Compensation for a bad marriage?

Most financial cases in divorce are dealt with on the basis of ‘needs’.  This is where there is only just enough to go round (and sometimes not even that) and a judge has to determine what each spouse needs, and how those needs can be met. 

But there are two other principles that a Court can engage as well:-

1. Sharing – where the assets exceed the needs and the judge has to decide to what extent each spouse shares in the surplus; and
2. Compensation – where one spouse claims compensation – usually for a lost career.

 A recent case has resurrected the issue of compensation and looked at it afresh. 

About the case

Two lawyers at a city firm got married. He went on to become a senior partner. She gave up her job to care for their children.  

She then had a mental health breakdown when the marriage ended and hadn’t worked since. The judge found that it was unlikely she would ever work again, even though she was only 45. 

What assets were involved? 

This couple after an 11 year marriage, had nearly £10m to divide. After a bitterly contested case the trial judge found that if they had half each, this would meet the wife’s housing needs and provide her with £100,000 a year for life.  

The wife had actually claimed £331,000 a year but at trial it was mentioned that her case was rather undermined by a budget she had prepared previously suggesting that the family’s entire expenditure was £155,000 per annum! 

So what was the compensation claim about?

The wife said that she should be compensated for the loss of her career. She produced evidence, which the court accepted, that she could have made partner at the firm as well but because she had taken a step back in her career and then had a breakdown, she had lost the opportunity of a financially successful career and felt that she should be compensated for that.

What did the judge hold?

The judge agreed with her approach up to a point. She was awarded an extra £100,000 per annum for a total of 4 years. That was capitalised and so she was given an extra £400,000 bringing her total award to 54% of the assets.

Has this changed the law?

No. The judge stressed that these types of cases were highly unusual and typically compensation claims would fail. The judge’s approach has actually been quite heavily criticised for re-opening an area of argument that previous judgments had sought to close. It will be interesting to see whether this approach will be followed in those rare cases where it is possible to argue for a compensation award. 

What was the outcome?

The wife actually got a fraction more than the husband had actually offered her (he had offered £200,000 and she got £400,000). Although this amount sounds a lot, it  was dwarfed by her legal costs. It is difficult to know whether she felt the litigation was worth it as a result.

Not all cases will involve compensation. If you think that yours might, then please contact our specialist divorce lawyers. We offer a free 15 minute discussion about the issues involved and how we might be able to help you with them. 

I can be contacted on 01206 217320 or email me - philip.hoddell@birkettlong.co.uk.