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The end of the meal ticket for life

Last week, in a landmark judgment, the highest court in the land allowed the appeal of Mr Mills who was battling against his ex-wife's claim for an increase in her maintenance payments. Yet another nail in the coffin for wives seeking to secure on-going financial provision from their husbands following a divorce?

Mr and Mrs Mills divorced in 2002 after a 15 year marriage. Mrs Mills received £230,000 in settlement of her capital claims against her ex-husband, and it was further agreed that he would make annual payments to her of £13,200. However by 2015, after a series of consecutive property purchases and sales, each involving increased borrowing, Mrs Mills had run out of money. She had incurred debts of just over £40,000. She therefore brought the case back to court, arguing that she had a shortfall of just over £4,000 per year. She was looking to Mr Mills to meet that shortfall.

Mr Mills argued that, rather than increasing the amount he should be paying to his ex-wife, the monthly payments should be reduced or should come to an end altogether. His position was that he should not have to pick up the tab for what he considered to be his ex-wife's bad financial decisions since they separated.

The Supreme Court refused to allow an increase in Mrs Mills' periodical payments. It found that provision had already been made for her in the original capital settlement in 2002 and as a consequence it was not fair to expect Mr Mills to meet his ex-wife's needs, which had increased as a result of her arguably unwise financial decisions.

So how does this case fit in with the courts' recent approach to on-going maintenance for ex-wives?

One of the reasons that England - and in particular London - has developed a reputation for being the "divorce capital of the world" is that the courts have over the years developed a very generous approach to the payment of on-going spousal maintenance to the financially weaker party (which is still, more often than not, the wife).

In England and Wales there are three types of spousal maintenance orders: joint lives (payable until the death of either party or the re-marriage of the receiving party); an extendable term (payable for a fixed period which can be extended); or a non-extendable term (a fixed term which cannot be extended under any circumstances).

The concept of what is known as joint lives maintenance is alien to most other countries. Even as close to home as Scotland the approach of courts is radically different and an award of maintenance for the rest of one's life would be inconceivable. There is even a distinction between those cases heard in or around the capital and those dealt with outside of the M25; even just outside London joint lives maintenance orders are less common.

Family law judges have a wide discretion to determine both the amount and duration of maintenance.  The Court will look at each party's income and earning capacity. It will consider the age and circumstances of the parties, for example, whether or not a spouse has qualifications, has worked recently or has childcare responsibilities for young children. The test is whether in light of all of the circumstances, the payee (in this case the wife) can adjust to financial independence without undue hardship.

The general consensus is that the tide is turning and judges are becoming more robust about the notion that the financially weaker party should be supported for life. This view has arguably been reinforced following yesterday's Supreme Court decision. It is becoming increasingly difficult to convince courts that a wife should be awarded a 'meal ticket for life' from her ex-husband. Instead, wives are being encouraged to make sensible financial decisions and take responsibility for their actions.

This is all very well in theory but it can clearly be difficult for those who have been used to their spouse managing the finances throughout the marriage. Immediately following the divorce they are suddenly expected to take control and stand on their own two feet, often without having any idea how to go about it and little to no support. It is therefore important to consider carefully at the time of negotiating an agreement with your ex-spouse how much you will need to live on in the future, both in terms of capital (such as to provide housing) and income (to meet your daily needs). Advice should be sought as to how best to manage this and budget accordingly.

Although the financially stronger party paying pursuant to an on-going maintenance order, may sleep slightly better at night following this latest Supreme Court decision, it remains the case that unless a total clean break has been achieved (i.e. no on-going maintenance payments) there will always be the potential for a second bite of the cherry and the courts will always consider the facts on a case by case basis.

This article first appeared in The Telegraph on 20th July 2018. Find out more about our Family Law services and financial claims.

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