Does the reason for divorce affect the settlement?
No, the reason for divorce does not affect the settlement. Since the introduction of the no-fault divorce law that came into effect in 2022 in England and Wales, couples can no longer state a reason or ground for divorce or dissolution. The only ground for a divorce after the no-fault divorce law came into effect is that the marriage has broken down irretrievably.
Even before the introduction of no-fault divorce law, the reasons for a divorce were not relevant in the process of reaching a financial settlement. Although a spouse's misconduct or behaviour can lead to a divorce, it does not have a direct impact on the settlement that follows. The sole purpose of a divorce process is to dissolve a marriage, and a financial settlement must be done separately from the divorce process.
How are settlements calculated?
Section 25 of the Matrimonial Causes Act sets out guidelines a court must consider when calculating financial settlements. Where a divorce case involves children under the age of 18, the court's first consideration in calculating the settlement must be the children’s needs and welfare. These include the children’s access to food, clothing, a home, and other necessities.
Among many different factors, the court will consider the following when calculating settlements:
1. The assets and resources of the parties
The court must consider the parties’ income, property, and potential future earnings when calculating settlements. The court will also take account of the parties’ earning capacity, such as individual skills, age, periods of not working, and the potential of retraining.
2. The needs of the parties
The court will also take into account the current and future needs and obligations of both parties when determining the settlements. The court will look into primary needs such as accommodation for both parties, costs of food and clothing, and the cost of taking care of any children.
3. Parties ages and duration of the marriage
The age of the parties may affect their earning capacity, especially for older couples. Older couples, for instance, may have access to pensions. Likewise, for younger couples who have not been in marriage for a long duration and who do not have children, the court is more likely to award a 50/50 split of the assets. However, these are just general examples, there are many different scenarios that could happen and there is no one-size-fits-all approach.
4. The standard of living before the divorce
Although the court may not be able to pinpoint the exact standard of living before the divorce, it can assess this through understanding the lifestyle and earnings of each party during the marriage and will try to uphold the expected standard of living of each party in the divorce settlement.
5. Contributions to the welfare of the family
The court will consider more than just financial contributions in calculating settlements. The court will acknowledge spouses who have taken care of the home and family too.
The court will also look at the needs of a party suffering from a disability, such as medical treatment, and any potential worsening of their condition in the future when distributing assets in a divorce.
7. Potential benefits a party may lose
Where a party stands to lose certain benefits, such as a pension, as a result of the divorce, the court may decide to calculate the split so that one party does not massively lose out by allowing them other assets for instance.
8. Conduct of each party
The court will consider the conduct of each party in exceptional cases where it would be unfair to ignore it. For example, in H v H (Financial Relief: Attempted Murder as Conduct) , a husband stabbed his wife resulting in her being unable to work. In this case, the court gave her needs greater priority when calculating how assets should be split in the divorce.
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