Partner Claire Dyer, in our leading Family law team, discusses maintenance payments and the call for the law to be reformed.
The Family Court in England and Wales has a wide discretion when considering financial settlement on divorce. The rationale for this is that it enables Judges to make orders with the aim of achieving a fair outcome in each individual case.
Consequently, the family court has the power to override the terms of marital agreements (i.e. pre-nuptial and post-nuptial agreements) and can order one party to pay a proportion of their income to their former spouse by way of maintenance payments, either for a specified period or on an ongoing basis until one of them dies. Currently, there is no cap on the amount of maintenance or the period over which they can be paid.
An example of the court exercising this discretion was highlighted in the press recently, when Mr Graham Mills was ordered to increase his maintenance payments to his former wife, some 15 years after they had divorced. It is reported that at the time of the divorce, Mrs Mills received a lump sum of £230,000 plus maintenance payments of £1,100 per month. As a result of some unwise investments, Mrs Mills lost her lump sum and returned to the court 15 years later to increase the amount of her maintenance payments. In February 2017, the Court of Appeal ordered Mr Mills to increase the monthly maintenance payments to £1,441 because Mrs Mills is unable to meet her outgoings. Many considered it unfair that Mr Mills should have to make increased payments.
Baroness Deech, a crossbench peer, is calling for the law to be reformed, notably, for marital agreements to become legally binding, subject to the needs of the parties being met. In relation to maintenance payments, Baroness Deech proposes that the duration of payments should be limited to 3 years, much like the system in Scotland, with this term only being extended in cases of financial hardship. Baroness Deech’s Private Members’ Bill (called the Divorce (Financial Provision) Bill), which includes these proposals for reform, is currently being considered by Parliament.
In a recent interview with The Telegraph, Baroness Deech commented that some Judges in the family courts are, in her view, using their powers of discretion so as to be overly generous to the financially weaker party.
The two schools of thought on this issue are:
- That maintenance payments should be limited in amount and duration, to encourage the financially weaker party to increase their income independently so that they are in a position of financial self reliance in the relatively near future. Maintenance payments should not be a ‘meal ticket for life’ as the effect would be to financially penalise the person paying maintenance.
- On the other hand, it is argued that Judges should retain their discretion to be able to order ongoing maintenance payments as there are some circumstances where the three year limit would be entirely unfair. Lord Wilson is one such supporter of this, and he argues that it would be unjust for a financially vulnerable spouse to be limited to maintenance for such a short period in situations where, for example, there has been a very long marriage and the financially weaker party has supported the family, raised the children and enabled the financially stronger spouse to excel in their career. Both parties have contributed equally to the welfare of the family, and both should therefore benefit from the success of the financially stronger spouse, particularly if the financially weaker spouse is relatively close to retirement age and therefore unable to significantly improve their earning capacity.
Baroness Deech’s Bill has successfully passed the first two stages and has been progressed to the committee stage. If the bill passes this stage, it will have to proceed through the House of Commons, the report stage, a third reading and receive Royal Assent, before it can become law. There is, therefore, still some way to go and, in the meantime, the family court will retain its wide power of discretion when considering financial matters.
For further information or legal advice, please contact law@blandy.co.uk or call 0118 951 6800.
This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.
