James Thornton, Author at James Thornton Family Law

19 August 2024

Untangling Wealth in High Net Worth Divorce: Key Lessons from IN v CH [2024] EWFC 233

In the recent case of IN v CH [2024] EWFC 233, the complexities of high-net-worth divorces are brought sharply into focus. This case, involving significant assets such as a £42 million home and a €35.5 million yacht, not only highlights the financial intricacies at play but also underscores the broader legal and societal challenges that arise in the dissolution of marriages where substantial wealth is involved.

The Complexity of Asset Ownership: Beneficial Interests and Offshore Companies

At the heart of this case is the legal battle over the matrimonial home—a sprawling estate held not directly by either spouse but through an offshore company controlled by the husband. The wife argued for a beneficial interest in the property, invoking principles of common intention constructive trusts and proprietary estoppel. This raised a critical question: to what extent can one spouse claim an interest in assets held under complex ownership structures, particularly when those structures are designed to obscure direct ownership?

The court's decision to rule against the wife on this matter underscores the difficulties faced by less financially sophisticated spouses in asserting their rights. It also highlights the growing trend of using offshore companies in high-net-worth divorces, a tactic that complicates the equitable distribution of assets. For family law practitioners, this case serves as a stark reminder of the need to meticulously unravel such structures to ensure a fair outcome for all parties involved.

Judicial Discretion in Case Management

Another pivotal aspect of this case was the judge's exercise of judicial discretion. The wife requested an adjournment to provide additional evidence—a request that was denied. Furthermore, the court imposed strict time limits on cross-examination, reflecting a broader trend towards efficiency and decisiveness in financial remedy hearings. While these decisions might streamline the process, they also raise important questions about the balance between expediency and the need for thorough examination in achieving justice.

The Global Context: Impact of War on Financial Proceedings

Interestingly, the husband's financial position was allegedly compromised by the war in his native country, affecting his wealth and, by extension, the proceedings. This element of the case brings to light the often unpredictable external factors that can influence financial remedy hearings. In an increasingly interconnected world, global events—be they wars, economic crises, or other disruptions—can have profound implications on divorce settlements, particularly for high-net-worth individuals with international assets.

Gender, Power Dynamics, and Age Differences

The case also offers a glimpse into the gender and power dynamics at play in divorce proceedings, particularly where there is a significant age difference between the spouses. Here, the husband was in his mid-60s, while the wife was in her mid-30s. This age gap, combined with the husband's control over substantial financial resources, highlights the potential for power imbalances in divorce negotiations. How the courts address such disparities—ensuring that both parties are treated fairly despite differences in age, financial acumen, or negotiating power—remains a critical issue in family law.

Key Pointers for Practitioners

The case of IN v CH serves as a cautionary tale for both legal practitioners and clients. It underscores the importance of:

Understanding Complex Ownership Structures: Practitioners must be adept at navigating the legal and financial intricacies of asset ownership, particularly when offshore entities are involved.
Recognising the Impact of Global Events: External factors, such as wars or economic downturns, can significantly affect financial proceedings. Awareness and preparedness for these influences are crucial.
Balancing Judicial Efficiency with Thoroughness: The court’s emphasis on efficiency should not come at the expense of a fair and thorough examination of the issues, particularly in complex financial cases.
Addressing Power Imbalances: Ensuring equitable outcomes in the face of potential power imbalances, whether due to age, wealth, or other factors, remains a central challenge in family law.

As the landscape of high-net-worth divorces continues to evolve, cases like IN v CH provide valuable insights into the legal, financial, and human factors that shape these proceedings. For practitioners, staying informed and adaptable is key to navigating the intricate waters of modern divorce law.

Published by James Thornton in Blog

Tags: high net worth, hnw, offshore, offshore companies

16 August 2024

Insights from A v M (No. 2) [2024] EWFC 214 – When Investments Shift: A Wake-Up Call for Divorce Lawyers

The recent case of A v M (No. 2) [2024] EWFC 214 offers significant insights into the complexities of financial remedy proceedings in divorce, especially when dealing with intricate financial structures such as private equity investments. This case, adjudicated by Sir Jonathan Cohen, sheds light on the challenges and intricacies involved in enforcing financial orders post-divorce, particularly when unforeseen circumstances arise.

Background: The Original Financial Remedy Order

The original financial remedy order, issued by Mostyn J in January 2022, dealt with the division of assets between a private equity professional, referred to as H, and his former spouse, W. The order required H to pay W specific lump sums based on percentages of his capital and income proceeds from his investments in a private equity firm, X Co.

The order was particularly complex due to the nature of H's investments, which were tied to two funds, Fund I and Fund II. The crux of the issue lay in the distribution of proceeds from Fund I, which was still active at the time of the divorce.

The Dispute: Continuation Fund Complications

The dispute in A v M (No. 2) arose when H's investment in Fund I was partially transferred to a Continuation Fund (CF), a common practice in private equity when a fund is ending but still holds assets that are not yet ready for sale. H received his share of the proceeds from the sale of some Fund I assets but was required to reinvest in the CF, which held the remaining assets.

W argued that she was entitled to share in H’s reinvestment in the CF, rather than being cashed out of the original Fund I investments. She contended that H’s failure to disclose the details of the CF deprived her of the opportunity to share in any future gains from these assets. This raised a critical question: Did the original financial remedy order entitle W to continue benefiting from H's investments in the new fund structure?

The Court's Interpretation: A Matter of Construction

The central issue in the case was the interpretation of the original order. Sir Jonathan Cohen had to decide whether the order gave W a right to share in the CF or whether H's obligation was limited to paying W based on his receipts from the original Fund I investments.

W's case was that the order should be interpreted to allow her to share in the CF, as the order's intent was to give her a fair share of H's wealth as it grew over time. On the other hand, H argued that the order only required him to pay W based on the proceeds he received from Fund I, not from any reinvestments.

Ultimately, the court upheld the original order's intent and found that H was not obligated to share his interests in the CF with W. The order was a contingent lump sum order, meaning W was entitled to a share of the proceeds from the original investments but not from any subsequent reinvestment decisions made by H.

5 Key Tips for Practitioners and Clients

Understanding Complex Financial Instruments: This case highlights the importance of understanding the nature of financial instruments involved in divorce settlements, particularly in high-net-worth cases involving private equity or other complex investments.
Clarity in Drafting Orders: The dispute underscores the need for clarity in drafting financial remedy orders. Practitioners must anticipate potential changes in the structure of investments and clearly define how such changes will affect the division of assets.
Ongoing Disclosure Obligations: H's breach of disclosure obligations was a critical issue. This case serves as a reminder that parties must comply with ongoing disclosure requirements to ensure transparency and fairness in post-divorce financial arrangements.
The Role of Continuation Funds: For those involved in private equity, the use of Continuation Funds is a significant factor to consider in financial remedy proceedings. The decision in this case may serve as a precedent for how courts handle similar situations in the future.
The Importance of Timely Legal Action: W's argument was weakened by the timing of her challenge. It is crucial for parties to act promptly if they believe that a financial remedy order is not being properly implemented.

In conclusion, A v M (No. 2) provides valuable lessons on the complexities of enforcing financial orders in divorce cases, especially in the context of private equity investments. Practitioners should take note of the nuances in this case to better navigate similar challenges in future cases.

Published by James Thornton in Blog

Tags: continuation fund, disclosure, divorce settlements, investments, lump sum orders, private equity

15 August 2024

When is a Gift Not a Gift? A Family Law Perspective on Scott v. Bridge

In the intricate world of family law, the question of whether a financial transfer is a gift or something else entirely can often arise, especially during divorce proceedings or estate disputes. The recent case of Scott v. Bridge [2020] EWHC 3116 (Ch) provides a compelling example of how the courts determine the true nature of such transactions. This case is a crucial reminder that not all "gifts" are as straightforward as they may seem, and what one party may perceive as a generous gesture could be contested as something much more complex.

The Case Background

The dispute in Scott v. Bridge centred around financial transfers and property transactions between Mrs. Lorina Scott, the claimant, and her former daughter-in-law's family, the defendants. The defendants argued that the money and property transferred to them were gifts from Mrs. Scott, freely given without expectation of repayment or return. However, Mrs. Scott contested this, asserting that these transactions were not intended as gifts and that she retained some beneficial interest in the assets.

This scenario is not uncommon in family law, where informal arrangements and verbal agreements often lead to disputes later on, especially when relationships break down or when a family member passes away. The court's role is to unravel these transactions and determine the true intentions behind them.

When is a Gift Not a Gift?

In family law, a gift is typically considered a voluntary transfer of property or money from one person to another, made without any expectation of repayment or return. However, as this case demonstrates, the situation can become legally complex if there is evidence that the giver did not fully intend to relinquish ownership or if the transaction was influenced by mistake, misunderstanding, or even undue influence.

In Scott v. Bridge, the court had to assess whether Mrs. Scott genuinely intended to make outright gifts or whether she expected something in return—either repayment, continued ownership, or a trust relationship. The court explored several key issues:

Intention: Was there clear evidence that Mrs. Scott intended to give away the money and property with no strings attached? This is often the hardest part to prove, especially when large sums are involved and there is no formal documentation.
Influence: Was Mrs. Scott under any undue influence from the defendants, which might have clouded her judgment or pressured her into making these transfers?
Mistake: Did Mrs. Scott make the transfers based on a misunderstanding or mistake about what she was doing, or the legal implications of her actions?

The Court's Findings

The court’s analysis in this case highlights that a gift is not merely about transferring ownership; it’s about the intention behind the transfer. If the giver did not intend to make a gift in the legal sense—meaning they didn’t intend to fully give up ownership and control—then the transaction might not be recognised as a gift. Instead, the court might treat it as creating a trust or loan, which means the recipient could be required to return the assets or compensate the giver.

The judgment serves as a vital reminder for anyone involved in family financial arrangements to ensure clarity and proper documentation. It’s not uncommon for family members to assume that certain transactions are gifts when, in fact, the giver has other expectations. Without clear evidence of the giver’s intentions, these situations can lead to prolonged legal battles and strained relationships.

Key Takeaways for Family Law Practitioners

Document Everything: Encourage clients to document any significant financial transactions, even when dealing with family members. A simple loan agreement or gift letter can prevent future disputes.
Clarify Intentions: When advising clients, ensure they are clear about their intentions and understand the implications of transferring money or property, especially if there’s no formal agreement.
Watch for Red Flags: Be alert to situations where undue influence or mistake might play a role in a client’s decision to transfer assets. If these issues are present, the transaction might not be legally considered a gift.

In conclusion, the case of Scott v. Bridge is a powerful reminder that in family law, a gift is not always a gift. The court’s scrutiny of intention and influence is critical in determining the true nature of financial transfers within families. For those navigating the complex waters of family law, this case underscores the importance of transparency, documentation, and a clear understanding of the legal ramifications of seemingly simple transactions.

Published by James Thornton in Blog

Tags: family gifts, gifts

13 August 2024

Anatomy of a Financial Remedy Case: Insights from DR v ES & Ors [2024] EWFC 176

Financial remedy cases in divorce proceedings are often complex, but the case of DR v ES & Ors [2024] EWFC 176 brings forth an intricate web of financial claims, alleged debts, and questions of company ownership that highlight the multifaceted nature of such disputes.

The Background

The case involves the financial separation of DR (the wife) and ES (the husband) amidst a backdrop of conflicting claims about marital assets, liabilities, and the involvement of third parties—namely, the husband's parents, JS and KS. A significant point of contention revolves around whether certain payments made by the husband's parents were gifts or loans, and the true ownership of a company integral to the couple's financial standing.

Alleged Debts to the Husband’s Parents

One of the central disputes in this case is the alleged debts owed by the couple to the husband's parents. JS and KS asserted that they had made substantial financial contributions to the couple, which should be recognised as loans, thereby forming liabilities that need to be repaid from the matrimonial assets. The wife, however, contested this characterisation, arguing that these were gifts, not loans, and thus should not impact the division of assets.

The court was faced with the challenge of distinguishing between gifts and loans—a common issue in financial remedy cases, where the nature of transactions within families can often be ambiguous. The judgment provides a detailed analysis of the evidence presented, including the intent behind the payments and the lack of formal loan agreements.

Ownership of the Company

Another critical issue in this case was the ownership and value of a company that was a significant asset within the marital estate. The husband claimed that the company, although set up during the marriage, was not a matrimonial asset because it was technically owned by his parents. The wife, on the other hand, argued that the company was set up with the intention of benefiting the family, and therefore, its value should be included in the marital assets subject to division.

The court's decision on this matter was particularly noteworthy, as it had to navigate through complex corporate structures, examine the control exercised by the husband over the company, and determine the true beneficial ownership. This aspect of the case underscores the importance of transparency in financial dealings and the potential for hidden assets to complicate divorce proceedings.

Judgment and Implications

The court ultimately had to make determinations on both the alleged debts and the ownership of the company. The judgment reflects the court’s careful consideration of the evidence and the need to ensure a fair division of assets that reflects both parties' contributions to the marriage.

For practitioners and those interested in family law, this case serves as a stark reminder of the challenges in untangling financial arrangements within families, especially when third parties are involved. It also highlights the importance of clear documentation when large sums of money are transferred between family members, and the complexities that can arise from closely held family businesses in the context of divorce.

Key Points

Documentation is Crucial: This case emphasises the importance of formal documentation in financial transactions within families. Without clear agreements, courts may struggle to determine the true nature of payments—whether they are loans or gifts.
Corporate Ownership and Control: The true ownership of a company, particularly in family businesses, can be a contentious issue. This case illustrates the need for clear evidence of control and beneficial ownership when such assets are included in financial remedy proceedings.
Judicial Discretion: The court’s role in assessing the credibility of evidence and the intentions behind financial transactions is paramount. This case showcases the nuanced approach required to achieve a fair outcome in complex financial remedy cases.

In conclusion, DR v ES & Ors [2024] EWFC 176 offers valuable insights into the intricate challenges that can arise in financial remedy cases, particularly when third-party claims and corporate ownership are involved. It underscores the necessity for clarity and transparency in financial matters within marriages, and the pivotal role of the court in navigating these complexities to deliver equitable justice.

Published by James Thornton in Blog

Tags: company ownership, corporate ownership, debts, family loans

13 August 2024

Relocating to Australia : A Deep Dive into AQ v BQ [2024] EWFC 222

The recent family law case of AQ v BQ [2024] EWFC 222 delivered by Recorder Stott provides an insightful example of the complexities involved in relocation disputes, particularly when one parent seeks to move with the children to a different country. This case highlights the delicate balance courts must strike between the rights of the parents and the paramount welfare of the children.

The Case Background

The case revolved around an application by the mother, AQ, to relocate to Australia with her two sons, aged eight and six. The mother’s motivation stemmed from her new relationship with a partner residing in a rural Australian town and the prospect of a fresh start with improved work-life balance. The father, BQ, opposed the relocation, advocating for a shared care arrangement or, if relocation were allowed, for the children to remain with him in the UK.

The backdrop of this dispute included a history of litigation between the parents, including a previous fact-finding hearing that revealed differing parenting styles and past issues related to the father's disciplinary approach. The case was further complicated by the mother’s assertion of an impending move, regardless of the court’s decision, and ongoing financial uncertainty due to unresolved divorce proceedings.

Key Judgments and Legal Considerations

Recorder Stott’s judgment is notable for its emphasis on a holistic welfare analysis, considering the pros and cons of both parents’ proposals. The judgment leaned heavily on principles established in landmark cases such as Payne v Payne and Re C (Internal Relocation), which underscore that the welfare of the children is the court’s paramount consideration in relocation cases.

One of the most striking aspects of the judgment is the role of the children’s relationship with their father in the decision-making process. The court found that the recent reestablishment of contact between the father and the children was still in its early stages, and further development of this relationship was crucial to the children’s emotional well-being. This point was strongly supported by the Cafcass officer, Ms. Shaw, whose report and testimony suggested that relocation would be premature and potentially detrimental to the father-child bond.

Moreover, the judgment highlighted the potential risk of the father’s contact with the children dwindling if they were to move to Australia, especially given the early stage of their renewed relationship. This concern was juxtaposed against the mother’s desire for a better life in Australia, presenting the court with the challenging task of weighing these competing interests.

Points of Interest

This case serves as a reminder of the complexities involved in international relocation disputes. Key points of interest include:

The Role of Cafcass: The court placed significant weight on the Cafcass officer's report, which emphasised the importance of maintaining and strengthening the children’s relationship with their father. This highlights the influential role Cafcass plays in such proceedings, particularly in providing an objective assessment of the children’s welfare.
Evolving Parental Relationships: The judgment illustrates the dynamic nature of parental relationships post-separation and the impact these can have on relocation decisions. The father’s efforts to improve his parenting and rebuild his relationship with his children were crucial factors that swayed the court’s decision against relocation.
Legal Principles Applied: The case reaffirms that while the principles from Payne v Payne may guide the court, the decision ultimately hinges on a holistic welfare assessment. The court’s refusal to grant the relocation request underscores the absence of any presumption in favour of the primary carer in such disputes.
Long-Term Welfare Considerations: The judgment underscores the importance of considering the long-term welfare implications of relocation, rather than focusing solely on the immediate benefits or desires of either parent.

In conclusion, AQ v BQ [2024] EWFC 222 provides a compelling study of the challenges faced by courts in balancing parental rights with the welfare of children in international relocation cases. The judgment reflects a cautious approach, prioritising the stability and continuity of the children’s relationships over the potential benefits of relocation, offering valuable insights for both practitioners and parents navigating similar disputes.

Published by James Thornton in Blog

Tags: australia, payne v payne, re c (internal relocation), relocation

7 August 2024

What claims can be brought on divorce, and under which statutes?

Financial claims can be brought under several different legislative instruments, including:

the Matrimonial Causes Act 1973, which governs divorce and financial proceedings for married persons;
the Civil Partnership Act 2004, which governs the civil registration of same or opposite sex relationships and their associated property law entitlements, which are largely the same as for married persons under the Matrimonial Causes Act 1973;
the Matrimonial and Family Proceedings Act 1984;
Schedule 1 to the Children Act 1989;
the Married Women’s Property Act 1882; and
the Domestic Proceedings and Magistrates' Courts Act 1978.

The following rules also apply to financial orders and remedies:

the Family Procedure Rules 2010; and
Practice Directions, in particular Practice Direction 9A.

There is no time limit for making an application for a financial order.

However, a delay can significantly affect the orders which may be made. An example of this is Wyatt v Vince [2015] UKSC 14 where the wife made an application 30 years after the parties had separated. The application was allowed, but the order which sought £1.9 million was described as ‘out of the question’. It is invariably better to consider finances alongside the divorce or dissolution.

Section 28(3) of the Matrimonial Causes Act 1973 provides that if either party remarries after a decree absolute, that party cannot seek a financial provision or property adjustment order against the other party under that Act.:

"If after the grant or making of a decree or order dissolving or annulling a marriage either party to that marriage remarries whether at any time before or after the commencement of this Act or forms a civil partnership, that party shall not be entitled to apply, by reference to the grant or making of that decree or order, for a financial provision order in his or her favour, or for a property adjustment order, against the other party to that marriage".

An application under the Trusts of Land and Appointment of Trustees Act 1996 is possible. The right to apply for pension sharing is not lost on remarriage.

If an application is made before a party remarries but is not pursued until after remarriage, the party can pursue the application. However, the court would take the new partner's financial circumstances into account, and it would not be possible for the married party to pursue a claim for periodical payments for themselves.

Resolving all of the financial elements of the divorce or dissolution before cohabiting or remarrying will usually result in a better outcome for the client.

Available Claims

According to s 23 of the Matrimonial Causes Act 1973, the court has jurisdiction to hear a financial claim if it has jurisdiction to hear an application for divorce, nullity or judicial separation.

The court’s powers are wide regarding the types of orders it can make. A financial order is defined in r 2.3 of The Family Procedure Rules as the following:

An avoidance of disposition order. An application for this type of order is filed where a party has disposed of assets intending to prevent their spouse from accessing them through a financial claim.
An order for maintenance pending suit or pending outcome of proceedings. Interim orders like these require a party to financially maintain their spouse while financial affairs are being resolved through the court.
An order for periodical payments or a lump sum under the Matrimonial Causes Act 1973 or the Civil Partnership Act 2004.
A property adjustment order includes orders to sell the property to facilitate the payment of a lump sum, transfer of the property into the name of one party either permanently or for a while, or settle property on trust. These orders can apply to real, personal or business property, most commonly the family home.
An order varying the terms of a settlement which has a nuptial element: normally a trust, but other arrangements can be regarded as settlements.
A variation order can vary an existing financial order and can be important where a client’s circumstances have changed significantly since the original order was made.
Pension sharing or pension compensation sharing order.
An order for payment in respect of legal services.

When making a financial order, the court may uphold, vary or completely exclude the terms of any pre or post-nuptial agreement.

Practical Considerations

Unresolved Financial Matters: If financial matters were not resolved at the time of the divorce, it is crucial to address them before either party remarries. Once remarriage occurs, the ability to make certain financial claims is significantly limited.
Legal Advice: It is advisable to seek legal advice to understand the implications of remarriage on financial claims and to ensure that any outstanding financial matters are resolved appropriately.

Published by James Thornton in Blog

Tags: financial claims, financial remedy

7 August 2024

What factors does the court consider when deciding on an application to change a child’s name?

When dealing with an application for a change to a child's name, the court's primary consideration is the welfare of the child, as outlined in Section 1 of the Children Act 1989. The court will take into account various factors to determine whether the name change is in the best interests of the child. Here are the key considerations:

Welfare Checklist

The court will consider the welfare checklist set out in Section 1(3) of the Children Act 1989, which includes:

The ascertainable wishes and feelings of the child: The court will consider the child's views, taking into account their age and understanding.
The child's physical, emotional, and educational needs: The court will assess how the name change might impact these needs.
The likely effect of any change in the child's circumstances: The court will consider the potential impact of the name change on the child's life.
The child's age, sex, background, and any characteristics the court considers relevant: These factors will be taken into account to understand the context of the name change.
Any harm the child has suffered or is at risk of suffering: The court will consider whether the name change could cause or mitigate harm.
How capable each parent (and any other relevant person) is of meeting the child's needs: The court will evaluate the ability of the parents to support the child through the name change.
The range of powers available to the court under the Children Act 1989: The court will consider all available options to ensure the child's welfare.

Additional Considerations

Parental Consent: If both parents have parental responsibility, the consent of both parents is generally required for a name change. If one parent does not consent, the court will need to decide whether to override that parent's objection.
Identity and Continuity: The court will consider the importance of the child's identity and continuity, including the significance of the current name and the reasons for the proposed change.
Cultural and Religious Factors: Any cultural or religious implications of the name change will be taken into account.
Impact on Relationships: The court will consider how the name change might affect the child's relationships with family members and others.
Practical Considerations: The court will also look at practical issues, such as the administrative process of changing the name and any potential confusion or difficulties that might arise.

Case Law

Several cases provide guidance on how the court approaches applications for a child's name change:

Re W, Re A, Re B (Change of Name) [1999] 2 FLR 930: The court emphasised that the welfare of the child is the paramount consideration and that the child's name is an important part of their identity.
Dawson v Wearmouth [1999] 1 FLR 1167: The House of Lords held that a child's name should not be changed without good reason and that the court should consider the child's welfare as the paramount consideration.
Re C (Change of Surname) [1998] 1 FLR 656: The court highlighted the importance of stability and continuity in a child's life and the need to consider the child's welfare in the context of their family relationships.

Ultimately, the court's decision will be based on what it considers to be in the best interests of the child, taking into account all the relevant factors and circumstances.

Resources

Children Act 1989
Re W, Re A, Re B (Change of Name) [1999] 2 FLR 930
Dawson v Wearmouth [1999] 1 FLR 1167
Re C (Change of Surname) [1998] 1 FLR 656

Published by James Thornton in Blog

Tags: change of name, child name, children, children act

7 August 2024

Treatment of Pension Accruals Prior to Marriage – Financial Remedy on Divorce

In financial remedy proceedings in England, the treatment of pension accruals prior to the start of a relationship can be complex and is often subject to judicial discretion. The general principle is that assets acquired before the marriage or civil partnership are considered non-matrimonial property. However, the court has the discretion to include these assets in the financial settlement if it deems it fair to do so.

Key Considerations

Non-Matrimonial Property Pension accruals prior to the start of the relationship are generally considered non-matrimonial property. This means they are not automatically subject to division between the parties.
Needs of the Parties The court will consider the needs of both parties, including their housing and income needs. If the needs of one party cannot be met without including pre-marital pension accruals, the court may decide to include them in the financial settlement.
Length of the Marriage The length of the marriage or civil partnership can influence the court's decision. In longer marriages, the distinction between matrimonial and non-matrimonial property may become less significant, and the court may be more inclined to share pre-marital pension accruals.
Contributions The court will also consider the contributions made by each party to the marriage, including non-financial contributions such as homemaking and childcare. If one party has made significant contributions, the court may decide to include pre-marital pension accruals in the settlement.
Fairness The overarching principle is fairness. The court will aim to achieve a fair outcome for both parties, taking into account all the circumstances of the case.

Relevant Case Law

Miller v Miller; McFarlane v McFarlane [2006] UKHL 24 This case established that non-matrimonial property, including pre-marital pension accruals, can be included in the financial settlement if it is fair to do so.

W v H (Divorce: Financial Remedies) [2020] EWFC B10 In this case, HHJ Hess addressed the issue of post-separation pension accrual, stating that post-separation contributions are generally considered non-matrimonial property. While this case specifically dealt with post-separation accruals, the principles can be analogously applied to pre-marital accruals.

W v H (Divorce: Financial Remedies) [2021] EWFC B63 Recorder Salter endorsed the approach of HHJ Hess, referencing the Pensions Advisory Group (PAG) Report in his judgment.

Guide to the Treatment of Pensions on Divorce (2nd edition) The PAG Report, judicially endorsed, highlights the complexity of pension offsetting and emphasises fairness in needs-based cases.

Practical Steps

Disclosure Both parties should provide full disclosure of their pension assets, including details of when the pension was accrued.
Valuation Obtain a valuation of the pension assets, distinguishing between pre-marital and marital accruals.
Negotiation Consider negotiating a settlement that takes into account the needs and contributions of both parties, potentially using mediation or collaborative law.
Legal Advice Seek legal advice to understand how the principles of fairness and needs may apply to your specific circumstances.

Conclusion

While pension accruals prior to the start of a relationship are generally considered non-matrimonial property, the court has the discretion to include them in the financial settlement if it is fair to do so. The key factors the court will consider include the needs of the parties, the length of the marriage, and the contributions made by each party.

Published by James Thornton in Blog

Tags: PAG, PAG report, pensions

6 August 2024

Understanding the Latest Family Law Reforms: Practice Direction Update No. 5 of 2024

The family law landscape is continually evolving to better serve the needs of families and streamline legal processes. The latest update, Practice Direction Update No. 5 of 2024, brings significant amendments to several key Practice Directions under the Family Procedure Rules 2010. These amendments aim to streamline procedures, encourage non-court dispute resolution, and enhance the clarity and efficiency of family law proceedings. The changes come into effect from 31 May 2024 and 1 June 2024. Here's what you need to know:

Key Amendments and Their Implementation Dates

Practice Direction 7A: Effective 1 June 2024, this amendment refines procedures for applications in matrimonial and civil partnership proceedings. It now requires documents to be verified by translators, ensuring accuracy and reliability in legal documentation.
Practice Direction 9A: From 31 May 2024, a new pre-application protocol emphasises resolving disputes without court intervention. It encourages parties to engage in non-court dispute resolution (NCDR) and mandates full and honest disclosure before seeking financial remedies.
Practice Direction 12B: Also effective from 31 May, this change introduces a pre-application protocol for child arrangements, guiding parties to resolve disputes through NCDR and outlining available support resources.
Practice Direction 12F: This update, effective immediately upon signing, updates communication protocols with UK Visas and Immigration, enhancing coordination in international child abduction cases.
Practice Direction 36N: Extends the online filing pilot scheme for financial remedy applications to 31 December 2024, promoting the use of digital processes in family law.
Practice Direction 36ZE: Introduces temporary modifications to procedures for parental responsibility and consent orders, ensuring that safeguarding checks and consent requirements are met before court orders are made.

The Introduction of Practice Direction 41G

Effective 1 June 2024, this new direction facilitates electronic proceedings for certain matrimonial and civil partnership orders, marking a significant step towards modernising family law procedures through digital means.

The Emphasis on Non-Court Dispute Resolution (NCDR)

The updated protocols underscore the importance of NCDR in resolving family disputes. Whether through mediation, arbitration, or collaborative processes, the aim is to reduce the adversarial nature of legal proceedings and find amicable solutions wherever possible.
Parties are now expected to attend a Mediation Information and Assessment Meeting (MIAM) before initiating court proceedings, unless exemptions apply. This step is crucial in promoting understanding and utilisation of NCDR methods.

Implications for Legal Practitioners and Parties

Legal representatives must now ensure their clients are fully informed about the new protocols and the importance of honest disclosure and NCDR.
The court's expectation of compliance with these protocols highlights a shift towards more cooperative and less confrontational dispute resolution methods, potentially reducing the emotional and financial toll on families.

Conclusion

The Practice Direction Update No. 5 of 2024 represents a significant move towards a more efficient, transparent, and resolution-focused family law system. By embracing NCDR and digital processes, these amendments aim to better serve families and streamline the legal journey through complex personal matters. Legal practitioners and parties alike should familiarise themselves with these changes to navigate the new landscape effectively.

Published by James Thornton in Blog

Tags: adr, family law reform, ncdr, practice direction, protocol

5 August 2024

Shared Parenting: Evolving Approaches in Family Law Cases

Shared parenting has become an increasingly favoured arrangement in UK family law, reflecting a growing recognition of the importance of both parents' involvement in their children's lives post-divorce. Recent court cases highlight how UK courts are adapting to support balanced parenting time and the evolving legal standards for shared care arrangements.

Re C (A Child) [2018] EWCA Civ 1103

In Re C, the Court of Appeal emphasised the importance of both parents playing a significant role in their child's life. The court overturned a lower court's decision that had limited the father's contact with his child, reinforcing the principle that maintaining relationships with both parents is typically in the child's best interests.

Key Lesson: Courts are increasingly prioritising the involvement of both parents in their child's upbringing, moving towards more balanced child arrangements.

Re G (Children) [2012] EWCA Civ 1233

In Re G, the Court of Appeal ruled in favour of a father seeking more contact with his children, underscoring that parental involvement should not be unduly restricted without compelling reasons. This case reinforced the idea that both parents should have substantial contact with their children, provided it serves the children's best interests.

Key Lesson: The judiciary supports substantial parental contact, reflecting a shift towards more equitable shared parenting arrangements.

Re W (Children) [2012] EWCA Civ 999

In Re W, the Court of Appeal considered the welfare of the child as paramount, reiterating that shared parenting should be the default unless evidence suggests it would be detrimental. This case highlights the emphasis on child welfare in determining custody arrangements.

Key Lesson: The child's welfare is the paramount consideration in child arrangement decisions, with shared parenting being favoured when it aligns with the child's best interests.

B (A Child) [2014] EWCA Civ 43

In B, the court addressed the importance of continuity and stability for children, affirming that shared parenting does not necessarily mean equal time but rather meaningful and regular contact with both parents. The decision focused on the practicalities and needs of the child, advocating for flexible arrangements.

Key Lesson: Shared parenting emphasises meaningful involvement over strict time equality, focusing on the child's need for stability and continuity.

T (Children) [2019] EWCA Civ 1366

In T, the Court of Appeal reinforced that any decisions limiting parental contact must be based on clear, substantiated concerns about the child's welfare. The ruling stressed that shared parenting should be disrupted only when absolutely necessary to protect the child's well-being.

Key Lesson: Restrictions on parental contact require strong evidence, affirming a presumption in favour of shared parenting unless significant welfare concerns are proven.

Conclusion

These cases illustrate the evolving approaches to shared parenting in family law. The judiciary increasingly supports balanced involvement from both parents, focusing on the best interests and welfare of the child. By understanding these legal precedents, parents can better navigate custody arrangements and work towards amicable and fair shared parenting solutions.

For tailored advice and support, consult a family law solicitor who can guide you through the complexities of shared parenting arrangements and ensure the best outcomes for your family.

Published by James Thornton in Blog

Tags: case law, shared parenting

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