17 August 2015

Maintenance - till death us do part?

Adele Pledger
Senior associate | UK

When you exchange vows on your wedding day it is with the hope and intention that your marriage will be 'till death us do part'. If those intentions and hopes sadly do not pan out, on a divorce the financially weaker party's hope and intention will often be for there to be spousal maintenance 'till death us do part'. But, will it? What does Statute say? The Matrimonial Proceedings and Property Act 1984 inserted section 25A into the Matrimonial Causes Act 1973, so as to impose a duty upon the Court to consider a 'clean break' and dismissal of claims for periodical payments (maintenance). The Court therefore has 4 options when it comes to the duration of spousal maintenance, if any: 1. Immediate clean break, with no spousal maintenance; 2. Fixed (extendable) term spousal maintenance; 3. Fixed (non-extendable; with a section 28(1A) bar) term spousal maintenance; or 4. Joint lives spousal maintenance (i.e. to last until either party dies). In any event, spousal maintenance will automatically terminate upon the receiving party's remarriage, and the quantum and duration is capable of being varied (save for in option 3 above when the term cannot be extended). The obvious benefit of a joint lives maintenance order is that it can be adjusted in the future to deal with unforeseen circumstances, to avoid potential unfairness. The obvious downside is that it usually means a revisit by the parties to the question of maintenance at some unknown point in the future, which makes it difficult for both parties to plan. If the financially stronger party has sufficient capital, he/she may prefer to pay a lump sum in lieu of maintenance, and achieve a clean break. A downside of that is if the receiving party shortly thereafter gets married, which would have automatically ended spousal maintenance and so the paying party may retrospectively feel they overpaid. What do the Courts say? As with all aspects of family law, it depends on the facts of the case. Can the financially weaker party be financially independent immediately and if not, when? If it is impossible to predict, or if their income/earning potential will never meet their income 'needs' in full, should there be an order a joint lives basis? Some family practitioners will say it partly depends on whether the case is being determined in a London Court or not. There is a long-standing perception that the London family courts are more likely to award joint lives maintenance orders than non-London family courts are. Perhaps the London Judges are more cautious and less willing to crystal ball gaze? Perhaps, but this may be speculation, it is because there is generally more wealth in London? Perhaps the non-London Judges are bigger supporters of financial independence and certainty? That being said, there is a recent perception, which is being reflected in case law, that the London Judges are becoming less willing to award joint lives maintenance, and term maintenance orders are becoming more common than before. In the case of SS v NS (Spousal Maintenance) [2014] EWHC 4183 (Fam), amongst the other (obiter) guidance Mostyn J gave on the principles of spousal maintenance at paragraph 46 of his Judgment, he said: “iv) In every case the court must consider a termination of spousal maintenance with a transition to independence as soon as it is just and reasonable. A term should be considered unless the payee would be unable to adjust without undue hardship to the ending of payments. A degree of (not undue) hardship in making the transition to independence is acceptable. _┬áv) If the choice between an extendable term and a joint lives order is finely balanced the statutory steer should militate in favour of the former.”_ The case of Wright v Wright [2015] EWCA Civ 201 earlier this year attracted much press attention, and led to an influx of emails from past and present clients to many family practitioners wondering what impact it might have on their case. The media boldly asserted that the case heralded the end of joint lives maintenance orders, and there was an obligation on the ex-wife to find work following a divorce rather than rely on maintenance from her ex-husband. In Wright, the original maintenance order in 2008 (by DJ Cushing) was made on a joint lives basis (with husband then aged 52 and wife 44, and the children aged 3 and 9) but with the Judge made it clear that the wife was expected to try to maximise her earning around her childcare responsibilities. In 2012, the husband applied to vary the maintenance downwards, as his income had decreased and he was close to retirement. By that time, the wife had not taken any steps to improve her earning capacity. At first instance, HHJ Roberts made an order for the maintenance to step down over a period of 5 years and then terminate (with no s28(1A) bar). The Court of Appeal refused the wife's application for permission to appeal the decision, and Lord Justice Pitchfork endorsed the comment of DJ Cushing in 2008 that “there is a general expectation…that once a child is in year 2, most mothers can consider part time work consistent with their obligation to their children”. Whilst Wright might be said to be another example of the perceived slight 'shift' by the Courts from joint lives orders to term orders, it is so fact specific, and is only a permission to appeal judgment, that it is wrong to go so bold as to say that it marks 'the end' of joint lives maintenance orders. It still very much depends on the facts of the case. The future? In 2014, Baroness Deech submitted a private member's bill (Divorce (Financial Provision) Bill 2013-2014) to Parliament, and one of the draft bill's suggestions was for spousal maintenance to be limited to three years (mirroring the position in Scotland where maintenance cannot be awarded for a period of more than three years save for in exceptional circumstances). The third reading of the Bill by the House of Lords took place on 18 March 2015, with no amendments made, but the 2014-15 session of Parliament then prorogued and therefore, the Bill made no further progress. Baroness Deech's proposed Bill might be favoured by some practitioners and Judges, and opposed by others, but in any event, all would agree the proposals contained within it were radical. Would such a radical law be passed by the House of Commons? I cannot see it happening during this parliamentary term.

Adele Pledger Senior associate | London

Category: Blog