Family law reform: Split decisions – Simon Beccle and Nick Manners for The Law Society Gazette

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Simon’s comments have been reproduced below with kind permission. 

White v White

Martin and Pamela White, then aged 23 and 26, married in 1961 and had three children. Their marriage broke down in 1994 and they were divorced three years later.

Throughout their marriage, they ran a successful dairy farming business in partnership together. At the end of their marriage, their overall net worth was estimated at £4.6m.

Mr Justice Holman, sitting in the Bristol district registry of the High Court, at first instance, awarded Mrs White £980,000 – roughly a fifth of the marital assets – to meet her ‘reasonable’ housing and income needs. The Court of Appeal increased her award to £1.5m – about 40% of the assets after deducting legal costs. Both parties appealed to the House of Lords.

Simon Beccle, a partner at London firm Payne Hicks Beach, was one of the lawyers representing Pamela White in that appeal.

‘The world was a different place,’ Beccle explains. ‘Women were still emerging from centuries of male domination and fighting for gender equality. Traditional gender roles – the male breadwinner and the female homemaker – were changing, but slowly.’

When it came to financial provision on divorce, the law expected a husband to provide for his wife’s reasonable requirements, which, says Beccle, usually left most of the wealth with the husband in non-needs-based cases.

Section 25 of the Matrimonial Causes Act 1973, still in force, sets out the criteria judges must take into account when considering how to divide financial resources on divorce.

In practice, there was an unofficial ‘one-third’ rule, says Beccle. This meant that a wife would likely receive a third of the assets and her husband’s income. Asking a husband to pay more than that, he adds, was thought to act as a disincentive for him to work at all.

The Whites’ marriage, notes Beccle, ‘had been a true partnership of equals’. Mrs White ‘not only had the primary role of looking after the home and bringing up the children, but had also played a very active role in the business partnership, which included milking the cows and paying the farm workers’.

Consequently, she felt that the decisions of both the High Court and the Court of Appeal were discriminatory, unfair and did not properly recognise her full contribution to the marriage. ‘She wanted a fair outcome, which she viewed as 50%, or equality,’ says Beccle.

While the Lords recognised the force of the equality arguments put forward on behalf of Mrs White, which is now reflected in law, it did not apply this to her case and upheld the appeal court’s 40:60 split, says Beccle.

Their lordships, led by Lord Nicholls of Birkenhead, did not divide the assets equally and dismissed both appeals. However, for the first time, the House of Lords said that ‘equality should be departed from only if, and to the extent that, there is a good reason for doing so’.

Nicholls went on to say that ‘there should be no bias in favour of the money-earner and against the homemaker and the child carer’.

The Lords, explains Beccle, ‘recognised that the division of assets on divorce had failed to keep pace with changes in society’. Lord Cooke believed the division in the case would ‘do much to enable English matrimonial property law to meet the requirements of contemporary society’.

The case is feted for achieving equality for women in financial outcomes on divorce. So why did Mrs White only receive 40% of the assets? This, Beccle explains, reflected the fact that Mr White had received a modest inheritance shortly before the parties separated and that his father had lent the couple money to purchase one of the farms at the outset.

‘The House of Lords questioned whether this justified a difference of 20% in the overall shares of the parties, but then did nothing about it,’ he adds.

‘The ultimate irony of the case is that while Mrs White won the equality arguments and changed the law, she was robbed by the House of Lords of the just fruits of her victory.’

She ended up with neither of the two farms co-owned with her husband, but received a lump sum, which her solicitor notes, ‘she then used to purchase a farm’.

Beccle recalls: ‘For years afterwards, Mrs White found it hard to accept that the House of Lords did not apply their judgment in her case to the actual facts of her case and did not give her equality.’

Nevertheless, he suggests that the decision ‘turned English matrimonial finance law on its head and meant that the starting point would be equality. Any departure from an equal division of the fruits of the marital partnership would need to be justified and non-discriminatory’.

Nick’s comments have been reproduced below with kind permission.

Reform

Case law since then has continued to evolve, but the principles of English matrimonial law remain, at base, those set out more than 50 years ago.

‘There can be little doubt that law reform is desirable to clarify and commit the changes to the statute book,’ argues Nick Manners, also a partner at Payne Hicks Beach. ‘It is quite extraordinary that the law which governs our marriages today was a product of the time of the three-day week.’

As matters stand, Manners says, ‘judges have considerable discretion to interpret the law, which can lead to different judges reaching vastly different conclusions on the same set of facts’.

Changes in society also militate towards law reform, he adds, as many men and women now share the bread-winning and caring roles more equally.

Others, including Baroness Deech, a former family law lecturer, argue that the current law is patronising and paternalistic, assuming that women are incapable of standing on their own two feet. She and family law solicitor Baroness Shackleton (also a partner at Payne Hicks Beach) advocate a system with greater certainty.

Their proposed Divorce (Financial Provision) Bill envisages an assumption of the equal division of marital property, assets and pensions, time-limited maintenance payments for spouses, maintenance for children up to the age of 21 and legally binding prenuptial agreements – similar to the law in Scotland.

Of course, most financial settlements are never adjudicated upon by a court. Some use out-of-court dispute resolution options and other couples resolve matters by themselves, says Manners. But, he argues, the ‘wide discretion in the law’ can make this difficult and result in those wealthy couples who can afford to go to court racking up substantial legal costs.

‘At the other end of the spectrum,’ says Manners, ‘approximately 26% of parties in financial remedy proceedings are litigants in person who have few assets to argue about and have to try to understand and navigate this highly discretionary system.’

The Law Commission has suggested models to change the status quo, which it says ‘lacks certainty and accessibility’. These are codifying the existing law, incorporating particular reforms in relation to prenuptial agreements, maintenance and property division into the law or implementing fixed rules on how assets are to be divided.