UK: Looking For Clarity In 2016

Last Updated: 30 December 2016
Article by Jemma Thomas

2016 has been a year of change. With 2017 fast approaching – what can we take from this year?

Defining needs

There have been various reported decisions in relation to quantifying one party's financial need on separation from their spouse. Most notably Jufalli v Jufalli (where the wife received £53.33m) and BD v FD (where the wife received £8.8m). See: Sometimes with fairness comes frustration.  Quantifying need is a difficult concept and has to be done within the context of the particular family, their resources and their standard of living. The more reported decisions that there are then the better understanding practitioners and parties have as to how the courts determine needs. Furthermore, we were very fortunate in 2016 to have the Family Justice Council Guidance on Financial Needs on Divorce, which provided helpful analysis and summaries of the relevant cases, and will help to improve clarity and promote consistency of approach from the courts. This means that it is easier to advise as to likely outcomes in those rare cases where it is not possible to negotiate an agreed settlement. Greater clarity also makes it easier for clients to negotiate effectively.

Disclosure

2015 ended with the Supreme Court decisions in Sharland and Gohil and the strong message sent to anyone in the midst of divorce proceedings: do not attempt to hide your assets, provide full and frank disclosure. There have been various important high court decisions in 2016 where those who failed to disclose their interests have been caught out and had to pay the price. Most recently in JGW v JGW [2016] EWHC 3000, where the husband had to pay an additional £6.42m to his wife 6 years after their divorce because he had failed to disclose is interest in the trust prior to their agreement. Also, in Al-Baker v Al-Baker [2016], where the judge drew adverse inferences as a result of the husband's non disclosure. See Full and frank disclosure is the first commandment... by Victoria Nottage.  It is clear that the court will not tolerate failure to disclose.

Arbitration

2016 has been a great year for Family Arbitration. The launch of the Children Arbitration Scheme has significantly increased the number of cases where arbitration can provide a tailor made flexible alternative to court proceedings, with efficient and effective resolutions for disputes. The financial arbitration scheme received further endorsement from the judiciary and in DB and DLJ [2016] EWHC 324. The judge decided that the arbitral award was a 'thorough, conscientious and clear piece of work. Its quality is a testament to the merit of opting for arbitration' and that it should be made into a financial order. This judgment very helpfully pinned down precisely the very limited routes to challenge such awards and set out the procedural routes so to do. It provided useful confirmation of the limited circumstances in which an arbitral award would not be made into a court order.  Family Arbitration is no dress rehearsal: it is the first and last night of the show...Mostyn J's decision in DB v DLJ by Natalie O'Shea. We have several trained arbitrators in our department and we are lucky to have Suzanne Kingston who has played a fundamental part in creating the arbitration scheme for family law.

Upcoming Court of Appeal decisions

2017 is likely to bring clarification on 2 important issues in family law as we eagerly await Court of Appeal decisions in Gray v Work and Quan v Bray. In the case of Gray v Work the husband claimed that his contribution to the marriage was unmatched by his wife and he should receive more than half of their assets, the judge disagreed, but he has appealed to the Court of Appeal and we await their decision. This is a particularly interesting issue in family law as it is so difficult to define what amounts to a special contribution to a marriage. It is imperative not to discriminate between the homemaker and the breadwinner and those cases where the courts find one party has made a special contribution are extremely rare.

The Court of Appeal is also due to hear the case of Quan v Bray in early 2017 and their decision should provide further clarity on the issue of nuptial settlements. In this case the vast majority of the parties' assets were held on trust for a charity to protect the Chinese Tigers – the wife argued that the trust was nuptial and so could be varied by the court in order to provide for her, where-as the husband said that the trust was not nuptial and the assets were always, and should continue to be, preserved for the tigers. At first instance the judge agreed with the husband that the trust was not nuptial and so the wife would not be able to have a share of any assets held by the trust. Whether or not a trust is nuptial can have a significant impact on a party's financial settlement, and so it will be extremely helpful to have clarity on this issue.

Family law is constantly evolving and it will be interesting to see what other developments 2017 will bring.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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