Divorce In Court – Sharp v Sharp

Sharp v Sharp [2017] EWCA Civ 408

Court of Appeal, 13 June 2017, McFarlane, McCombe and David Richards LJJ

The wife was a trader in the wholesale fuel trade. The husband was employed for many years by an international company involved with IT, and then took voluntary redundancy shortly before the separation. Their salaries were similar during the marriage, but the wife received, in addition to her salary, large discretionary bonuses (£10.5 million during the central 5 years of the relationship).

Before the couple met the husband was living in a mortgaged flat; when this was eventually sold it realised £11,000 in equity. The couple began living together in rented accommodation at the end of 2007, became engaged to marry in August 2008 and then married in June 2009. In anticipation of that marriage, they bought a property (SD) in joint names and then made improvements to it; both the purchase and the improvements were paid for by £1.02 million provided by the wife. Damage done to the property in 2009 meant that further sums had to be spent on repairs. In 2012 the couple purchased another property, this time for £2 million, and again spent considerable sums on works; again the money was provided entirely by the wife, but the property was put into joint names. The couple moved into this new property in 2013, and then put SD on the market, but it did not sell.

Not long after the move to the new property, there were significant difficulties with the marriage. The husband had begun an affair before the move but when the wife challenged him about this, he denied it, and continued to do so for an extended period. The wife filed a divorce petition in December 2013. However, they did not physically separate until July 2014, at which point the husband moved back to SD and the wife remained in the new property. The husband eventually admitted the affair only within the court proceedings, and made a number of admissions about his new relationship for the first time only at the final hearing.

For some time the wife attempted to pursue allegations that the husband’s conduct was such that it would be inequitable to disregard it, and to challenge the nature and extent of the husband’s contributions to the marriage. She sought very extensive financial disclosure by the husband, and by his new partner. At preliminary hearings the wife was permitted to pursue allegations that the husband had misused or misappropriated funds given to him by the wife for the purposes of refurbishment, including spending those funds to further his relationship with his new partner, however, she was also told that she would have an uphill struggle in establishing such claims in court.

The wife attempted to add considerably to the trial bundle after the contents had been agreed, and went on to ask the court to admit three new witness statements relating (i) to the degree of the husband’s involvement in the works to the house, (ii) a third party account of the breakdown of the relationship; and (iii) his support, or otherwise, for the wife in preparation of packed lunches for her.

The wife’s Form E disclosed overall assets of about £6.7 million, including her pensions, with a value of about £800,000. The husband’s pension had a value of about £140,000. SD had been valued at £1.1 million and the new property at £1.5 million (in respect of each property, less than had been spent by the couple). The wife initially sought the transfer of both properties to her, in return for a £400,000 payment to the husband, but by the hearing was offering the husband SD, plus £130,000 to cover his outstanding legal costs liabilities. The wife’s position was that nothing should be done to reflect the disparity in their pensions. The husband was seeking £3 million, including SD, plus the transfer of 23.8% of the wife’s pensions. This represented the amount identified by a pensions expert instructed by the husband as the amount required to achieve equality of benefit between the couple in relation to the increase in their respective pensions over the span of the marriage. In fact the pensions expert had recommended offsetting the pension, and that “a cash payment of £210,856 to H . . .would be a fair equivalent value.”

The husband had undergone some retraining, and was trying to establish himself as a freelance instructor/consultant in IT. He said he was earning about £5,000-£7,500 each month, but had no long-term secure assignments. Changes in the wife’s industry meant that she was no longer likely to receive large bonuses, of the sort she had received to date.

The wife’s costs were in the region of £200,000, and the husband’s were just over £180,000. After all the financial information had been exchanged, the wife identified £136,000 as ‘missing money’; this was further reduced during the hearing to something in the region of £100,000, or 1.5% of the total assets.

The judge at first instance excluded the first matrimonial home (now worth about £1.067 million) from the ‘matrimonial pot’, on the basis that the first home had been acquired by the wife before the marriage, together with other pre-acquired assets to the value of about £350,000. The judge assessed the total matrimonial assets, including the second matrimonial home, as £5.45 million and awarded the husband £2.725 million, precisely half, explaining that he did not believe that separate finances should necessarily lead to ‘not sharing’ assets; given the developments in the law on prenuptial settlements since White v White. He concluded that, in effect parties subscribed to the sharing regime when they married unless they chose to opt out (or attempt to do so) with a prenup, relying on the ‘patent lack of enthusiasm’ of the Court of Appeal in Charman v Charman for the concept of unilateral assets. The judge made a finding that in any event no sufficiently clear and consistent pattern of separate finances had been established in this case.

The wife appealed.

The Court of Appeal allowed the wife’s appeal.

The task of identifying the principles to be distilled from White and, more particularly, from Miller was complicated by the number of speeches, the breadth of coverage of the key topics and the need to discern the basis for the actual decision of the House of Lords on the facts of the Miller case. Applying Work v Gray, in this field, ‘provided the guidance is authoritative’ it should be followed without undue consideration of the distinction between that which formed part of the reasoning behind the decision, and that which did not, in order to be loyal to the spirit, as much as the letter, of such guidance. In undertaking that exercise, however, it was nevertheless necessary to differentiate between the guidance given by the various members of the Judicial Committee where there was a difference between them. In order to determine which of two differing opinions was the ‘authoritative’ guidance, the basic principle based on identifying the majority view must surely still apply. Where, therefore, the lone opinion of Lord Nicholls on a matter was in conflict with that of the three members of the House who were in agreement on that matter, the opinion of the majority must be the authoritative view. Insofar as the judgment of this court in Charman had been interpreted as expressing a preference for the opinion of Lord Nicholls on such matters, such an interpretation was erroneous.

The inclusive approach to authoritative obiter statements encouraged by Work v Gray was an adjunct to the ordinary principle of precedent that where a line of reasoning was part of the justification for the House of Lords’ actual decision, it must be taken as binding and followed by this court. Insofar as the actual decision in Miller established the basis for a relaxation of the equal sharing principle in a short marriage where unilateral assets had been received by one partner, then there could be no argument that such an approach might apply, on the facts, in other cases.

In Miller both Lord Nicholls and Baroness Hale had identified fairness, equality and non- discrimination as principles and both drew out the same three ‘strands’ of ‘needs’, ‘compensation’ and ‘sharing’, which Lord Nicholls described as the ‘equal sharing’ principle. Both considered that predictability of outcome and a consistent approach to similar cases before the court were central aspects of ‘fairness’.

If the equal sharing principle of 50/50 allocation was now applied by courts and practitioners, in cases which were not pre-determined by ‘needs’, to all relevant assets in every marriage, without exception, from the moment the couple left the church or the Register Office, this would seem to be a very significant and wholly unjustified development from the approach so carefully described by Lord Nicholls in Miller. An automatic or blind application of a 50/50 split in every case could only be an impermissible judicial gloss on the statute, which expressly required the court to consider all the circumstances of the case.

In terms of the distinction between the approach taken by Lord Nicholls and that by Baroness Hale relating to the categorisation of the source of assets owned by the individual spouses, this case was, a ‘non-business partnership, non-family asset case’ where the bulk (indeed effectively all) of the property had been generated by the wife. The wife’s bonuses were not ‘family assets’ as categorised by Baroness Hale and, in contrast to Foster, they had not been generated by the joint efforts of the parties (Foster being a case which was held to be ‘all about contribution’). It was hard to justify holding that this case was not one where ‘there is still some scope for one party to acquire and retain separate property which is not automatically to be shared equally between them’ (Baroness Hale para 153). By Baroness Hale’s analysis at paragraph 152 the court was obliged to take account of the duration of the marriage with a view to considering reducing the husband’s share to reflect the period of his domestic contribution. Further, in a case where, in contrast to the more traditional ‘bread-winner’ / ‘home-maker’ model, each partner worked full time for most of the marriage, and where there were no children, it must be necessary for the court also to evaluate the extent, if any, by which the husband’s domestic contribution exceeded that of the wife. Each of their Lordships’ and Ladyship’s speeches attempted to delineate an approach, within the broad principles, which was, to a degree, subtle and flexible; if, as the speeches of the majority contemplated, some grounds for departure from the equal sharing principle might lie in the littoral zone along its outer edges, these would require careful, fact-specific, evaluation and could not be fairly determined by the blind application of an arithmetic formula.

Baroness Hale’s analysis recognised that, in the absence of a blanket principle of shared matrimonial property, there must be some circumstances where a party would retain sole ownership of assets acquired and retained during the marriage. Given that the wife in Miller had made a domestic contribution and had not received 50% of the matrimonial assets, it did not follow that a home-maker would enjoy equal sharing in such cases in a manner which would unfairly contrast with a spouse who had pursued a career. Lord Mance expressly agreed with the views expressed by Baroness Hale to the effect that the duration of the marriage could not be discounted. In any event, and of particular importance in the context of this appeal, he also agreed that how the parties had organised their finances was relevant.

The inescapable conclusion from an analysis of the speeches in Miller, in terms of the possibility of some alteration from, rather than a strict application of, the equal sharing principle in relation to short, childless marriages, where both spouses had largely been in full-time employment and where only some of their finances had been pooled, was that fairness might require a reduction from a full 50% share or the exclusion of some property from the 50% calculation. Of the five members of the Judicial Committee, only Lord Nicholls suggested a contrary view and even on his analysis the potential for some form of relaxation could be seen.

In contrast to the position in Charman, this court now had to confront the short marriage ‘dual career’ issue directly on the facts of the present case. Whilst affording due respect to the observations made by the experienced court in Charman, this court was obliged to go back to the speeches in Miller; the authoritative guidance in relation to short marriage, dual-career cases was to be found in the speeches of the majority and not, where it differed, in that of Lord Nicholls.

Whilst much of what was said in this regard in Miller (for example relating to dual-careers) was probably obiter, the conclusive point to be taken from Miller, however, arose from the actual determination of the House of Lords on the Miller appeal itself, where all five of their Lordships agreed that Mrs Miller should receive substantially less than 50% of the value of the New Star shares. The existence of a basis for departing from a strict application of equal sharing, albeit in a small number of cases and on the unusual facts of that case, was thereby established as a matter of law.

In the court’s view, the majority plainly determined the appeal by affording substantial weight both to the shortness of the marriage and to the very significant unilateral gain in the husband’s finances. The similarities between the factual structure in Miller and that in the present appeal were plain, albeit that the figures in the present case might justify the label ‘Miller-lite’. The wife had received bonuses way beyond the level of her previous earnings purely as a result of her employment and (in contrast to Foster) without any contribution, either domestic or business, from the husband. Both cases involved short marriages. An additional factor in the present case, not present in Miller, was that the couple both worked throughout the marriage, save for the final year, so that any difference between their respective contributions to the welfare of the family in the home front would have been much less distinct than that in Miller.

The distinction between the treatment of short marriages in paragraph 152 and the (obiter) discussion about dual career marriages in paragraph 153 in Miller had been recognised by this court in Charman at paragraph 83 and that distinction was carried forward in paragraphs 85 and 86. At paragraph 85 the court addressed the issue of short marriages and accepted the majority view expressed by Baroness Hale at paragraph 152 of Miller, while at paragraph 86 they addressed the obiter example of dual career marriages. It was clearly unnecessary for them to do so, because Charman was not a dual career marriage. What was said at paragraph 86 was therefore obiter comment on Baroness Hale’s obiter comment on dual career marriages. The court appeared to have been concerned that recognition of unilateral assets as falling outside the sharing principle in a long (or more than short) marriage could well produce an unfair result. For that reason, they wanted the notion of different treatment of unilateral assets in such marriages to be “closely confined”. That issue, which did not arise on the facts of the present case, remained a matter for debate on another day. On that analysis of the key passages in the judgment in Charman, there was no impediment, in terms of possible conflict, for this court now to contemplate a departure from the equal sharing principle in the case of a dual career marriage which was short, and where the couple had kept their finances separate.

If the husband’s submission that, following Charman, the profession and judges at first instance had read Charman as requiring the courts to apply the equal sharing principle to unilateral assets even in a short marriage case (assuming needs are met) was right, that approach was plainly contrary to the decision in Miller and was not justified by anything that was said in Charman.

It had not been open to the judge below to hold that, save where parties expressly chose to opt out (or attempt to do so) of the sharing concept to which couples subscribed when they marry by making a pre-nuptial agreement, the speeches of Baroness Hale and Lord Mance, in so far as they contemplated unilateral finances in a short marriage, dual career, case, were not consistent with the principles developed since the decision in White. The obiter observations of the Court of Appeal in Charman at paragraph 86, expressing a preference for the lone opinion of Lord Nicholls, should not have been taken as a determinative statement of the law. There was no ground in the judgment in Charman for holding that any exception was to be confined only to those cases where the parties had established a formal pre-nuptial agreement. It was plain from counsel’s description of the path taken by the profession and the family courts post-Charman, that Sir Peter Singer’s analysis in the present case was on all fours with that approach and, as such, was in no manner to be singled out for bespoke criticism. On the contrary, the judgment demonstrated a careful, considered and wise application of that very approach. Even on the basis of the tentative foresight offered in Charman as to a movement towards more frequent reliance upon the distribution of finances in accordance with the apparent agreement of the parties, the judge’s holding that the sharing principle must apply unless the parties have entered into a pre-nuptial agreement was unsustainable and not supported by any authority. It followed that the finding at paragraph 50 that the conduct of the parties in relation to separate finances fell short of supporting a finding akin to a pre-nuptial agreement must fall away as no longer being relevant. On the facts of this case, the manner in which the couple arranged their finances was more than sufficient to establish that the wife maintained her capital separately in a manner compatible with that described by Baroness Hale in Miller.

This case was, therefore, one of the ‘very small number of cases’ (Baroness Hale, para 152) where the factors that the court had identified justified departure from the equal sharing principle. The combination of potentially relevant factors (short marriage, no children, dual incomes and separate finances) was sufficient to justify a departure from the equal sharing principle in order to achieve overall fairness between these parties. As the award given to Mrs Miller showed, the factors in play in this regard were not to be taken as water-tight, black and white, elements when the overall task was to achieve a fair outcome. In calculating the husband’s award, and in view of the fact that the wife’s liquid capital was not to be treated as part of the matrimonial assets for equal sharing, it was not appropriate to take account of the husband’s concession regarding the first property, purchased prior to the marriage. Both properties were matrimonial homes and, as such, properly fell to be divided equally between the parties. In addition to retaining one half of the capital value of the two properties (£1.3M), the husband should receive an additional award to reflect a combination of the following three factors: (a) the standard of living enjoyed during the marriage; (b) the need for a modest capital fund in order to live in the property that he was to retain; and (c) some share in the assets held by the wife. The court would assess the value of that additional award in this case at £700,000 making a total award of £2M, made up of the first matrimonial home which was to be transferred to him (value £1.1M) plus a lump sum payment of £900,000.

Why do Humans really decide to mediate?

“Conflict happens. It is inevitable. It is going to happen whenever you have people with different expectations”.

As humans we understand that conflict has always been a part of human interaction. In the ancient world and tribal societies the concept of an independent neutral working with conflicted parties was commonplace. The offering of ‘an olive branch’ as a ‘peace offering’ was widely recognised, the phrase having been assimilated into the modern vernacular . However, modern western society has been encouraged to rely on the prevailing legal system to solve disputes. So why then is there now an increasing shift towards mediation? Why is there a move towards the creation of a safe and sustainable environment within which to solve disputes rather than the formal, sometimes intimidating environment of the courtroom?

Society in general has been conditioned to rely on the legal system to support it in the event of a dispute. We are brought up with the concept of ‘our day in court’ and the ‘quest for justice’  However, the reality is that the legal system is focussed on ‘rights’ in determining the outcome of a dispute, this does not necessarily lead to ‘justice’. In addition to this, and on a more practical level, the increasing pressure on the Judiciary and the resulting inability of the courts to respond effectively to demand, coupled with the high cost of litigation, are changing peoples perceptions of court based dispute resolution.

Cases taken to court can take months and at the end of the process the relationship between the parties may be irrevocably damaged. The parties can be psychologically affected, with any possibility of communication between them broken down. There is, therefore, an increasing awareness that mediation offers an alternative option. Rather than entering into a legal process that is very expensive, time consuming and gives the power to an individual to make decisions that can negatively impact an entire life, why not enter a process which focusses on genuine communication rather than just identifying legal ‘rights’, and which aims to empower the parties to find a win-win solution for all involved.

Human beings need to feel they are being heard and listened to. Communication is often the first casualty in a dispute leading to entrenched views and an inability to discuss issues in a  rational and unemotional way. The dispute begins to have a life of its own. The original causes often forgotten. Mediation represents  the perfect opportunity  to have an open conversation, to collaborate, move forward without resentment, communicate feelings, basic needs and wants and build a plan to repair the relationship. As a result of mediation, people are more willing to forgive and to act in a positive manner; it is a learning experience and the values it creates will continue to give humans the power to build a better world.

Family Mediation Week 2017 – Monday 23rd January – Friday 27th January 2017.

Family Mediation Week, which will take place from January 23rd to 27th 2017 on the theme “I wish my parents had known about family mediation”. This is a very busy time of year we know; if you haven’t developed a plan for the Week, it would be worth setting time aside during the holidays – the December newsletter will include a 12 days of Christmas list of 10 minute ideas, which may help!

This week we are suggesting that you use the guide to advertising on Twitter and Facebook that we sent you last week to arrange for some social media marketing   – this can be a really cost-effective way to boost interest in what you are doing and spread the word about mediation to people who are trying to find information about divorce on the web. Our second suggestion is to include this Family Mediation Week footer in your emails, or in some other way mention Family Mediation Wishes in your seasonal messages of goodwill; finally, have a look at those positive messages from your clients, and decide how you want to use them in your campaign for the week. If you haven’t found them yet, make some time and go through the files – whatever you do with them, they should give you a warm glow that will last until Christmas!

Whatever you have decided to do, tell the world about it on the special website produced for Family Mediation Week, at http://www.familymediationweek.org.uk/

Thank you very much for some supportive emails letting us know what you are planning – without your involvement this initiative won’t work, so we are very grateful to you for taking part!

Family Mediation Week

Family Mediation Week

Family lawyers urged to steer clients towards private mediation

In the years I have practised in family law, I have become convinced of the many benefits of private mediation in resolving property and parenting disputes and enabling couples who have separated to come to a fair and balanced agreement about their future arrangements, writes Tim Couch.

I would even go so far as to say that, except for the one or two cases I may get each year where the client walks into my office and says: “We’ve separated, we’ve agreed on the settlement and the kids, can you do the paperwork,” private mediation should be the first port of call when a relationship has ended and there is a need for a property settlement and formal parenting arrangements.

In my opinion, any family lawyer who genuinely wants to help their clients will encourage them to pursue this course, rather than to make a beeline for court.

As anyone who practises in family law will be aware, most family law registries are presently experiencing unprecedented delays in determining cases. This is in part a result of an increased number of litigants and an insufficient number of judges. Our judges work tirelessly to resolve family law disputes as fairly and as efficiently as they can. But there are only so many hours in the day.

Because the system is overloaded with cases, many litigants experience delays of up to 18 months or even longer before their case is determined at a final hearing. This is becoming the norm in a number of registries. The longer the delay, the longer the uncertainty endured by the client. Private mediation provides a potential shortcut through this uncertainty.

A second advantage of private mediation is that it gives the client more control over the process. In the Family Law Courts, the judge controls and manages the court process from start to finish. The court determines who will hear the case, and when.

By contrast, a private mediator can be chosen by the client, their former partner and their respective solicitors. There is no shortage of highly experienced and approachable barristers and lawyers who offer mediation services.

A third advantage of private mediation is its cost-effectiveness. Litigating a family law dispute is rarely a cheap exercise. There is almost always a mountain of legal work involved in getting a case into court and presenting it in the best possible way in the hope of achieving a sound outcome. Not to mention regular court appearances.

This usually takes hours and hours of effort and preparation on the part of the solicitor, resulting in significant legal fees. By the time of the final hearing, the legal bill can amount to tens of thousands of dollars, and possibly more. A successful mediation, on the other hand, will only cost a tiny fraction of this amount, and if successful, could achieve the same or a similar result.

Finally, a failed mediation is rarely a waste of time. Even if it has not succeeded in resolving the dispute in its entirety, the matters that were in dispute at the start of the mediation have usually narrowed dramatically. Often with some further reflection and legal advice after the mediation, it may be possible to reach an agreement on any unresolved points without having to commence court proceedings.

If that’s not possible, the matters left for the court to determine have often been sharply reduced. In turn, less court time should be required to determine the case – maybe two days instead of five or six or more. This can often mean that the court can find the time to determine the case much sooner. And the chances of settling the case before a final hearing have likely increased as well.

In my experience, when couples opt to take their dispute to the Family Law Courts, they do not necessarily believe that this course of action will produce the best possible result.

Rather, warring couples can be motivated by anger and the desire to make their ex-partner suffer. It’s only human nature to long for vengeance in circumstances where a relationship sours and we feel rejected, slighted, humiliated or betrayed. It’s a natural response.

Sometimes the desire to keep fighting is not even motivated by concerns over unfair apportionment of money or property or time with children. Instead it can be based on an entirely emotional impulse that can border on obsession – for example, a client may be convinced that their ex had an extramarital affair and is determined somehow to “make them pay”.

Such impulses may be understandable, but they definitely work against the client’s best interests. I do my utmost to make clients whose anger has eclipsed their reason understand that no court is ever going to give them everything they want, while leaving their ex with nothing.

A court will always try to make decisions that are as fair to all parties as possible, so what the client is really facing is a choice between two types of compromise – the first reached voluntarily, relatively quickly and relatively cheaply, with both parties having input into the details of the arrangements; the second being a court-imposed compromise in which all the details have been determined by a judge at much greater expense and after a much longer delay. And quite often, neither party is entirely happy with the outcome.

As I see it, clients wanting to fight their ex and make them suffer is not the only obstacle to private mediation. The other obstacle can often be the approach adopted by the lawyers they retain. Hand on heart, I have to say that there are lawyers who will not even bother to try to steer their clients towards compromise, preferring to sit back and allow the flames of hostility to burn in the knowledge that a protracted legal battle will generate far more in legal fees.

Some practitioners are notorious for letting a family law matter unnecessarily drag on for months and sometimes years before finally giving strong advice to their client on the steps of the court on the day of the final hearing to settle. It is hard to think of a reason for such an approach other than the desire to drive up the legal bill.

Yes, it’s true that if you encourage your client to attend private mediation and that mediation is successful, you will earn much less in professional costs than you would from a protracted court battle.

But ask yourself, why did you become a lawyer? Was it altruism, so that you could use your legal skills to help people in the most efficient and effective way possible? Or was it greed, so that you could extract every possible last cent from the general public, individually and collectively?

I appreciate that private mediation will not be suitable in all family law cases, and for a variety of reasons. However, I think it is a fair statement to say that private mediation will be suitable in the vast majority of family law cases.

Family lawyers are unlikely to ever run out of work. Business will always be steady, if not busy. As long as the sun continues to come up in the morning, couples will separate, and will need help to disentangle their lives from one another.

Tim Couch is a lawyer in the family law team at Stacks Law Firm.

What Issues Can Be Solved Through Mediation

Mediation can help family members to settle arrangements at any stage of separation or divorce. These can include:

  • Issues around children, such as access and visitation rights
  • Financial matters, such as dividing your assets or organising maintenance payments
  • Property disputes
  • Addressing debt

What Is Family Mediation?

What is family mediation

This is a process in which the participants meet (initially, separately) with an impartial and specially trained family mediator (or co-mediators) to explain what needs to be settled, to explore the options available and consider ways of reaching agreement on any or all the questions they need to settle. Mediation can help family members to settle arrangements for children and/or financial and property matters at any stage of separation/divorce, as well as some other family matters. Participants are helped to reach well-informed decisions, without pressure from each other or from the mediator. When a full and final settlement is needed in divorce proceedings, the terms worked out in mediation can be used as the basis for a consent order.

Legal aid for mediation

Although legal aid is not available from solicitors for divorce and most family matters (with some exceptions, eg domestic violence), legal aid is still available for family mediation for those below the limits on income and capital. Legally aided mediation is completely free of charge and those on certain kinds of welfare benefit are ‘passported’ to free mediation. Even if you have to pay for one or more mediation meetings, collecting financial information and testing options in mediation is likely to cost much less than using two lawyers. NB Enquirers should ask whether the mediator carrying out the initial information meeting (MIAM) is accredited to carry out a legal aid assessment for mediation.

Young people and children

Children and young people have the right to be consulted on arrangements that will affect their lives, provided they are able to express their own views and wishes, but very few have the chance to have any say in practice. Some family mediators are specially trained to meet with children and young people, as well as with parents. Parents and/or young people and children needing to work out arrangements that take account of the child’s feelings and wishes (particularly in or after separation/divorce), should look for a service that can offer this special help.

The YouTube link below entitled ‘Family Mediation – A better way’, is a special Christmas video developed by Protocol IT with assistance from Lisa Parkinson to help explain the benefits of family mediation compared with going to court.

Family Mediation Week 2017

Welcome to Family mediation week : 23-27 January 2017

Taking place from 23-27 January 2017, Family Mediation Week aims to raise awareness of mediation and how it can help separating families manage their issues collaboratively and productively.

During the week, we’ll be publishing resources, information and blog posts to…

 

  • Explain family mediation – answer your questions and debunk the myths
  • Help separating couples decide whether mediation is for them
  • Discuss the benefits of family mediation as a well-respected and legitimate alternative to court
  • Connect separating couples with mediation professionals

Interested in finding out more about mediation? Take a look at our What is family mediation page. 

Would you like to see what’s on in your area during the course of the week? Browse our Events map.

Looking for more information and resources? Visit our Blog for articles, videos and more.

EU referendum—implications for family law

The UK has voted to leave the EU: what will be the immediate consequences, and longer term considerations, for family lawyers and their clients. Michael Wells-Greco, partner at Charles Russell Speechlys, and Nigel Shepherd, National Chair of Resolution and head of family at Mills & Reeve offer their insight.

What will be the immediate impact of the vote to leave?

Michael Wells-Greco (MWG): The UK has two years to make its divorce settlement on its departure from the EU but that is completely separate from any framework agreement for longer-term future arrangements with the EU. The question to be asked is whether the divorce will be an elegant disengagement or messy? A major change, or withdrawal from the EU instruments relevant to family law, risks disruption, considerable confusion and years of uncertainty. This is particularly problematic given that family law is rarely a legislative priority, and at a time in the UK when the availability of legal aid has been greatly reduced.

Nigel Shepherd (NS): It’s too early to know the full implications for family law, but what is clear is that we are entering a period of great uncertainty. Like most areas of legislation, family law in the UK is currently intrinsically linked to that in other jurisdictions. There are also wider issues not directly related to family law. Should a short-term impact on the financial markets turn into a longer-term economic issue then it will affect people’s personal finances, things like pensions, investments, and house values. These will all need to be taken into consideration when dealing with financial matters upon divorce.

What might be the longer term implications?

MWG: As EU law had permeated family law and practice across the EU, families will be asking whether they can continue to benefit from EU rules in relation to enforcement of matrimonial orders (divorce, separation) and parental responsibility orders (residence and contact). Some may be advised to take pre-emptive steps now rather than wait for the uncertainty following the two year withdrawal.

NS: We won’t know yet what withdrawal from the EU will mean for measures like Brussels IIa, which provides for uniform jurisdictional rules for divorce proceedings; or maintenance arrangements, which are currently regulated throughout the European Union. It’s unlikely that the implications for family law will be a priority for the government, and it’s a distinct possibility that any currently planned or envisaged reforms to family law will be put on hold. Resolution will continue our work with government and others to both influence the future of family justice, and provide our members with the support, information and resources they need in order to deal with the post-referendum landscape.

Family Justice Council guidance on ‘financial needs’ on divorce

At long last the Family Justice Council has published its Guidance on ‘Financial Needs’ on Divorce, described by President of the Family Division, Sir James Munby, in his foreword as ‘…intended as a useful tool for the judiciary in relation to the making of orders to meet financial needs following divorce and the dissolution of civil partnerships’, but surely also as useful guidance for practitioners when advising clients on this difficult discretionary area of family law.  But will difference will it make?

The guidance focuses on those cases where the available assets do not exceed the parties’ needs, and provides a summary of the law as explained and developed in leading cases. It also includes a number of helpful case studies of common scenarios.

Background

The origins of the guidance are in the Law Commission’s 2014 report, Matrimonial Property, Needs and Agreements, which highlighted concerns regarding evidence of significant regional differences in the levels of needs-based support likely to be awarded in different courts, and a lack of transparency in this area of the law. The Law Commission recommended that the Family Justice Council prepare guidance for the courts, with the stated aims of achieving both greater clarity and consistency of approach.

What is the purpose of the guidance?

At 64 pages in length, this is not a light read. It raises the question of the weight it will be given in practice: it has no statutory basis, it is merely guidance. The President says that on distribution of the guide to the judiciary, ‘The consensus view was that its distribution nationally will be of significant assistance to judges without in any way diminishing the fundamental importance of judicial discretion.’

The authors of the guidance acknowledge that, as the Law Commission observed, in an area where there are no rules or strict entitlements, there is a limit to what such guidance can achieve. The guidance cannot, and is not intended to, change the law. Its stated purpose is to ‘disseminate information about the ways in which the courts’ discretion is currently exercised, and to encourage the consistent use of that discretion in a particular way and (if possible) with a particular objective’. The intention is that it will be revised and updated at regular intervals.

It is also suggested that the guidance should be read in conjunction with Sorting out Finances on Divorce, the guide produced previously for the assistance of litigants in person.

Conclusion

Are we any further forward? Not hugely. I suspect that regional variations will persist, not least in part because there are regional economic differences that inevitably impact on financial provision cases. The guidance will hopefully promote some greater degree of consistency, and may prove a useful reference point, but it cannot and does not change the law. It remains that while the Matrimonial Causes Act 1973 has been amended numerous times since coming into force, it is an Act that was conceived in a very different time. The concept of needs has, more recently, largely been shaped by case law, and that case law has (for at least the last decade or so) been dominated by big (if not huge) money cases. Most cases do not fall into that category, making the existing law an awkward fit for the everyday case. So, read, digest and contemplate the guidance. The worked examples are particularly interesting reading. But don’t expect a dramatic move to consistency of approach any time soon.

Geraldine Morris is a solicitor and Head of LexisPSL Family.

Twitter: @GeraldineMorris

Variation of child maintenance on the grounds of assets

Family analysis: The child support maintenance case of SM v Secretary of State for Work and Pensions shows that the infinite variety of family arrangements will always create fresh litigation despite the efforts of legislators to provide a comprehensive code, says James Pirrie, director of Family Law in Partnership Ltd.

Original news

SM v Secretary of State for Work and Pensions and BM (Child support: variation/departure directions: just and equitable) [2016] UKUT 245 (AAC)

The Upper Tribunal (UT) allowed a father’s appeal against a First-tier Tribunal (FTT) decision that payments he had made for his son’s extra-curricular activities such as music lessons and sport at school would not be taken into account when deciding the amount of child support maintenance he should pay.

What were the background facts?

There were two applications for a variation of child support maintenance seeking an adjustment to the formula figure:

  • an application for an increase by the mother, as the parent with care, on the basis of the father’s ‘underused’ assets
  • an application for a reduction by the father, as the non-resident parent, on the basis that he was paying school fees

The Child Support Agency (CSA) granted both applications. But the father appealed to the FTT, arguing that the variation did not pass the required test of being ‘just and equitable’, within the meaning of section 28F of the Child Support Act 1991 (CSA 1991), as regard should be had to the sums he paid as voluntary contributions towards his school extras for his son such as music lessons, school trips, bus fares, school uniform, school clubs and sports activities.

The FTT rejected the father’s argument, and he appealed to the UT.

What did the UT decide?

The UT found that the CSA and the FTT had correctly decided that the sums paid by the father were not simply to be lumped together as, within the meaning of CSA 1991, s 8(7)(b), ‘expenses incurred in connection with the provision of the instruction or training’ of his son and treated as generating an adjustment on the father’s application for a variation.

However, it considered that it was legitimate to consider whether those contributions were of such a size as to lead to the refusal of the mother’s application on the basis of underused assets (ie whether he was paying enough voluntarily and so a further uplift to the formula figure to reflect his assets was not just and equitable). The CSA had not considered this angle, which the UT found a material error.

The UT remitted the case to the FTT for fresh consideration.

What is the significance of this case?

It is a paradox that a detailed code will always spawn vastly more litigation than might be expected. I remember looking around the House of Lords in 2006 on one of the early visits of the state department to our Supreme Court (Smith v Secretary of State for Work and Pensions [2006] UKHL 35, [2006] All ER (D) 161 (Jul)) and thinking that the 27 lawyers then wrestling with another short phrase in the statute did not bode well for the administrative scheme. This case is a further illustration of the infinite variety of family arrangements that generates challenges for the administrative scheme.

The drafters of the scheme aimed to remove discretion from the system and provide clear rules for its officers to pinpoint clear outcomes. Unfortunately, family circumstances have always been able to create ambiguity in even the most clear-seeming phrase. An ‘arms race’ has ensued of increasing definition and increasing complexity which has created a legal labyrinth so extensive as to be beyond the understanding of all but the most motivated specialists.

Just to locate this conundrum. There have been three schemes. This case involves the second scheme (live from 2003) and while it has now been overtaken by the third scheme, there are similar provisions in the current scheme, so this case is not of historical interest only. Each scheme permits a variation direction to be given to take into account certain additional expenses, such as educational costs, where this is just and equitable (and thus reduce the level of payment). The schemes also permit an increase in the level of the award in certain circumstances, and here the mother had applied for an increase on a ground no longer permitted, namely assets that were held by the father that should be treated as generating a notional income.

The decision in this case was being made by the UT at the second layer of appeal from the state agency’s decision-maker. Here Gwynneth Knowles QC, judge of the UT, tells us that:

  • educational costs are taken account of as a variation ground, and thus accommodated they cannot found a ‘just and equitable’ argument
  • extras may not be educational costs if they are not directly connected to the education, eg Duke of Edinburgh activities would be extra-curricular at a state school and so should be regarded as such at a private school
  • it is possible that enough of those costs might incline the CSA to decide that the parent is paying enough and therefore not order an increase on the grounds of that parent’s various other assets

Although how it might go about making that decision is anyone’s guess. In all likelihood, the teenagers in the instant case are surely going to see ongoing litigation between their parents as the poor CSA scheme seeks to come up with a rational way of making that decision. One suspects that the cost to the CSA of hosting this contest will be considerably more than the adjustment that would result from either taking account of or excluding the extras payments from the calculations.

Interviewed by Robert Matthews.