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What impact do recent cases have on divorce settlements?

Divorce law is a constantly evolving field, influenced by new legislation, societal changes and landmark court decisions. In England and Wales, recent cases have played a significant role in shaping divorce settlements, particularly regarding financial arrangements and the division of assets. Understanding these cases can offer valuable insight into how divorce settlements may be approached now and in the future.

Landmark Cases and Their Influence

1. Prest v. Petrodel Resources Ltd (2013) UKSC 13

This case marked a significant moment in divorce law concerning the treatment of corporate assets in divorce settlements. The Supreme Court ruled that properties held by companies associated with one of the spouses could be considered part of the matrimonial assets in circumstances in which the properties are effectively owned by one or both of the parties under a resulting trust(s), without the need to ‘pierce the corporate veil’. This decision has had a considerable impact on high-net-worth divorces, insisting on transparency and fair division of assets, even those shielded under corporate ownership.

2. Wyatt v. Vince (2015) UKSC 14

The Supreme Court ruled that an ex-spouse could file for financial relief even almost two decades after the divorce had been finalised. This case underscored the importance of obtaining a clean break order in any divorce settlement to prevent future claims. It serves as a cautionary tale for those seeking to finalise divorce proceedings without agreeing on a complete financial settlement, as there is no limitation period for ex-spouses to apply to the Family Court for financial relief, irrespective of the strengths or weaknesses of their case.

3. Sharp v. Sharp (2017) EWCA Civ 408

In this case, the Court of Appeal considered whether matrimonial assets should be shared between the parties on an equal basis, irrespective of the length of the marriage. The case resulted in a departure by the Court from the principle of sharing and in which the wife was successful in reducing the capital sum awarded to the husband in a short marriage with no children. This case highlighted the importance of context and individual circumstances in determining fair settlements.

4. Work v. Gray (2017) 3 WLR 535

This case illustrated the significance of assessing contributions to the marriage, where the court considered the doctrine of ‘special contribution’. The court reaffirmed the dicta from earlier case law that ‘special contributions’ must be wholly exceptional in nature, significantly outweighing the standard contributions made by the other spouse and found that the use of term ‘genius’ was unhelpful.

Implications for Divorce Settlements

Focus on Fairness and Transparency: Recent cases emphasise that transparency in financial matters is crucial. Courts are increasingly willing to look beyond conventional assets and explore hidden or complex financial structures to ensure fairness.

Flexibility in Asset Division: The judgments highlight the need for flexibility, allowing courts to deviate from the traditional equal split when circumstances warrant it, particularly in short marriages or in exceptional cases where substantial individual contributions can be established.

Long-Term Financial Agreements: The importance of obtaining comprehensive financial orders, including clean break agreements, is more pronounced, protecting both parties from future claims.

Recent cases in England and Wales demonstrate the dynamic nature of divorce law, reflecting changing attitudes towards fairness and financial independence. These cases underscore the importance of personalised legal advice tailored to individual circumstances. Consulting with a legal expert can help navigate these complexities, ensuring a divorce settlement that is just and equitable. As the legal landscape continues to evolve, staying informed about recent decisions is crucial for anyone going through or contemplating a divorce.

This blog was prepared by Alexander JLO’s divorce solicitor, Guy Wilton on the 15th January 2025 and is correct at the time of publication. With decades of experience in almost all areas of law Guy is happy to assist with any legal issue that you have. He is widely regarded as one of the capital’s leading divorce lawyers. His profile on the independent Review Solicitor website can be found Here