Final Financial Orders After Divorce
It has been hard to avoid the news of the recent case where an ex-wife has made a financial claim against her husband that she divorced some 20+ years ago. The Supreme Court has decided that she should be permitted to pursue a financial claim after such a long time as there was no final order made at the time of divorce.
A financial agreement is often reaches by consent alongside a divorce. This means that both parties agree what is to be done with their assets without the need for any court case or arguments. This should then be put into a formal structure called a consent order and be approved by the court. Such an order is expressed as being in ‘full and final settlement’ of all financial claims between them. That brings an end to any claims that they each have at any point in the future.
Had there been such an order made in this case then the Wife would have had no claim to make at all.
The facts are that the parties had a short marriage at a time when they had no money and no assets. In fact they had very very little. The Husband lived a new age traveller lifestyle living in an ambulance at times. The mother had very little and lived mostly on benefits. They had one biological child together and one other child that the father treated as being a child of the family.
Much later the father established an eco friendly business generating green electricity from wind turbines and went on to amass a fortune with his company being worth in the region of £57m. Only after all this did the Wife pursue her claim against him for some financial relief. At this time the biological child was living with him and had been for some 13 years. The Wife continues to live in a house that she purchased under the Right to Buy Scheme for £60,000 and which is in a state of bad repair.
As the wife issued a claim for financial relief enquiries were made in the divorce court to establish whether there was a final financial order to be made. One could not be found. As a result of this the Supreme Court ordered on 11 March 2015 that the Wife be allowed to make her claim and try to establish a financial claim from the Husband.
Lord Wilson who gave the judgment for the Supreme Court stated
It may however be helpful to suggest that the major issues requiring limited investigation by way of oral evidence seem at this stage to be the wife’s delay on the one hand and the disparate contributions to the care of the children on the other. These are, to my mind, the two magnetic factors. They pull in opposite directions and the question may ultimately prove to be whether, in the light also of the five difficulties identified in para 30 above, the wife’s delay is so potent a factor as not just to reduce but even to eliminate what might otherwise have been awarded to her by reference to contributions and possibly also to needs. Had it been relevant, as Jackson LJ considered, to ask whether the wife’s application had a real prospect of success, my opinion would have been that it had a real prospect of comparatively modest success, perhaps of an order which would enable her, like the wife in the Pearce case above, to purchase a somewhat more comfortable, and mortgage-free, home for herself and her remaining dependants.
It seems likely therefore that the court will provide the Wife with a lump sum to establish her stability with her remaining children at home as a pragmatic view. It is extremely unlikely that she will acquire a significant share of the Husband’s new wealth acquired after the divorce by his own efforts.
However, the moral of the story is that a Final Order would have prevented all of this. Each divorce should produce such a final order so as to protect both the parties. With the withdrawal of legal aid this means that the parties need to pay for this. However, the cost benefit analysis seems to show that this is the more prudent and sensible option.
Member since: 27th January 2015
Jeanette Birch has recently joined the team at Dunham Guest & Lyons Solicitors in the Family Department. Jeanette qualified as a solicitor in 1994 and specialises in family law. She has extensive practical...