It is sadly a feature of financial remedy disputes on divorce that couples expend disproportionate amounts of their assets on legal costs, arguing over who should have what. Sometimes, their legal costs even exceed the value of their assets, making the entire exercise somewhat futile.

Over the years family judges have often criticised couples for spending inordinate sums arguing over the division of their assets. We have written about this here previously, for example in this post in 2017.

And now another such case has been published. It is worth mentioning as a reminder of the folly of running up disproportionate legal costs.

And unlike so many of these cases, this one did not involve parties of great wealth. In fact, in the end they were arguing over negative assets.

The reason for this was that the parties’ assets were quite modest to begin with, and they ran up legal costs arguing over their division, greater than the value of those assets. The wife alone ran up legal costs in excess of £61,000. The end result was that their joint debts amounted to some £57,000.

And they did this despite the judge warning them at an earlier hearing that there was “a danger in this case that the cost of litigation and any final hearing will be disproportionately high relative to the asset base.”

The parties did, in fact, reach an agreement a few months before the final hearing, but they (in particular the wife) continued to argue over certain peripheral matters, with the result that the case dragged on to the final hearing.

In the end the judge made an order that was basically the same as what had been agreed previously. The husband therefore asked the judge to order the wife to pay his legal costs from the date of the agreement, amounting to some £29,000.

The judge found that both parties had been at fault in allowing the case to go to the final hearing, but also found that most of the fault lay with the wife. He therefore ordered the wife to pay £10,000 towards the husband’s costs.

All of the above led the judge to comment: “The level of costs in these proceedings has been ruinous to the parties. It is utterly disproportionate to the assets involved. To put the issue in context, the wife’s costs alone are just short of £4,000 in excess of the parties’ joint deficit.  Issues have been pursued which did not merit any significant expenditure of costs. Warnings as to the costs being incurred have gone ignored.”

The moral is quite clear: do everything you reasonably can to settle matters by agreement, always bear in mind the costs you are incurring, and always see the larger picture.

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The concept of ‘matrimonial property’ can be of great importance when considering the division of assets between husband and wife on divorce. But what exactly is ‘matrimonial property’, and how does this affect the division?

In simple terms, ‘matrimonial property’ is property that came into being in the course of the marriage, due to the joint efforts of the spouses. Accordingly, property owned by either spouse before the marriage is usually ‘non-matrimonial’, as is property acquired after the parties separated, or property acquired other than by the efforts of the spouses, such as gifts or inheritances.

The importance of the concept of matrimonial property comes from the basic idea that marriage is a joint venture, and therefore on divorce each spouse should be entitled to an equal share assets acquired during the marriage as a result of their joint efforts (whether those efforts involved actually acquiring the asset, or enabling the other party to do so, for example by looking after the home and bringing up the family).

But it should be noted that there is no absolute rule saying that on every divorce each party should get half of the matrimonial property, and keep any non-matrimonial property they own. The court has a discretion to divide ALL property as it sees fit, having regard to the circumstances of the case. Thus, for example, a party may be awarded more than half of the matrimonial property and, if the matrimonial property is insufficient to meet their financial needs, then they may even be awarded non-matrimonial property belonging to the other party.

The operation of the concept of matrimonial property was demonstrated by a recent Family Court case.

In the case there were assets totalling £54 million in value. These included a £5 million inheritance that the wife received, and £9 million in trusts established by the wife’s family.

On the face of it both the inheritance and the trust money was non-matrimonial, but the husband argued that because he had managed the trust money for some 16 years, that had the effect of ‘matrimonialising’ it. Accordingly, he said, he was entitled to a half share.

The judge did not agree. The trust money had not acquired a matrimonial character, either in whole or in part, as a result of the husband’s activities as investment manager.

The judge therefore held that only £40 million of the assets were matrimonial, and, there being no reason to depart from equality, each party was therefore awarded half of that sum.

The discussion of matrimonial property above is just a very brief introduction to what can be a complex subject. For more details, you should consult an expert family lawyer. We can find you an expert lawyer that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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A recent Family Court case acts as a warning to separating couples of the importance of finalising divorce financial agreements, and the perils of not doing so.

The case concerned a couple who separated in 2010. At that time they had various jointly owned assets, so in 2012 they agreed upon a division of the assets between themselves. Unfortunately, the agreement was never legally finalised.

In 2019 the wife commenced divorce proceedings, by which time the husband’s assets had risen in value considerably. This meant that the assets the wife received under the agreement represented only about 11 per cent of the total assets by the time of the divorce.

The wife issued a financial remedies application, seeking a significantly greater share of the assets. She was able to do so as the 2012 agreement had never been legally finalised, either by being put into a consent court order or, if there are no divorce proceedings, by being incorporated into a written separation agreement.

Both a court order and a separation deed really need to be prepared by lawyers, but the cost is relatively small, especially when compared to the cost of contested financial remedy proceedings.

The wife’s application was eventually dealt with by the court, and she was awarded a modest extra sum, although nothing like as much as she was seeking.

However, by the end of the final hearing the legal costs of both parties exceeded half a million pounds. This led the judge to comment “that an expenditure of perhaps a few thousands of pounds of legal costs in 2012 [on finalising the agreement] might well have saved and avoided the catastrophic expenditure of over £500,000 now.”

Obviously, separating couples should do all they reasonably can to resolve financial matters by agreement. However, they must then make sure that the agreement is legally finalised, so that there can be no come back later.

Family Law Café can find an expert family lawyer to help you both reach and finalise a financial agreement, working with you via our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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Last week the President of the Family Division Sir Andrew McFarlane announced that the new Financial Remedies Courts (’FRCs’) are now ‘live’ across all areas of England and Wales.

For the benefit of those who don’t know, the term ‘financial remedies’ refers to all family court proceedings relating to financial issues. These primarily consist of proceedings relating to the financial settlement on divorce, but also include other types of proceedings, including claims for financial provision for children.

Note that financial remedies does not include child support maintenance claims, which are dealt with by the Child Maintenance Service.

Until recently, financial remedy applications were all dealt with by the local family court. However, in 2016 it was suggested that a national network of specialist courts be set up to deal with financial remedy cases. A pilot scheme was then set up in 2018, to test the idea.

The pilot has now been successfully completed, and the President says that “the FRCs should henceforth be regarded as an established and permanent part of the Family Court.”

But what does this mean for anyone involved in a financial remedies case?

Well, the big thing is that word ‘specialist’. This means both that FRCs are particularly ‘geared’ to deal with financial remedy cases and, in particular, that the judges dealing with the cases will be specialists in financial remedy work.

This in turn should mean that financial remedy cases should in future be dealt with more efficiently, and with better, more consistent, outcomes. Such consistency should also make it easier for lawyers to advise clients, thereby making it more likely that cases can be settled without having to go to court.

Lastly, it should be noted that there are still two types of family-related financial cases that are not currently dealt with by FRCs. These are trusts of land cases (usually involving property claims following the breakdown of cohabitation) and Inheritance Act cases, where a claim is made against the estate of the deceased, often by a family member.

However, the President has expressed the hope that both of these types of case will, in due course, also be dealt with by FRCs.

Whatever type of financial remedy case you are involved in, you should seek expert legal advice. We can find you an expert lawyer that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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The biggest divorce news of the week is of course that Kim Kardashian has reportedly filed for divorce from Kanye West. This latest celebrity divorce has already filled huge numbers of column-inches in newspapers and magazines across the world.

Our fascination for celebrity divorce seems to know no bounds. But can we actually learn anything useful from them? Anything that may be of relevance to ‘ordinary’ people going through marriage breakdown?

Well, sometimes we can, especially when (to the obvious delight of newspaper editors) the divorce gets ‘nasty’. Hopefully, Ms Kardashian and Mr West’s divorce, if it goes ahead, will not fall into this bracket, but sadly many celebrity divorces do, just as do many divorces involving ‘ordinary’ people.

Watching the awful spectacle of a nasty celebrity divorce play out in front of the world’s media must surely act as a warning to all: don’t let this happen to me.

And you don’t have to let it happen. You are in control. There are many things that you can do to avoid an unpleasant divorce. We have given much of this advice here previously, but it merits regular repetition.

Put the animosity of the breakup behind you – Obviously, many marriage breakdowns involve considerable animosity, and a simple mistake that parties make is to carry that animosity over to the divorce proceedings.

This can take many forms, from making irrelevant allegations against the other party, to seeking unrealistic outcomes. All of which will, of course, simply add to the stress, cost and time that the case will take to resolve.

Obviously, it is easy to say that animosity should be left behind, but hard to do it. However, all parties should try.

Concentrate on what is important – The important things in a divorce case are firstly sorting out arrangements for any dependent children and secondly sorting out the financial settlement.

But all too often parties will get side-tracked by other matters, or by matters that they think are relevant to children or finances, but actually are not. And this is where our next point comes in:

Follow advice – Take the best legal advice you can, and follow it. Your lawyer will tell you what is important or relevant, and what is not, and will ensure that you concentrate on the issues that really matter.

We can find you an expert lawyer that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

Consider mediation – Lastly, remember that court proceedings are not the only way to resolve a family dispute. Try to resolve the matter by agreement, and if that is not possible, consider using mediation as a way of resolving matters.

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We wrote here in January about a case in which the husband was seeking rent from the wife in relation to her occupation of the former matrimonial home.

As we explained then the husband was appealing to the Court of Appeal against a ruling that the wife was not liable to pay rent of £5,000 per week (a total of £600,000) to the husband in relation to the period that she occupied the property before it was sold.

The Court of Appeal has now handed down its judgment. It found in favour of the wife, and therefore dismissed the husband’s appeal.

The appeal revolved around the interpretation of a consent court order that was drawn up in 2016, setting out the terms of an agreed financial settlement between the husband and the wife.

The order provided that the wife was to receive a lump sum settlement of £11.5 million, £6.5 million straight away, with the balance due when the house was sold. However, the sale was delayed, and did not take place until 2019.

The order did not specifically state that the wife should pay rent to the husband, but the husband argued that it would be ‘absurd’ not to imply a term into the agreement requiring the wife to pay rent – the parties would surely have agreed this had they known that the sale would take so long.

The Court of Appeal disagreed. The matter turned solely upon what the consent order said. As it did not say that the wife should pay rent, she was not obliged to do so.

The case demonstrates the need to be specific when drafting court orders. Care should be given to take into account all reasonable possibilities, and to provide for them accordingly, either by agreeing the matter with the other party, or by requesting the court to include a suitable provision in any order.

It may now be that a rental clause will be sought in any similar agreement, as a matter of course.

But that obviously means that this would have to be taken into account when negotiating the amount that the occupying spouse should receive from the settlement. As Lady Justice King, giving the leading judgment of the Court of Appeal, pointed out, the only way that the wife could pay £600,000 would be from her lump sum, thereby reducing the lump sum by a “very significant sum”.

Clearly, whichever side you may be on, you will need to obtain the best possible legal advice. We can provide the advice you need, by finding you an expert that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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When deciding what, if any, financial orders to make on divorce the court is required to consider a checklist of factors. One of those factors is the contributions which each of the parties has made to the marriage.

Contributions can be financial, or they can be non-financial, such as looking after the home, or caring for the family. They can be both past contributions and future contributions.

In appropriate cases contributions can have a significant bearing upon the outcome of the case, where it would be unfair to disregard the fact that one party had made a much greater contribution than the other. This is most likely in high-money cases, as in low money cases the assets are usually required to pay for the financial needs of the parties, irrespective of who contributed what.

Contributions were a major factor in a recent Court of Appeal case. The case made the national news, as it involved a well-known BBC executive. She argued that she should have a greater share of the matrimonial assets, not just because of her substantial financial contribution towards the marriage, but also because, she claimed, her husband had made a negative financial contribution.

The case concerned her appeal against a financial award, which had already been amended in her favour following an earlier appeal.

Briefly, the circumstances of the case were that the parties were married in 1993 and have two children, twins, born in 2011. The husband is now aged 69 and the wife 57. The parties separated in 2012/2013 when the husband left the former matrimonial home. The husband has not sought to have any real contact with the children since the separation.

The wife has, for many years, worked for the BBC, and the husband has not worked for some time. The wife was earning a substantial sum, had some savings and a BBC pension worth some £2 million.

The husband, on the other hand, had a very small pension, and significant debts.

The parties also jointly owned a number of properties, with a net value of just over £2 million.

The wife argued that the husband’s contribution was “significantly negative”, and that the imbalance between the respective contributions of herself and the husband justified a significant departure from an equal division of assets. The court did not agree that the husband’s contribution was negative, but did find that it was “modest”. The wife was therefore awarded 63.5% of the non-pension assets. The pensions were shared equally.

The wife appealed. Her appeal was allowed, and her share of the assets was raised to 73%, and the husband’s share of the pensions was lowered to 34%.

The wife did not think that this went far enough and appealed again, to the Court of Appeal.

The Court of Appeal dismissed the appeal. It found, amongst other things, that the “negative contributions” argument was not actually about contributions at all, but rather about the husband’s conduct – contributions are positive, not negative. Here, the husband’s conduct was not sufficiently bad as to affect the financial settlement.

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Obviously, when a married couple separate one of them is likely to remain living in the former matrimonial home, even if just for a limited period.

But this of course means that the party who left will have their interest in the property tied up, with them receiving no benefit from it.

Wouldn’t it be fair if the party still enjoying occupation of the property should pay rent to the party who left?

The answer to that is: ‘perhaps’, as a recent case, which has made headlines in the national newspapers, demonstrates.

The case concerned a couple who had lived in a five-bedroomed house in Kensington, which was owned by the husband. The marriage broke down and the husband left the property in 2014.

In 2016 the couple agreed a divorce settlement, whereby the wife was to receive a settlement of £11.5 million. She received an initial £6.5 million and was due the balance when the house was sold. However, the sale was delayed in the difficult post-Brexit referendum property market, and did not take place until 2019.

The husband demanded that the wife, who continued to occupy the house until it was sold, pay him £600,000 in back-dated rent, at the rate of £5,000 per week. The wife refused, claiming that she had the right to live in the property rent-free, until it was sold.

The husband took the matter to the court and last year the High Court ruled in favour of the wife. The husband recently appealed against that decision to the Court of Appeal, which will give its decision at a later date.

The decision of the High Court may be thought to suggest that a spouse living in the former matrimonial home cannot be forced to pay occupational rent, as it is called, to the other spouse. However, that is not so.

It is quite possible for a divorce settlement to include an occupational rent provision. The point in this case is that the settlement did not include such a provision, and the husband argued that such a provision should be inferred. Obviously, the High Court did not agree.

It is also possible in certain circumstances for a court to order a spouse to vacate the matrimonial home, and then order that the other spouse should pay them an occupational rent, although such orders are quite rare.

Obviously, anyone considering claiming occupational rent from their (former) spouse should first seek the advice of an expert family lawyer. We can find you an expert that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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It goes without saying that pensions are one of the most important assets on divorce. In fact, in many cases they are one of the most valuable assets, often second only to the former matrimonial home.

It is therefore essential that anyone going through divorce fully understands the issue of pension rights, and what they are entitled to.

But sadly not everyone does understand, with the result that many do not receive their full entitlement.

This applies especially to wives, as demonstrated recently by research undertaken on behalf of the pension provider Legal & General.

The research found that wives are significantly more likely to waive their rights to their husband’s pension as part of their divorce, with 28 per cent of wives doing this, compared to 19 per cent of husbands.

Legal & General rightly say that this could have a significant long-term impact upon wives, particularly as they tend to have less personal pension wealth.

According to the most recent findings from the Office for National Statistics, men currently below the State Pension age have higher (£25,300) median active pension wealth than women (£20,000), and for those aged 65 years and over, median pension wealth for pensions in payment for men is double that for women (£223,933 for men against £112,967 for women).

Unsurprisingly, the research showed that wives are more likely to face financial struggle post-divorce (31 per cent, against 21% of husbands), and worry about the impact on their retirement (16% per cent, against 10% of husbands).

These worrying figures indicate the vital importance of obtaining the best legal and financial advice regarding the issue of pensions on divorce. Clearly wives, especially those at or approaching retirement age, should not be disadvantaged in this way.

In particular, wives need to know the true financial effect of waiving their rights to their husband’s pension, rather than seeking a share of the pension. This is not a step that should be taken without proper advice.

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All divorcing wives (and indeed husbands!) should seek expert legal and financial advice regarding pension rights. We can find you an expert that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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The reader may have noticed in the news that the UK’s transition out of the European Union (‘EU’) was completed on the 31st of December (if not, where have you been?). What you may not realise, however, is that this has significant implications for any family law cases involving the EU.

Just to recap, the UK actually left the EU on the 31st of January 2020. However, there was then a transition period, during which the UK continued to abide by certain EU rules. The transition period ended on the 31st of December.

So what are the implications for family cases involving the EU? (Note that what follows relates only to cases involving the courts of England and Wales.)

There are two main sets of rules that apply to family cases in the EU. One, known as ‘Brussels II’, deals with jurisdiction and the cross-border recognition of judgments. The other, the Maintenance Regulation, sets out rules regarding maintenance cases.

Both sets of rules continued to apply to cases in England and Wales until the 31st of December, but have both now been revoked. This means that they do not apply to any cases starting after the 31st of December.

What does this actually mean? Well, there will be changes in the way it is decided what country’s courts should deal with divorce and children cases, and how court orders relating to such cases made in an EU country are recognised (or not) by the courts of this country. There will also be similar changes relating to maintenance cases, including the enforcement of maintenance orders made in another country.

The details of these changes are quite technical, and are beyond the scope of this post. The thing to take from all of this, though, is that if you are or may be concerned with a family case involving the EU then you really need to instruct an expert family lawyer, who can guide you through the changes. We can find you an expert that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

Finally, it should be mentioned that the rules relating to international child abduction, and the return of abducted children, have not changed, as those rules are incorporated into our law. If your child has been abducted, or if you believe that they are at risk of being abducted, then you should instruct an expert family lawyer immediately – again, Family Law Cafe can help you find an expert.

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We have written here previously about the divorce of Tatiana Akhmedova, former wife of Farkhad Akhmedov, the Russian oligarch and ally of Russian president Vladimir Putin.

In 2016 Ms Akhmedova was awarded a divorce settlement of £453 million by Mr Justice Haddon-Cave in the High Court. It was, and remains, the largest ever divorce award by a court in this country.

Unfortunately, however, Mr Akhmedov has failed to pay the award, and Ms Akhmedova has therefore been endeavouring to enforce payment.

The case has now returned to court as part of those efforts to enforce the award. Ms Akhmedova alleges that Mr Akhmedov transferred cash and assets to their son Temur, in order to avoid paying her the money. Mr Arkmedov and Temur deny the allegation.

The allegations have led to a breach between Ms Akhmedova and Temur, who is reported to have said that he would “never be reconciled” with his mother because “her outrageous, revengeful behaviour” has destroyed their once close relationship.

The case may obviously be interesting to the general public because of the people and amounts of money involved, but can those of ‘ordinary’ means who are going through divorce learn anything from it?

They certainly can. There are at least two lessons that apply in most financial remedy cases.

The first lesson is that getting a financial award is not necessarily the end of the matter. In fact, it may be only half of the battle. An award is of no value if it is not paid, and all too often the party ordered to make payment fails to do so, necessitating enforcement action by the party to whom the award was made.

And enforcement action can be long and expensive, as this case demonstrates. In short, anyone seeking a financial award from the court on divorce should understand that getting an award is not necessarily the end of the matter, and should be prepared to ‘be in it for the long run’.

The other lesson is that long acrimonious divorces can destroy families, with children and other family members ‘taking sides’. As we have seen, this can cause irreparable damage to family relationships.

Now, there may not have been anything that Ms Akhmedova could have done to prevent the breach that has happened between herself and her son, but parties should certainly think very hard before they involve other family members, particularly children, in the proceedings.

And protecting the wider family, and especially any children, from becoming embroiled in an acrimonious dispute is just one of the many reasons why parties to divorce should make every reasonable effort to resolve the matter by agreement.

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If you need to sort out financial arrangements on divorce then you should seek expert legal advice. We can find you an expert that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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A remarkable case was published last month in which a 41 year-old man sought to make a claim for financial support from his parents. The claim failed, but the case raises the question: when can an adult child make a financial claim against their parents?

Normally of course financial claims for children are made on their behalf by a parent, whilst the child is still a minor, i.e. under 18. However, it is possible for an adult child to make a financial claim against their parents, albeit in very limited circumstances.

Note that this post does not refer to claims by an adult child against the estate of a deceased parent – such claims are not unusual. And nor does it refer to civil money claims by a child against a parent, such as debt claims.

So what ‘family law’ claims can a child make against their parent(s)?

Since 1993 child maintenance claims have of course usually been made under the Child Support Act. However, the Act only provides for child support maintenance claims to be made by a parent or carer of the child – it does not include provision for adult children to claim maintenance for themselves.

There are, however, ways in which an adult child can make financial claims against their parents. In summary, there are provisions under which they can claim maintenance or even a lump sum from either or both of their parents.

But there are limitations to such claims, depending upon what type of claim is being made. We will not go into detail, but two particular limitations apply in all cases: a court can only make an order against a parent if:

1. The child is, will be or (if an order were made) would be, receiving instruction at an educational establishment or undergoing training for a trade, profession or vocation, whether or not while they are in gainful employment; or

2. There are special circumstances which justify the making of an order. ‘Special circumstances’ is not defined, but it is generally thought to refer in particular to cases in which the adult child suffers from a disability. There may, of course, be other types of special circumstance, but it is likely to be very rare for a claim to be allowed on this basis.

In short, the law generally considers that a parent’s financial obligations towards their child cease when the child reaches the age of 18 or, if the child is then still financially dependent upon them, when the child is no longer dependent. The child will usually be no longer dependent when they finish education, unless they suffer from a disability, in which case the dependency could be for life.

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If you are, or may be, involved in making an application for maintenance or financial provision for a child then you should seek expert legal advice. We can find you an expert that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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Family Law Cafe offers a modern, agile and compassionate approach to family law, giving you a helping hand when you need it and guiding you through the complexities of this difficult and stressful area. Family Law Cafe is your start-point for getting matters sorted with strategy, support and security.

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