Irwin Mitchell | Focus on Family | A fair share?

A fair share? Does contribution during marriage alter the divorce settlement?

I am a genius and have contributed far more to the family finances than my ex. Does that make a difference to what the court will award me on divorce?

When a court determines financial proceedings on divorce it will take into account all the relevant circumstances and facts of the case and then make a decision as to how finances and property should be dealt with. The court’s focus will be on achieving fairness by reference to needs, compensation and sharing. The first consideration however is always given to the welfare of any children under 18.

The starting point is that each party receives 50% of the matrimonial assets but that division may be departed from if it is fair to do so. In most cases, a fair approach often starts and ends with making sure the family’s financial and housing needs are met. However, if the resources are such that the parties’ and their children’s needs are readily met with a handsome surplus then the court will determine whether it is justified to depart from equal division to ensure that each party receives their fair share based on compensation and sharing principles.

In many cases involving high net worth individuals, there will be one party who (so he or she will argue) has contributed to the family’s welfare in such a positive way that they should be rewarded for their unmatched ‘special contribution’ by receiving a higher proportion of the matrimonial assets.

There have been several high profile cases that have appeared before the courts where the issue of special contributions has been raised. The court’s approach is that the special contribution must be ‘stellar’ and it has been held that the party claiming the special contribution must have demonstrated some ‘genius quality’. In practice, this means that successfully demonstrating a special contribution is a high hurdle to get over.

However, there is a place for making such claims. There have been cases where courts have departed from equality to award the ‘genius’ party as much as 66% of the available wealth. Breadwinners should therefore discuss this with their solicitor who can advise as to the merits of them claiming that they have made a special contribution.

Likewise, in cases where the weaker financial party, often the ‘homemaker’, is faced with an argument from their ex that he or she deserves more owing to their special contributions, the homemaker should speak to their solicitor to discuss their options. The courts are mindful not to discriminate between the roles of the breadwinner and homemaker and the contributions they respectively make. So the homemaker may argue that their contribution, by looking after the children and being an excellent parent for example, is equally special, and accordingly neither party has made an unmatched special contribution.

In one recent case, the husband had accumulated a wealth of $300 million from scratch in just eight years whilst the wife looked after the home and children. Nevertheless, the husband’s special contribution argument failed and the parties were each awarded 50% of the matrimonial assets. However, the husband has been granted permission to appeal to the Court of Appeal where senior judges are likely to provide further guidance as to what qualifies as a special contribution and when it is appropriate.

In the meantime however, and indeed after the Court of Appeal hearing (which will most likely be heard no sooner that winter 2016/17), if you are going through divorce and you or your ex are claiming to have made a special contribution which ought to be rewarded then you should seek expert advice from one of our dedicated specialist Family solicitors on 0345 604 4911.

For a more detailed consideration of the law on special contribution please visit Darren Hark’s article at familylaw.co.uk.