"Big money cases" make up most of the published judgments in the Financial Remedies Court. Though the law that applies is the same regardless of the money involved, the level of judge or whether the case is in the County Court or High Court. The applicable law being the Matrimonial Causes Act 1973 and the 8 factors listed in s25(2) of the Matrimonial Causes Act 1973.
The application of these factors is different depending on whether there is wealth or not. Whether or not their is sufficient wealth to meet the needs of both parties as opposed to there not being enough money in the Matrimonial pot to meet both parties needs. This is, a simplistic view.
How do Judges achieve fairness in Small Money cases in Financial Remedy proceedings. Small money cases differ for many people. I refer to a small money case where there is insufficient money to meet even the basic needs of the parties. These cases require an intense focus on how to stretch resources in creative and careful ways. The court will have regard as to what each party can raise by way of mortgage or welfare benefits that one or both may be relying upon or crystal ball gazing (in some cases) about future earning capacities. Sometimes it may be minimum wage levels where a spouse has not worked for some time and now has to do so.
Where there are limited assets there can be a degree of risk taking to try to find a solution where both spouses are able to rehouse themselves.
It would greatly assist those representing themselves if these small money cases were made public. Whereas, big money cases can not only be published as legal judgements buts sometimes make "headline" news. This would help by seeing how judges are applying the s25 factors and attempting to achieve fairness, in the most difficult cases where the outcome can be intensely difficult for both spouses. Everyone could learn from some judges who are able to achieve fairness in creative ways or those who do not. It would also help to identify differences in regional approaches.
A recent report estimates that 41% of all financial remedies cases involve net assets of less than £250,000, and 83% of under £1 million. 75% of all ‘contested’ hearings (those which lead to judgments being given) came in under the £1 million mark. £1 million is not a ‘small’ sum, but it is worth remembering that much of this figure is likely to be the equity within a parties’ family home (in Southern Cases) and the values (often significant) attached to either party’s pensions.
When they go to court, these everyday cases fall by default upon the shoulders of the 400+ District Judges sitting in England and Wales, or their part-time Deputy colleagues.
Two small money judgments
To see how we might benefit from more everyday or ‘small money’ judgments, we can look at two financial remedies final hearing decisions made by District Judges (in this case Deputy District Judges) published on Bailii.
Neither judgment gives us any particular reason why it is being published; both are anonymised as is (currently) standard practice.
ND v LD [2022] EWFC B15 (10 March 2022):
Deputy District Judge Arshad says at the outset that ‘This is a “small money needs” case. There are limited assets.’
the marriage had lasted 19 years, the couple had had three children who were now adults
one party (in this case the husband) had been a ‘stay at home’ parent, while the wife had been the ‘breadwinner’
the husband’s income came from welfare benefits of £15,000 per year net; the wife received £43,200 pa from her employment
the parties had lived in accommodation rented from a housing association during the marriage
there were no significant assets: both parties‘ debts exceeded their modest savings pots; the husband also had a car
W had pensions valued at around £140,000; the husband’s pension provision was minimal.
There were also less common features:
the husband was a litigant-in-person and suffered from significant mental health problems
both of those facts meant that a ground rules hearing was held and a range of special measures were put in place to allow the husband to fully participate while also accounting for his vulnerability and lack of representation (see paragraph 18)
the final hearing was supposed to be held ‘in person’ but was changed to a remote (video) hearing because the husband had brought a knife to court for a familiarisation visit and had sent a large number of concerning emails to the court.
The judge’s decision-making is illustrative of the hard choices involved in deciding cases where the finances are modest. In particular, this judge noted that the husband’s income was low and he was not in a position to earn more, but there was a risk that making any order for spousal maintenance would simply reduce his means-tested benefits in the same amount, thereby taking from the wife’s income without any real benefit. The judge ended up making no orders for spousal maintenance. On pensions, the judge shared the wife’s pension equally with the husband (as at the time of separation). The judge took into account arguments made by the wife as to why the husband should have a lower share, but she also recognised that in future the husband would struggle to make pension contributions and that the reason he did not have a pension now was because of the choices made by the parties during the marriage.
A v R [2021] EWFC B102 (8 December 2021):
The second decision, from Deputy District Judge M Davies, is quite different. It is not a ‘small money’ case in that there are non-pension assets of just under £1 million and more generous pensions than usual; but the £1 million mainly comprises a family home worth £550,000 and cash from a recently received pension lump sum of £225,000. However, it remains very much an ‘everyday’ type of financial remedies case in that the central issue is one that crops up commonly where the parties are in late-middle age: the sharing of pensions to ensure that income needs are met in retirement and the issue of whether to ‘offset’ pensions against other assets accrued over the course of their lives.
The husband (66) was recently retired and received a pension income of £70,000 per year (before tax); the wife (52) had a modest income from illustrating and writing, had three years before she could access her own pension, and a further five years before she would benefit from any share of the husband’s pension. The husband asked the court to divide the cash and the house equally, and to provide the wife with a share of his pension so that they would have equal retirement incomes. That was described by the judge as a ‘straightforward arrangement‘ and one ‘that would commonly be agreed.’
However, the wife wanted to keep the family home in her own name and was prepared to sacrifice (offset) some of her entitlement to the husband’s larger pension and, in turn, reduce her future income. While arithmetically the division across the board would remain equal, the judge was concerned about whether this would be fair given the differences between assets such as property and ready cash compared to a pension which is restricted to paying an income in retirement. The preference in most cases is to deal with each type of asset individually for that reason, rather than offsetting one against the other.
Here, however, the judge had in mind the unusual and tragic circumstances of this particular case: the death of one of the parties’ children, which had triggered the parties’ separation and which had influenced the wife’s desire to keep the home for herself and their minor child in the long-term. The judge was therefore ‘satisfied that this case is one of a minority of cases in which offsetting other than by consent is appropriate’. The wife’s (reduced) pension share was further discounted to reflect the fact that she would enjoy a greater share of the more ‘useful’ non-pension assets.
This case is an interesting demonstration of the overarching requirement for the court to have regard to ‘all the circumstances of the case’ under s.25(1) of the Act, and not just the eight specific factors listed under s.25(2), none of which would necessarily have pointed in the direction that the judge eventually took. It is a useful example of how pensions and offsetting in a case of moderate wealth can be approached.
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