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What Factors Does The Court Consider When Making A Financial Order?

When it comes to working out a financial settlement upon divorce, it is always preferable for couples to try and negotiate an agreement between themselves rather than obtain a court order.  There are various alternatives for resolving family law disputes, including attending mediation or round-table negotiations; the latter facilitated by your family law solicitor, the former by a trained mediator.

17 November 2017
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However, if you cannot reach a resolution, or there is a history of abuse and/or domestic violence in your relationship, going to court may prove to be inevitable.

Should you apply for a court order regarding a financial settlement, the court has to consider the checklist set out under the Matrimonial Causes Act 1973, section 25, or the equivalent provisions in Schedule 5, Part 5 to the Civil Partnership Act 2004.

These factors are:

  • the income, earning capacity, property, and other financial resources each party has access to now and in the foreseeable future
  • the financial needs, obligations, and responsibilities of each of the parties now and in the foreseeable future
  • the standard of living enjoyed by the family before the breakdown of the marriage
  • the age of each party to the marriage and the duration of the marriage
  • any physical or mental disability of either of the parties to the marriage
  • the contributions that each of the parties has made or is likely in the foreseeable future to looking after any children of the marriage
  • 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
  • in the case of proceedings for divorce or nullity of marriage, the value to each of the parties to the marriage of any benefit that, because of the divorce, that party will lose the chance of acquiring – an example of this may be accumulating interest on a pension fund

 

However, before the court looks at any of these factors, it has a duty to look at the needs of any children involved.  This does not mean the welfare of a minor child or children is the paramount or overriding consideration.  In practice, within the context of an application for a financial order by a parent, this will mean the court will have particular regard to the child(ren)'s housing and day-to-day income needs, and such needs may take on a greater significance in comparison with the other factors to which the court must have regard under section 25.

 

Let’s examine each of these sections separately:

The financial resources of the parties

Not only will the court consider the existing assets and income of the parties, but it will also consider future earning capacity.  If one party has taken a step back in their career in order to bring up the children, it may transpire that the only way to ensure a fair settlement is to award them a higher percentage of the assets.

The need of the parties

The court will examine the financial needs of each party.  The financially weaker spouse may require an ongoing payment in the form of spousal maintenance so that they can meet their housing and day-to-day income needs.

The income and earning capacity of the parties

The significance and weight to be given to income and earning capacity may vary depending on age and circumstances, e.g. a spouse/civil partner who has not worked for many years during a long marriage due to childcare responsibilities may not have the same earning capacity expectations as a younger party who does not have children.

The length of the marriage

When assessing the length of a marriage and how it will impact the financial order, the courts will generally now consider the period you and your spouse were living together, if it moved seamlessly into marriage.  The length of a marriage may be important, as the financial claims for a marriage of two decades are usually greater than those arising out of a marriage which has lasted a couple of years.

The contributions of the parties

The court needs to consider the direct and indirect financial and non-financial contributions of the parties.  For example, one of the spouses may have put in a substantial amount of money into the purchase of a second property by way of money received from an inheritance.  An example of a non-financial contribution is one spouse giving up their career to allow the other to travel extensively in order to advance their prospects.

The conduct of the parties

The conduct of the parties will only be considered in cases where it is inequitable to disregard it.  Adultery or forms of unreasonable behaviour are normally not considered to meet the threshold.  An example where conduct was taken into account by the courts was in C v T [2009] All ER (D) 43 (Jun); in this case, the husband sexually assaulted his grandchildren, taking and making indecent photographs of them and put them on the internet.  The court held this was conduct that amounted to 'the grossest breach of trust'.

In summary

If you are in the process of a divorce, it is crucial you seek legal advice regarding to a financial settlement.  Even if you are able to agree on a settlement between yourselves, it always pays to see a family law solicitor to ensure your long-term best interests are protected.

Guillaumes LLP Solicitors is a full-service law firm based in Weybridge, Surrey.  We have a highly experienced family law team who can assist you with divorce-related financial settlement.  To make an appointment, please call us on 01932 840 111.