence to be filed alleging relevant misconduct and the Judge must be satisfied that it really would be Inequitable (the Oxford Dictionary Online defines this as; unfair; unjust). The Court is generally more interested in financial misconduct. The process of claiming conduct adds quite a layer of further costs. Sometimes of course conduct is very relevant, but most often whilst one may have misbehaved in some way in the eyes of the other, it would not to be to the level required.
There is then a further checklist of factors which applies to the making of Orders which relate to children;
(3)As regards the exercise of the powers of the court under section 23(1)(d), (e) or (f), (2) or (4), 24 or 24A above in relation to a child of the family, the court shall in particular have regard to the following matters—
(a)the financial needs of the child;
(b)the income, earning capacity (if any), property and other financial resources of the child;
(c)any physical or mental disability of the child;
(d)the manner in which he was being and in which the parties to the marriage expected him to be educated or trained;
(e)the considerations mentioned in relation to the parties to the marriage in paragraphs (a), (b), (c) and (e) of subsection (2) above.
(4)As regards the exercise of the powers of the court under section 23(1)(d), (e) or (f), (2) or (4), 24 or 24A above against a party to a marriage in favour of a child of the family who is not the child of that party, the court shall also have regard—
(a)to whether that party assumed any responsibility for the child’s maintenance, and, if so, to the extent to which, and the basis upon which, that party assumed such responsibility and to the length of time for which that party discharged such responsibility;
(b)to whether in assuming and discharging such responsibility that party did so knowing that the child was not his or her own;
(c)to the liability of any other person to maintain the child.]
But before the Court can decide how resources are to be fairly divided, all the relevant financial information needs to be gathered.
The law is both simple its objective of achieving a fair solution, and it is also very complicated. The Higher Courts make decisions in disputed “big money cases” , but these are often, but not always, of limited help in trying to sort out solutions for more ordinary family’s. Most cases are driven by needs; but what is a reasonable need?
A fair solution can mean something around 50/50, but very very often it does not. Also, there can easily be a range of solutions which could give a fair outcome.
In our view nobody should enter into any financial agreement in Divorce, without first taking Legal Advice.
Mediation is an excellent process. But it needs to be supported by Legal Advice. A Mediator who is a practicing Solicitor should be better placed identify issues where specific advice is needed, to enable the participants to make informed decisions.