Law on the separation of finances on divorce to be reviewed

It is welcome news that the government will be commissioning a review of the law on the division of finances on divorce.

The current law is contained in the Matrimonial Causes Act 1973, and has developed through case law.

The starting point when distributing finances on divorce is equal division. However there are numerous factors (including the parties’ needs, conduct, contributions to the marriage and the existence of ‘non-matrimonial’ property) which can justify a shift from the 50/50 split and judges have wide discretion as to the weight to be given to such factors in making a final award.

Then there is the question of spousal maintenance – when this should be payable, its level and its duration – which is also subject to judicial discretion and varies from case to case.

This means that outcomes are unpredictable – it is difficult to forecast the likely results if parties went to court. The wide range of possible outcomes makes it harder to find common ground in negotiations and so reach an early settlement, and instead couples become mired in protracted court disputes.

Whilst some judicial discretion is valuable in allowing judges to fine-tune solutions to reflect the unique facts of every case, a review of the law in this area would be very welcome if it led to greater clarity and guidance as to potential outcomes, to support couples in reaching an agreement outside court and avoiding painful and lengthy court proceedings.

The UK government is set to commission an extensive review of 50-year-old legislation that determines how financial assets are split after divorce in England and Wales.