What is Divorce Compensation?
When most of us see headlines about compensation we think that the newsworthy case must be a civil claim for compensation arising out of a road traffic accident or medical negligence. However, in the news last week was a case on ‘divorce compensation’. In this blog we look at what is meant by divorce compensation.
Cheshire Divorce solicitors
If you are in the process of a separation or divorce and want advice on a financial settlement then the family law team at Evolve Family Law can help you. Specialising in complex financial settlement claims and children proceedings, the friendly and approachable divorce solicitors, based at Holmes Chapel Cheshire and Whitefield North Manchester, can help you. Call us on 0345 222 8 222 or contact us online.
Divorce compensation
Divorce compensation is in all the newspapers because of a case involving two solicitors. The couple had been married for about ten years and have two children together. The family wealth amounts to about ten million. The family judge ordered that the husband and wife should each get fifty percent, around five million each.
You may think that £5 million each is a just and fair award as after all the couple had been married for nearly a decade. However, the judge went onto order that the wife should get an extra £400,000 for what was termed by the judge as ‘relationship generated disadvantage’ or divorce compensation.
The judge made the additional £400,000 award because the wife and mother, a Cambridge law graduate, had sacrificed her career as a solicitor to look after the couple’s two children.
The court decision will be of interest to many as it is common for one partner in a relationship to step back from their career to become a house husband or wife or to try to juggle child care and home making with a part time career, thus losing out on job promotions and work bonuses. Often the philosophy is that either a husband or wife has to step back from their career as if they equally share the childcare commitment both careers will suffer.
In some family situations, where one spouse has a lower earnings capacity than the other, the choice may be painfully obvious as to who should take on the role of the main breadwinner. However, in the reported case both husband and wife started out their married life as qualified solicitors and both (rather than one) could have had stellar careers had it not been for the decision to forgo a career to look after the couple’s children.
Can I get divorce compensation?
When a case hits the headlines many people, lawyers included, think that divorce compensation will be the ‘new thing’ and that everyone will be claiming for relationship generated disadvantage. However, the judge in the recent court case, made it clear in his ruling that his decision in the case of the two unnamed lawyers should not open the floodgates to a plethora of relationship generated disadvantage divorce compensation claims. The judge said that relationship generated disadvantage claims should be limited to where there are truly exceptional circumstances.
How do I claim for relationship generated disadvantage?
Compensation for relationship-generated disadvantage can be included as part of your financial claim in divorce financial proceedings. You cannot claim for relationship generated disadvantage if you are in a cohabiting relationship.
The relationship generated disadvantage claim is made as part of your financial settlement claims and assessed at the same time as the judge decides on:
- What the family assets are
- What your needs and your spouse’s needs are (and if you have children what your children’s needs are)
- How your family assets should be divided between you
- Whether you should get the family home or if it should be transferred to your spouse as part of the financial settlement or sold and the proceeds divided between you
- Whether you or your spouse should receive a share of the other’s pension as part of the financial settlement
- Whether a clean break order should be made to prevent further financial claims
- Whether spousal maintenance should be paid and, if so, for how long and how much should be paid.
There are a host of other things that a judge has to consider such as whether one spouse should pay towards the other’s legal costs or not.
Any claim for divorce compensation or relationship generated disadvantage will be added to the list of issues for the judge to rule on and to explain why he/she has allowed an additional award for relationship generated disadvantage or ruled it out in their court judgment.
In the case of the two solicitors it was clearly evident that the wife had given up a lucrative career to care for children and that she had a case to say, that with her qualifications, she could have enjoyed an equally stellar career as her husband had it not been for the fact that the arrival of children seriously damaged her ability to work in a demanding career as a solicitor.
You may take the view that with a financial settlement of around five million the wife did not need the extra £400,000 for ‘relationship generated disadvantage’ as the five million would more than meet her reasonable needs. However, the court has said in previous cases where divorce compensation arguments have been raised, that relationship generated disadvantage is relevant even if their future needs have been met generously through the financial settlement. That is because one spouse has given up their ability to generate an income surplus to needs and so in an exceptional case they can ask a judge to rule that their husband or wife should pay an element of ‘divorce compensation’.
Cheshire Divorce solicitors
If you are separating or getting divorced and are worried about your financial settlement then whether or not you gave up your career you need expert legal advice on your best financial settlement options.
The family law team at Evolve Family Law can help you. Specialising in complex financial settlement claims and children law proceedings the friendly and approachable divorce solicitors, based at Holmes Chapel Cheshire and Whitefield North Manchester, can help you reach a financial settlement that works for you and your family. Call us on 0345 222 8 222 or contact us online .
