Spousal Maintenance for Life
The thorny issue of spousal maintenance on divorce which is unlimited in time, other than by death or remarriage (a joint lives periodical payments award) has made the headlines with the recent Court of Appeal decision in Mills –v- Mills. This case emphasises the potentially expensive consequences for the payer of such an award and is a salutary reminder that the rate of spousal maintenance can be increased very substantially if the recipient can show a need for financial help.
In Mills –v- Mills the marriage ended in 2002 with a divorce settlement under which Mrs Mills received a lump sum of £230,000 plus modest ongoing maintenance for their joint lives or until her remarriage, while her ex husband retained his business interests. Due to a number of poor investment decisions on her part resulting in the loss of her capital base, she returned to Court some 15 years later for a substantial uplift in her maintenance. Mr Mills sought a full clean break. The Court of Appeal ordered the monthly payouts to be increased to £1,441 so that Mrs Mills could meet her basic needs. He has threatened to appeal to the Supreme Court.
Is it fair for someone to underwrite investment risks taken by their ex spouse and pick up the tab if it goes wrong, despite the passing of many years since their marriage? What this case demonstrates is that the Family Courts prioritise “need” above all else. If you can prove that, despite all reasonable efforts to utilise your earning potential, you are not able to meet your reasonable requirements and support yourself, it is likely to supersede any argument in relation to unequal contributions, short marriage or the number of years post separation. It is the ultimate trump card.
There has, however, been a recent sea change in the judicial view of lifelong maintenance claims, with recommendations that joint lives’ maintenance orders should be the exception. Courts should look at achieving a full clean break after a term of maintenance to enable the recipient (usually the wife) to achieve financial independence without undue hardship.
Baroness Deech has also tabled a Bill calling for a three year cap to be placed on most maintenance payments – any longer and the wife would have to prove hardship. In other words, the burden of proof would shift from the payer to the recipient. This would put us in step with Scotland and many other jurisdictions around the world.
Payment of spousal maintenance is one of the most contentious and acrimonious areas of negotiating a divorce settlement. For men faced with the prospect of a long period of spousal maintenance, they argue that there is no incentive at all for their ex-wives to return to full time work when they have this safety net. For women who have taken long career breaks to raise children, the prospect of trying to re-establish herself in her 40’s or 50’s, deskilled with no current experience, competing in a tough employment market while her ex enjoys a very substantial salary after an unbroken career of many years, can feel wholly unfair.
The need for maintenance often arises due to joint decisions made by couples early on in their marriage when there is no thought of divorce, for one spouse to look after children and run the family home while the other focuses on their career.
Mills is an extreme case and is unlikely to have any real impact on current judicial attitudes to maintenance. It will take an Act of Parliament to impose a statutory limit on spousal maintenance. Whether Baroness Deech’s Bill will attract sufficient support remains to be seen.
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