Financial Fairness in the eye of the beholder? Guidance from, and for, the courts

Professor Alison Diduck, Module Convenor for Family law, contributes this post.

familyAs we know, the legal principles that guide family law are sometimes highly discretionary. Take the principle of ‘fairness’, for example, the judicially created objective of financial and property allocation on divorce or dissolution of a civil partnership. Many recall Lord Nicholls’ statement in White v White [2000] UKHL 54 that ‘fairness, like beauty, lies in the eye of the beholder.’

Indeed, a post-divorce financial or property arrangement that seems fair to the owning, earning partner may not seem fair at all to the non-owner/non-earner, and vice versa.

That the parties’ needs should be met after divorce does intuitively seem fair to most. Both parties need enough to set up a new home and be able to get on with their lives. Further, sometimes compensation for economic disparity between the parties arising from the way they conducted their marriage also seems fair. And finally, sharing the ‘fruits of the marriage’ – said to be a ‘partnership of equals’ – also seems fair, doesn’t it?  (see Miller v Miller; McFarlane v McFarlane [2006] UKHL 24). But as is not uncommon, the devil is in the interpretation and the concept of fairness continues to evolve in the courts.

Recently though, courts have been given some guidance to assist them. In July 2016 the Family Justice Council published guidance for the judiciary on financial needs on divorce where the parties’ assets do not exceed their needs. It offers information and case authority about the way the court’s discretion is currently exercised and hopes to encourage courts and legal advisors to answer more consistently questions such as: What are the ‘needs’ that ought to be met on divorce or dissolution? How do we measure them fairly?  How do we meet them? The guidance is here.

It endorses the objective that financial orders made to meet needs should ‘enable a transition to independence’, and considers things like the importance of meeting childcare related needs, housing needs and future needs, including for retirement. It is guidance only, not law, but is well worth a read.

Of course a fair settlement or order cannot be achieved unless the parties and the court know the true value of the assets they are dealing with. What if one party does not agree with the third strand of fairness – that the wealth should be shared – and so tries to hide it to keep it for him or herself?

Here also we have recent guidance, this time from the Courts directly. In Roocroft v Ball [2016] EWCA Civ 1009 the Court of Appeal extended to civil partners the principle developed in Sharland v Sharland [2015] UKSC 60 and Gohil v Gohil [2015] UKSC 61. In Roocroft, a woman argued successfully that her civil partner had hidden assets worth millions of pounds before she died and on that basis the settlement they reached before her death was unfair. You can see a newspaper article about the case herfamily2e.

And you can see an article to remind you about Sharland and Gohil here.

It seems that ultimately, while fairness might still be in the eye of the beholder, courts and legal advisors now at least have some direction on what its first strand (needs) might mean and a clear statement that (mis)reporting assets dishonestly so as to defeat its third strand (sharing) is not fair.

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