Changes to Financial Settlements upon Divorce?

On 6 April 2022, the Divorce, Dissolution and Separation Act 2020 finally revised the divorce process and introduced a ‘no fault’ divorce regime. These changes have received a lot of praise and positive feedback in enabling parties to separate in a much more constructive and streamlined way.

However, there remains concern that financial arrangements consequent to a couple’s divorce remains out of date and cases that changed the way in which cases were determined are not reflected in statute.  

The current legislation on financial arrangements on divorce is the Matrimonial Causes Act 1973 (“MCA 1973”). The government is currently in discussions with the Law Commission to review this act  in an attempt to establish clearer guidance on how financial assets are to be split. The MCA 1973 is extremely discretionary in nature, which can often lead to a great deal of uncertainty and worry for divorcing couples.

The statute

The MCA 1973 was introduced, only several years after the Equal Pay Act 1970. The principles during that time were very different to how society operates now and which the issue of pay and working conditions has been subject to continuous review, the MCA 1973 remains unaltered.

Section 25 of the MCA 1973 requires the Court, when determining how assets should be split on divorce, to take into consideration all circumstances of the case, encompassing factors such as assets, resources, income, needs standard of living, contributions, length of marriage, health, age and conduct. Due to the open ended guidance, it leaves significant judicial interpretation. Judges have a wide discretion in assessing each case.

Currently, spouses attending court, can spend thousands of pounds on legal fees. There is a tendency for the combined wealth between divorcing spouses to be divided in equal shares, unless there is good reason for a departure from equality based on needs or another of the section 25 factors referred to above. In other countries in Europe, the awards are far less generous.

The MCA 1973 guidelines are set to be 50 years out of date. It has been suggested that the current law around the division of money, is antagonistic and an unreformed way of undermining the alleged positive points of the new divorce regime.

The legislation permits Judges to use their own discretion to assess each case resulting in varied awards being made. Due to the scope that judges have in determining settlements, it is sometimes difficult to predict what may happen. Areas such as spousal maintenance payments will require clarity in terms of whether any should be paid, how much and for how long.

How we can help

In view of the discretionary nature of the MCA 1973, Pearson Hards benefit from solicitors with an understanding and experience of the law and are able to adapt an understanding of the potential indications that are fundamental in the Judges’ decision. With enough experience and knowledge, we are able to provide you with the best advice and potential outcomes, whilst also considering the costs implications of pursuing an argument or not.

Our advice is based on our legal expertise and our vast amount of experience within the court sphere as well as outside the Court arena. Court is always considered by us as a very last resort and our preference is to maintain constructive and focused relations between parties to achieve positive results.  We will only ever propose Court action in finances where it is apparent that this is the only way to achieve a reasonable result is through Court action. We work closely with mediators and other solicitors striving to obtain the best possible outcome for our clients. It is our main initiative to make this difficult experience as smooth as possible.

We constantly update and educate ourselves on any new case law and legislation that might affect your case, and will be able to advise you of any changes in the future. We accommodate all types of spouses from different backgrounds and different circumstances.

For more advice, please contact our experienced and personal family team to book your initial no obligation consultation or call now on 020 8949 9500.