ENGLAND & WALES Trends and Developments Contributed by: Alex Carruthers, Oliver Heeks and Sian Brooks, Hughes Fowler Carruthers
The Significance of Matrimonalisation and Conduct in the Division of Assets During Divorce Proceedings in England and Wales One of the key issues in many financial remedy cases is the sharing of matrimonial assets. Of the factors that inform the division of matrimo - nial assets in a fair manner, perhaps the most debated at the present time are: • the role of “matrimonalisation” – ie, the process whereby assets that were once non- matrimonial (eg, separate) come to be con - sidered matrimonial property; and • the extent to which conduct (including, most notably, domestic abuse) should be consid - ered in financial remedy awards. Here, the authors provide an outline of these two concepts (including concomitant controversies, relevant and recent case law, and constructive advice for family practitioners), as well as their impact on the equitable determination of finan - cial remedies in divorce proceedings. The seminal case of White v White (2000) UKHL 54 (“White”) in 2000 made fairness the overrid - ing objective in financial remedy proceedings and clarified that any decision should be cross- checked against a “yardstick of equality” (an equal split of divorcing parties’ assets). Judg - es in the Family Court have wide discretionary powers and will depart from an equal division of assets when it is considered fair. The combined cases of Miller and McFarlane identified three strands to fairness: • equal sharing (per White); • meeting needs; and • compensation for relationship-generated disadvantage.
In the intervening years, further cases have pro - vided detail on the operation of these strands. Compensation relates to prospective finan - cial disadvantage that parties may face upon divorce, where such disadvantage is a result of decisions they took during the marriage (eg, sac - rificing their career) or – potentially – as a result of forms of conduct (eg, domestic abuse). It is extremely rare. Needs are an elastic concept. The Family Jus - tice Council has stated that the standard of liv - ing parties enjoy during the marriage “should be reflected, as far as possible, in the sort of level of income and housing each should have as a single person afterwards” and that “it is not appropriate for the divorce to entail a sudden and dramatic disparity in the parties’ lifestyle”. In most cases, there are not sufficient financial resources for a judge’s enquiry to go beyond meeting the needs of both parties. It is only in those cases where there is a surplus of assets over needs that the sharing principle is engaged (WC v HC (Financial Remedies Agreements) (2022) EWFC 22). Matrimonalisation in the division of assets Under the sharing principle, parties are ordinar - ily entitled to an equal division of matrimonial assets. Non-matrimonial assets are ordinarily retained by the party to whom they belong, unless there are good reasons to the contrary. Matrimonial assets are assets that are generated from the joint endeavour of marriage, such as the family home and pensions/investments built up during the marriage or assets that have been treated as matrimonial (eg, the family home). Non-matrimonial assets are assets that have been brought into the marriage by one spouse
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