The recent judgment in Wright v Wright has added to the growing debate about whether there should be a radical review of the courts’ approach to maintenance payments on divorce.
The debate questions firstly, whether a ‘till death’ obligation to provide maintenance to a former spouse is ever appropriate and secondly, what responsibility should be placed on that former spouse to achieve financial independence.
In Wright, the wife was seeking to appeal a revised order that gradually reduced the level of spousal maintenance payments over a period of time and ceased when the husband reached retirement at 65. The original order was premised on the basis that the wife could, and should, go out and work and must move towards a level of financial independence. The fact that she had not done so at the point of the hearing did not deter the court from putting into effect a revised order which provided very robust encouragement for her to return to work.
The Court of Appeal upheld the revised order and its decision has been interpreted as a signal that the approach to spousal maintenance may be changing.
What is spousal maintenance?
Spousal maintenance refers to payments made by one party to another following a divorce to provide them sufficient income to meet their ongoing needs. It is distinct from child maintenance which in most countries follows a set formula with or without the involvement of the state in its calibration and payment.
In many countries there are strict rules limiting both the amount and duration of spousal maintenance payments which can follow a divorce. At one end of the spectrum, in some countries little or no maintenance at all is available and in others (for example Germany), the maintenance is calculated using official guidelines.
In contrast, England and Wales has an entirely discretionary approach, both to the quantum of maintenance (which can reach well into six-figure sums in big asset or income cases) and the duration of maintenance (which can run for the remainder of a payer’s or payee’s life – a so called ‘joint lives’ order).
This approach to maintenance, coupled with the fact that the court here will look at all of the parties assets, wherever held, and however acquired in deciding the ‘fair’ outcome, has largely been responsible for England and Wales being such an attractive forum for dependent spouses and led to London being referred to as the ‘Divorce Capital of the World’.
A change of approach – encouraging financial independence post-divorce
A more restrictive approach towards spousal maintenance payments has been in discussion for some time. In 2014 the Law Commission’s report ‘Matrimonial Property, Needs and Agreements’ called for more guidance in this area as principles were being applied inconsistently across the country. Baroness Deech’s Private Members Bill (which is currently proceeding through the House of Lords) proposes radical changes to the handling of all finances on divorce, including maintenance.
Mr Justice Mostyn set out a very comprehensive review of the legal framework for spousal maintenance in his decision of SS v NS, which makes for very compelling reading. In his judgment, Mr Justice Mostyn questioned the fundamental thinking behind such payments and explored how to put in place an adjustment period, whereby payments were appropriately and gradually reduced.
In Wright, the court was looking at a variation of a ‘joint lives’ order in favour of the wife. The husband had reached a point where he wanted the court to reconsider the duration of his obligations as he approached the end of his career. This was also in the context of a change in circumstances both in terms of his income (which had not been as high as anticipated at the time of the first order) and his outgoings (which were higher than had been anticipated as the parties agreed that one of their children should attend an exclusive boarding school).
These applications are very common, and even when the court makes a ‘joint lives’ order, it retains the ability to hear a variation application at any time. Where there has been a material change of circumstance, those applications will often lead to a recalibration of the maintenance terms.
As such, Wright and the current discussion is more focused on whether the court should move away from ‘joint lives’ orders and embrace a framework of reducing spousal maintenance in a way which promotes independence and moves more forcefully towards a defined clean break between the parties. This is of course part of the court’s responsibility when looking at any financial orders it should make.
Independence vs ‘Meal Ticket’
The court will always return to the criteria set out in section 25 MCA 1973 in reaching its decision. While criticism as to the quantum and duration of maintenance awards is perhaps justified in some cases, this discretion and flexibility afforded to the court does allow the court to put into effect an outcome which properly reflects the decisions made by the family during the marriage. These decisions concern those that may have long term ramifications on their respective financial positions after the divorce.
If, for example a couple decide that a wife will leave her career to care for their children and they then divorce 20 years later, when the wife has not worked since that decision was made and the husband’s career has flourished, there may be a high level of dependence flowing from those decisions and a resultant reduced level of earning capacity for the wife.
However, Baroness Deech, speaking to the Financial Times, said that spousal support sits at odds with calls for equality where women make up half the posts on FTSE boards and the Supreme Court, suggesting that it sends a “bad message” to women.
One of the arguments in favour of a change of approach to spousal maintenance is that it would empower women, encouraging them to retain financial independence and manage without support following divorce. But this has to be balanced against the courts’ current powers which ensure that no ‘undue hardship’ is brought on either party following a divorce.
In SS v NS, the wife had stayed at home to look after the children but was trying to regain financial independence by becoming a Pilates teacher. The Court of Appeal recognised the ‘sacrifice’ she had made for the benefit of her family and put in place a phased period of maintenance payments which would support her in establishing her new career.
In Wright, the court was faced with a very different scenario, with a wife who had not sought to return to work. The court found that Mrs Wright had made ‘no effort whatsoever to seek work or update her skills.’ Lord Justice Pitchford commented that it was ‘imperative’ for Mrs Wright to become financially independant and support herself, saying that ‘the order was never intended to provide the wife with an income for life. The time has come to recognise that at the time of his retirement, the husband should not be paying spousal maintenance.’
It remains to be seen whether Parliament will conclude that the time has come for the broad discretion afforded to the courts by the MCA 1973 in respect of spousal maintenance (and other financial provision on divorce) is to be restricted. While a move to greater clarity is likely to benefit many families facing divorce, great care must be taken to ensure the courts retain the flexibility that they have in this jurisdiction. This enables them to put into effect an order which properly reflects the decisions made during a marriage and the realities flowing from them when it breaks down. In reality spousal maintenance has only ever been a ‘meal ticket for life’ in the rarest of cases.
Sam Longworth is a partner at Stewarts Law
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