More Guidance On Financial Needs

In June 2016 the English Family Justice Council (FJC) issued its 'Guidance on 'Financial Needs' on Divorce', aimed at providing the judiciary with a useful tool in relation to the assessment of 'financial needs' - that being one of the statutory factors which the court is required to consider when making a financial order on divorce. The concept of financial needs eludes a precise definition and the Law Commission's 2014 report on 'Matrimonial Property, Needs and Agreements' identified the need for greater clarity and transparency in the quantification of needs, particularly with the growing number of litigants in person and in view of evidence of significant regional disparity in the levels of needs-based support ordered at courts outside London.

The Guidance states, in simple terms, that the size of the available assets and the standard of living enjoyed by the couple before separation will have an impact on the assessment of the parties' ongoing financial needs after divorce. On those two points we are reminded that there is no restriction on the source of assets which might be deployed in order to meet needs but standard of living, whilst described as a 'benchmark' is not a 'lodestar'. Other characteristics of the relationship also come into play; the longer the marriage, the more important the standard of living will be in the assessment of needs. Choices made during the marriage are also relevant - and the Guidance refers to case law showing that where a spouse has given up a career to take care of children the court is likely to assess needs more generously and where resources allow it may be fair and appropriate to make provision for those lifestyle choices to be maintained after the marriage.

Financial orders made to meet needs should be to enable a transition to independent living to the extent that that is possible, although as identified by the Law Commission and endorsed by the guidance, 'the combination of age, length of marriage and duration out of work place may render an ambition of independence impossible'.

Essentially, notwithstanding this fulsome guidance, the real strength and depth of the English family law system is in its discretionary approach; as the guidance states 'we emphasise that each case must be considered on its merits, upon proper exercise of the court's individual discretion'. A brief review of two recent cases where the financial needs of the parties were considered in depth, gives a quick insight into...