Am I Entitled To Divorce Compensation?
Divorce compensation is in the news. Why? A family court judge has ruled that a London woman is entitled to an additional £400,000 on top of receiving half of the family wealth because of ‘relationship generated disadvantage’. The term relationship generated disadvantage is also referred to by some as ‘divorce compensation’. In this blog we look at the widely reported London family court case and answer your questions on divorce compensation.
London Divorce solicitors
If you are thinking about a separation or divorce from your husband or wife but you aren’t sure about what you would be entitled to as a financial settlement then it is best to take legal advice to explore your options and get guidance on the likely financial settlement or robust representation in financial court proceedings.
The specialist and approachable London divorce team at OTS Solicitors can help you secure the best financial settlement that meets your needs and those of your family. Call us on 0203 959 9123 or click here.
The divorce compensation case
Divorce compensation hit the headlines in some newspapers because of a case involving two London solicitors. In the family court case, the solicitors had been married to one another for nearly ten years and had two children together. At the time of the financial proceedings the family wealth amounted to about ten million pounds. Given the length of the marriage and the two children, the judge ordered that the husband and wife should each get fifty percent of the family wealth, around five million each.
London divorce solicitors say that when asked to divide assets on divorce as a financial settlement a judge should start from the assumption that family wealth should be divided equally unless there is good reason to depart from the presumption of equality, such as:
- Half the family assets will not meet one spouse’s reasonable needs (for example, to buy a house to rehouse themselves and the children) and the other spouse can meet their reasonable needs from less than half of the family assets
- The short length of the marriage , especially if there are no children
- If there is more than enough family wealth to meet the reasonable needs of both the husband and wife then the source of the family wealth should be taken into account. For example, was the family wealth generated by one spouse’s inheritance or the sale of a pre-relationship owned business or other asset?
In the case of the London couple, the judge decided that the wife should get an extra £400,000 in addition to her fifty percent share of the family assets as divorce compensation, or more accurately referred to as ‘relationship generated disadvantage’ in the case report.
Will I get divorce compensation?
London divorce solicitors say that when a judge is asked to decide how family wealth is split between a husband and a wife the judge will consider:
- How much is the family wealth?
- Are there any non-matrimonial property or assets? If so, how much are they worth? What was their source, for example, inherited wealth that hasn’t been shared with your husband or wife because it has been kept in a separate account may be classed as ‘non-family wealth’
- What are the children’s needs and what are the capital needs of the husband and the wife? For example, what are your reasonable housing needs? Those reasonable needs will be based on whether you have children, the length of the marriage or your relationship and the standard of living enjoyed by you during the marriage
- What are the income needs of the husband and wife? Is there an income disparity? Is spousal maintenance justified or can a clean break order be achieved? If spousal maintenance is appropriate how much spousal maintenance should be paid each month and for how long? Is spousal maintenance for life justified or should spousal maintenance end after a specified period of time?
In some exceptional family situations, where one spouse has no earnings capacity or a lower earnings capacity than their other spouse, the family court can be asked to make an award for relationship generated disadvantage.
In the case of the two London solicitors it was clear to the judge that the wife had the skills and qualifications to have gone onto have a similarly stellar career as a solicitor, to that of her husband, but she had forgone that opportunity for the sake of the children. In other family situations, it is far from certain or clear cut if one spouse should receive ‘divorce compensation’ for their career loss because their career either didn’t get off the ground or stalled or hit a ceiling because of childcare responsibilities.
The judge, in the case of the two London solicitors, emphasised the exceptional nature of the case. That is probably because awards for relationship generated disadvantage had fallen out of favour with family court judges in recent years as the court didn’t think the legal costs of analysing career choices and lost opportunities were normally justified. In many cases, where one spouse had a lower earnings capacity than their husband or wife, the financial settlement could reflect this by a greater share of the capital to meet reasonable needs or an award of spousal maintenance.
Are my circumstances exceptional to get divorce compensation?
If you think that you may be entitled to divorce compensation then it is best to take legal advice from a London divorce solicitor on whether they assess your case as falling within the ‘exceptional’ criteria for relationship generated disadvantage divorce compensation and to explore how you can best achieve a financial settlement that meets your needs and expectations.
If you do want to pursue a claim for relationship generated disadvantage then it can be included as an issue for consideration by the family judge when assessing your financial claim. In some situations a claim for divorce compensation is the best way forward, whereas in other scenarios, your divorce solicitor may advise you to focus on claims for more than half the family wealth or for an extra lump sum payment instead of ongoing spousal maintenance (called capitalisation of spousal maintenance). That is because your divorce solicitor will focus on the best way to secure the most advantageous financial settlement for you, whether or not part of the financial court order is labelled as relationship generated disadvantage divorce compensation.