The recent case of Waggott v Waggott, has provided a strong indication of the court’s willingness to limit maintenance claims made by a spouse (most usually the wife) upon divorce. However, the 30th Resolution National Conference on 20/21 April 2018 saw judges, journalists and lawyers further debating this point. From the recent case law and lively debate, it is clear that there is much disagreement as to how ongoing financial provision should be made for a former spouse, both in terms of the amount and the length of time for which it should continue.
The jurisdiction of England and Wales is renowned as being one of the most generous in terms of the maintenance which can be obtained by a spouse for themselves (as opposed to the children) upon divorce. Such maintenance is usually for the wife, typically having been the person within the marriage who has taken time away from their career to raise children and subsequently leaves the marriage with a lower earning capacity. It is why London is often seen as the divorce capital of the Western world and the press has been critical of the ‘meal ticket for life’ approach which it sees to exist within the family courts.
It is against this background that the case of Waggott was heard. The couple had been in a relationship for 21 years and had an 8 year old child at the time of separation. The wife had not worked since 2001 and the husband had an income estimated to be £3 million net per annum including bonuses. Although the separating couple was able to reach an agreement with regard to an equal division of their capital assets (providing the wife with approximately £8.3 million plus provision from his bonuses for 2 years), they could not agree as to the amount which should be provided to the wife by way of ongoing financial support, or spousal maintenance.
At the first instance, the court determined that the wife should receive a total income of £175,000, inclusive of £60,000 interest derived from her share of the capital assets with the remainder provided by way of spousal maintenance, and that this maintenance should continue on a ‘joint lives’ basis, ie for the remainder of the time for which both parties were alive, save in the event of the wife’s remarriage. Both the husband and the wife were dissatisfied with this decision and both appealed.
The wife argued that, as she had shared in the capital assets, this sharing principle should also apply to future income. Futhermore, she argued that there should be no expectation on her to use the income from her share of the capital assets to reduce the amount of maintenance to be received from her husband. In addition, she asserted that she should be compensated from the husband’s income for the fact that she had relinquished her own career to support that of the husband.
The husband, by contrast, argued that the judge at first instance had failed to consider properly the possibility of imposing a clean break, ie the cessation of maintenance, rather than imposing a joint lives order.
Lord Justice Moylan in the Court of Appeal gave a clear judgment in which he confirmed the following points:
- There is no ‘sharing principle’ which can be applied to earnings made after separation;
- It was appropriate to take into account any investment income generated from the wife’s capital resources which she received as a result of the divorce;
- There was no additional compensation due to the wife over and above what was required meet her needs;
- The maintenance payable was to be limited to March 2021 ie 5 years from the original order, with no ability to extend this term (s28(1A) bar). It was fair to take into account the fact that the wife could use her not inconsiderable capital to meet her income needs and that she could therefore adjust to life without maintenance without undue hardship.
Although the Court of Appeal was at pains to stress that they had based their decision exclusively on the interpretation of the law rather than on general public concern regarding the so-called ‘meal ticket for life’ approach, the decision in Waggott reflects the view by many in the legal community and indeed beyond that the pendulum has swung too far in favour of the former wife and that ongoing maintenance provision should be reined in. An example of this is the private members bill tabled by Baroness Deech which suggests amongst other provisions (to include no fault divorce and prenuptial agreements being treated as binding), that there should be a limit on maintenance claims to 5 years, unless it can be demonstrated that serious financial hardship would be caused. Baroness Deech repeated her view at the Conference that ongoing spousal maintenance was in itself an impediment to equality. However prominent legal figures to include Lady Justice Hale and Deputy High Court Judge Francis Judd QC, supported by social affairs journalist Louise Tickle, voiced their concern with this approach and it was noted that, until there is indeed equality within the workplace and in respect of pay, the removal of discretion with regard to maintenance would inevitably lead to unfair outcomes upon divorce, with one party’s career and income being allowed to flourish, while the other’s has been irreversibly curtailed through the raising of children.
Finally, the Family Justice Council have provided updated information in their second edition of ‘Guidance on Financial Needs on Divorce’, published in April 2018. When dealing with the question of duration of provision for needs and the transition to independence, whilst it is clearly stated that most cases would not require life-long support, it is also recommended that the termination of obligations should:
- only occur if the former spouse can adjust without undue hardship;
- not be achieved at the expense of a fair result;
- should be justified by reference to an evidential foundation, not crystal ball gazing or pious exhortation.
Therefore, despite the decision in Waggott, the ‘joint lives’ order remains alive and it is likely to take a statutory review or Supreme Court decision before any significant change is seen. However, any such review or decision will need to tread a careful line between those critical of the so-called ‘meal ticket for life’ approach and those wishing to ensure the protection of a spouse’s future financial security where this has been diminished through the raising of children.