News and Insights
28 September 2016
For many divorcing couples, coming to an agreement over their finances is often the most difficult part of the marriage breakup; and in virtually all cases, divorcing couples need legal advice on both capital and income.
Over the past few years, much has been made in the press of capital settlements, with London regularly regarded as the ‘divorce capital of the world.’ This means there has been less focus on income provision, or spousal maintenance, as it is often referred to.
Claims for spousal maintenance can be complex and difficult to resolve due to divorcing couples disagreeing about the level of maintenance, as well as how long it should be paid for. In Jersey, disputes over spousal maintenance are one of the main barriers to resolving financial matters in a divorce. This is particularly the case where the husband (as is often the case) is a high earner and the wife has either not worked for many years or where the children are still very young.
In the last few weeks, the issue of spousal maintenance has been thrown into the spotlight by a case in England called SS & NS which has set a legal precedent. This case clarifies many aspects of what the court will consider when looking at claims for spousal maintenance, and provides useful guidelines which will undoubtedly be argued in Jersey’s family court. The husband’s case in the SS & NS case was that maintenance should be paid for seven years only, with no ability on the part of the wife to extend the term. However, the wife wanted maintenance for 27 years and sought 30% of the husband’s bonus whilst maintenance was being paid to her. The youngest child was 7.
The court stated as follows:
- The court must first decide whether there are hard needs to be met – factors for deciding this may include the ages of the couple, the length of the relationship and dependent children;
- Any spousal maintenance should be needs-based, apart from in exceptional cases;
- In virtually all cases, maintenance should not be given where the needs were not causally connected to the marriage;
- Significantly, it was stated that a court must consider the termination of spousal maintenance with a transition to independence as soon as was just and reasonable. In the vast majority of cases a ‘term of maintenance’ (time deadline) should be ordered. This would mean that ‘joint lives orders’ - the obligation of the payer to continue paying until the recipient remarries, the payer or payee dies or the court makes a further order - would become much rarer apart from perhaps in cases of older wives;
- Where the court needs to decide between a ‘term’ (period of time) that can be extended or a joint lives order, the former is to be preferred in most cases;
- The standard of living during the marriage is relevant but not decisive. All too often the emphasis on the standard of living can cloud the prospect of independence;
- It is not for the court to carry out a detailed analysis of the wife’s budget but to look back and ask if the total represents a fair proportion of the husband’s available income;
- As far as bonuses are concerned, these can be looked at for extra items beyond basic needs and should be paid on a capped percentage basis.
The result of all of the above in SS & NS was that the wife was awarded £30,000 pa and 20% of the husband’s future bonuses. The spousal maintenance was to be paid until the youngest child reached 18 and it could then be extended if appropriate at that time (the bonus element was not extendable).
If the above judgment was followed in Jersey, it would mark (as in England) a shift away from joint lives maintenance orders to a position where, usually, the wife will have to accept that all financial connections to the husband will be eventually severed. If this does happen, many wives may well feel aggrieved by such an outcome and under undue pressure to become independent before they are ready to do so.