in this edition
Is maintenance a meal ticket for life?Cohabitation - the next instalment…
Review your will on divorce - a reminder
How wide does English law cast its net?
Family Law Cases - Who pays for them?
Our latest reported case!
Family Law
Is maintenance a meal ticket
for life?
Should courts actively
encourage maintenance
recipients to strive to become
more self-sufficient?
Is maintenance
a meal ticket for life?
Maintenance or periodical payments - known as alimony in the USA – is the ongoing
payment after the end of a marriage by one spouse to the other. In practice, maintenance
is most often paid by a husband to a wife. Because of the ongoing financial relationship
created, a maintenance order is the flip side of a “clean break” – a clean break ends the
parties’ financial interdependence, a maintenance order continues it.
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A maintenance order may be for a defined period of time (“term” orders), or for “joint lives”. Joint lives means that the obligation continues until the recipient remarries, the payer or payee dies or the court makes a further order. A joint lives order is, from the payer’s perspective, the most onerous of maintenance orders. To end the obligation, or change the amount payable, the payer must either reach an agreement with the recipient, or else apply to the Court to vary.
So, what type of maintenance order is suitable in any given case? At the heart of this enquiry is the question, “When is it reasonable in the circumstances of the particular case for the recipient’s financial dependence on the payer of maintenance to end – if ever?”
We often find Judges (particularly those sitting in Central London) reluctant to make term orders. This is due to their reluctance to “crystal ball gaze” – to look into the future and predict when the recipient of maintenance should be able to adjust, without undue financial hardship, to the end of financial dependence on the former spouse. Accordingly, joint lives orders tend to be the default setting.
In the cases which are not clear (where there are cogent arguments for a term maintenance order, for example,
following a short marriage) should courts actively encourage maintenance
recipients at least to strive to become more self-sufficient?
The most common question we face from the high-earning client who works extremely long hours in a demanding and stressful role and who faces the prospect of a joint lives maintenance order is along these lines: “Why should my former spouse be free to enjoy the
benefits of my hard work and future endeavours without any encouragement to work towards reducing or
extinguishing their dependency?” Baroness Deech’s view on the approach of English courts to the maintenance issue has been widely reported. In her article published in 2009 ([2009] Fam Law 1140, “What’s a Woman Worth?”) she observed: “The divorce courts are still trying to put women in the position they would have been in had the marriage not ended”. Whilst calling for urgent reform of the current law she said:
“My extreme view, which will never hold sway, is that no maintenance should be payable unless the claimant spouse is unable to work or has the care of young children. Her incapacity for work should be one for which there is no state support and which is also fairly attributable to cohabitation with the other spouse, and for which it is reasonable to expect him to pay… The primary aim of
maintenance should be rehabilitative; it should be permanent only for older women and the incapacitated who are not cared for by the state.”
Baroness Deech’s views will no doubt be considered extreme by some. However, she raises important points about whether our approach to maintenance promotes dependency.
There is a tension between on the one hand “crystal ball gazing”, and on the other the risk of
attempting to predict the future. The “safer” option might appear to be making a joint lives order, leaving the paying party with the onus then of applying in the future to vary or discharge the obligation.
However, this could result in unfairness to the payer, and leave the payee with little incentive to reduce her dependency. Arguably, a term order (which transfers the onus to the payee to demonstrate why she has been unable to achieve independence) would encourage a recipient of maintenance to strive to achieve financial independence. If, for legitimate reasons, the recipient requires ongoing maintenance, then the term could be extended. Perhaps this is fairer than having a default setting whereby a joint lives order is made in most cases simply because of the difficulty in forecasting the future.
Whatever one’s personal view, there are plenty of arguments which we can deploy on our clients’ behalves, whether acting for the payer of maintenance or the recipient as to what is the appropriate form of order.
Note: This article is based on an article written by Charlotte Bradley and Emily Moore for the Family Law Journal in July 2011.
Emily Moore, Associate
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Remembe
r
to review
your will
on divorc
e!
Kingsley Napley l kingsleynapley.co.uk
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Autumn 2011
Cohabitation
–
the next instalment…
Leonard Kernott and Patricia Jones purchased a property together (in joint names
with a joint mortgage) in 1985. They lived there together for eight years. In 1993,
Mr Kernot moved out. Ms Jones remained living at the property with their two
children, paying the mortgage and expenses herself – without contribution from
Mr Kernott.
In 2006, 13 years after he had moved out, Mr Kernott issued proceedings to
realise his share of the property. The court was invited to determine his
entitlement. Unsurprisingly, Ms Jones argued that her interest (irrespective of the
legal title) had increased since 1993, on account of her contributions without
assistance from Mr Kernott.
In 2008, a County Court Judge agreed with her and awarded her a 90% interest in
the property. Mr Kernott appealed to the High Court which, in July 2009, upheld
the earlier decision. Mr Kernott further appealed to the Court of Appeal.
In May 2010, the Court of Appeal overturned the earlier decisions and found that
Mr Kernott had a 50% interest in the house interest notwithstanding the passage
of time and his lack of contribution since 1993. Ms Jones referred the case to the
Supreme Court which heard legal argument on 4 May 2011. Judgment is awaited
with considerable interest…
The Supreme Court is right to take its time – its decision will prove significant in
our society where many couples choose to live together but not to marry or enter
into a civil partnership. As Chris reported in his earlier piece, the most recent
‘clarity’ on cohabitees’ property rights came four years ago in
Stack –v- Dowden
.
That case established the presumption (which will carry the day in many cases)
that one’s interest in a property is defined by the legal ownership. Overcoming that
starting presumption (as Ms Jones seeks to do) was made more difficult as a result.
The central conundrum with which the Supreme Court must grapple is whether
it is fair to restrict a claim to property to the legal interest, or whether events
following separation could and should give rise to a different result. Should a
court be able to infer what the parties intended, and use that inference to decide
that their respective interests in the property are different from the legal title?
The headline message remains: cohabiting couples should take legal advice when
purchasing a property. The preparation of a Deed of Trust that records clearly
what is intended, and (in any event!) a review of the position on separation, are
eminently sensible steps. Doing nothing might have some very unexpected and
costly consequences.
Lucy Thomas, Senior Associate
In our January Edition, Chris McIntosh provided an
overview of property rights of unmarried couples.
The case of
Kernott –v- Jones
[2010] EWCA Civ 578
brings the position up to date.
On divorce - the pronouncement of
Decree Absolute, or the final decree - any
gift in a Will to a former spouse lapses (as
if they had died) and passes instead to the
next in-line beneficiary. A divorce does
not cancel a Will, but does cancel those
parts of it relating to an ex-spouse.
Divorcing couples should, therefore,
review their estate planning as part of the
divorce process, and make or update (as
appropriate) a Will to govern matters
going forward.
Clients should also consider the position prior
to Decree Absolute when they remain legally
married to their spouse, albeit separated.
Separation does not affect a Will and so, if one
party dies when divorcing but prior to Decree
Absolute, their estranged spouse could still
benefit under the terms of an existing Will.
Practical steps can be taken to address this,
such as the preparation of a new Will or, on an
interim basis, the preparation of a codicil to an
existing Will or a letter (preferably witnessed
by at least 2 people) setting out a person’s
wishes. Advice from expert practitioners
should be taken to ensure that the most
appropriate steps are taken.
In a different context, marriage will
automatically invalidate an existing Will made
by a party to the marriage unless that Will has
been made “in contemplation of” the marriage.
Clients who are planning to marry should
therefore consider making a new Will.
For more information on reviewing your Will
please contact Matthew Duncan, Partner and
Head of Private Client, at
mduncan@
kingsleynapley.co.uk
or on
020 7814 1200
.
Lucy Thomas, Senior Associate
How wide does
English divorce
law cast its net?
Generally, English law recognises at face value a marriage
celebrated overseas. The same is not always true of a foreign
divorce – or more accurately, the financial orders made
following a foreign divorce.
The short case study below is an example of just one situation
where the English Court imposed a financial remedy in
respect of a couple divorced abroad, even though the foreign
court had already made a financial
order:-The husband and wife married in England and moved to
Japan with the husband’s employment at the beginning of
the marriage. They had two children, who were both British
citizens. The husband divorced the wife in Japan. She
received very limited financial provision from the Japanese
Court: a small amount of capital and maintenance for the
children, but no maintenance in her own right.
Following the divorce, the wife moved to England with the
two children. Upon arriving here, the wife brought an
application seeking maintenance for herself, a school fees
order and capital to enable her to purchase a home. The
English Court awarded her the relief she sought.
Under Part III of our Matrimonial and Family Proceedings Act
1984 (“MFPA”), it is possible to seek financial provision here
following the pronouncement of a divorce overseas. This is
provided certain conditions are fulfilled.
The permission of the English Court must be obtained before
an application under the MFPA can proceed. A Judge deciding
the application is obliged to consider whether England and
Wales is an appropriate venue for the application. Any
applicant under the MFPA will need to demonstrate a real and
substantial connection to England and Wales. If the
preliminary conditions are satisfied, the English Court may go
on to make a range of financial orders, including pension
sharing orders. This is especially useful if the foreign Court’s
powers to deal with pension assets are limited or
non-existent. The welfare of any minor children will be the Court’s
first consideration.
Applications under the MFPA are becoming increasingly
popular, in keeping with the growing number of marriages
between foreign nationals with homes and assets in more
than one country. Clients divorced abroad should bear in mind
the potential entitlement to make an application under this
legislation, especially if the foreign court has made
inadequate (or no) orders for financial provision.
Claire Wood, Solicitor
Funding legal advice is a perennial difficulty, especially when one party controls the purse strings. Family lawyers and Judges in England and Wales have been inventive in finding practical solutions to this problem. But those solutions can be expensive and raise problems of their own. Funding legal costs therefore remains a real concern for many of our clients.
As long ago as 2000, our courts confirmed (in a case called A-v-A) that an element to meet legal costs can be included in a monthly maintenance claim in divorce proceedings. More recently, in several cases in which we were involved, the English courts have confirmed that one party might be ordered to contribute to the legal costs of the other in proceedings about
arrangements for children – where they live, where they go to school, contact, etc. So, an early court application can help ensure funds are available to meet legal costs, in the absence of sensible agreement about the issue.
Prior to these decisions, the paradigm arrangement was that wealthy husbands or fathers would pay privately for their legal advice, whilst wives or mothers would instruct legal aid lawyers. Orders requiring a contribution to legal costs were not then available, or indeed necessary. Since then, swingeing and relentless cuts have decimated the civil legal aid budget. Legal aid in many family cases will disappear almost entirely in the next few months. Solicitors prepared to undertake family law will decrease in number. So, orders to help underwrite the costs of legal advice – a costs funding order - will become even more important.
Are costs funding orders available as of right?
No. The Court of Appeal said in 2006 (in a case called Currey) that a party seeking a costs funding order must show all other options “cannot reasonably be deployed”. Only then would the court consider making a costs funding order against the other party. What is not clear is the extent to which other options must be exhausted before the court will make a costs funding order (see the table below for some alternative funding options in family cases).
For example, is it reasonable for the poorer party to rely on legal aid, whilst the wealthier retains a magic circle solicitor and a QC? Unsurprisingly, judges see such arrangements as unfair. There are other difficult questions. In what circumstances is it reasonable for the party struggling to meet legal costs to borrow from a third party – a loan from a bank or building society, from family or friends, or from a private bank (in cases where the amounts in issue justify such a loan)?
Clients often ask us to explore funding with our private bank contacts. Whether those contacts are prepared to provide funding varies from case to case. Likewise, the circumstances in which the court is prepared to make a costs funding order is variable depending on the individual case and (to a degree) the Judge hearing it.
What magnitude of costs funding order will be made?
The level of costs funding often does not match the overall legal costs. Costs funding orders therefore can act as a practical cap on the level of legal fees. The financially more savvy party often tactically makes a low costs funding offer. If too low, the proposed recipient might consider it just as well to go to court and argue the toss. Depending on which side of the application you are on, the practical limitations of a costs funding order is either eminently sensible, or constitutes an unfair playing field!
The array of funding options may bewilder clients, especially expatriates not familiar with our financial or legal culture. In some cases, steps may need to be taken swiftly to safeguard the welfare of children or protect assets. Funding concerns in those circumstances represent added complication and worry. It is vital to seek early advice about legal options and how they might be funded. Clients can expect family lawyers today to be informed about alternatives for funding a case, as well as commercially-minded about their respective pros and cons.
William Healing, Partner
Family cases
-who pays the piper?
MAIN SOURCES OF FUNDING PRIVATE FAMILY
CASES:-• Legal aid – R.I.P. 2011?*
• Private bank loan – low rate to foster relationship
• High street bank loan - commercial rate
• Family and friends
• Costs allowance – Court Order
• “No win, no fee” or conditional fee arrangements are currently NOT PERMITTED in family cases.
*Will still be available for some child abduction and domestic violence situations.
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Kingsley Napley l kingsleynapley.co.uk
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IM
Miranda Baker and Emily Moore
represented the successful Respondent
wife in a Court of Appeal case reported
as K –v- L [2011] EWCA Civ 550
(http://
www.bailii.org/ew/cases/EWCA/
Civ/2011/550.html)
. Judgment was
given on 13 May 2011. The husband was
claiming £18 million out of assets of
£57 million. The Court of Appeal
unanimously confirmed the High Court’s
decision to award him (only) £5 million.
That award reflected the wife’s open
offer made prior to High Court hearing.
We were also very fortunate to be able to
persuade the Court of Appeal to impose
stringent reporting restrictions on the
Judgment. The Court made clear that
such an order was exceptionally unusual
in a matrimonial financial case; the facts
of this case justified the order in order to
protect the parties’ children.
Our latest
reported case!
William Healing has joined us as a partner. He will add to
and help develop our international family law expertise.
William’s mother tongue is French, and he has strong links
with lawyers abroad. William writes and speaks regularly
on international family law issues, with a particular
emphasis on financial cases. Prior to joining, he developed
a department over nine years at Woodford Stauffer, with
clients from London, Surrey and Hampshire. William
originally trained at the Bar, before working for specialist
London family lawyers.
Welcome to
William Healing
Bienvenue!
/
Kingsley Napley’s Family team in the press
“We’re getting there…”
Jane Keir comments on the Supreme Court’s decision in Radmacher v Granatino, on
the International Academy of Matrimonial Lawyers newsletter February 2011. Jane is a Fellow of IAML.
“The English Pre-Nup: A Different Animal to the European Marriage Contract”
, Charlotte Bradley in
International Family Law Journal, March 2011. Charlotte is a Fellow of IAML and member of the Resolution
International Family Law Committee.
“Civil Law Principles from European Jurisdictions: Do We Still Drive on the Left?”
William Healing, in
International Family Law Journal, June 2011. William has just joined as a partner – see above.
“The Matrimonial and Family Proceedings Act after Agbaje”
, a look at financial relief after foreign divorces,
William Healing in Family Law Journal (of England and Wales), June 2011.
“Enter a civil partnership in haste…”
, Chris McIntosh compares the developments in the recognition of
same sex relationships in New York and England and Wales in the Huffington Post UK.
Meet the Team
Kingsley Napley LLP Knights Quarter 14 St John’s Lane London EC1M 4AJ t +44 (0)20 7814 1200 f +44 (0)20 7490 2288 dx 22 Chancery Lane w www.kingsleynapley.co.uk e [email protected] Kingsley Napley LLP is authorised and regulated by the Solicitors Regulation Authority.This publication is printed on paper from a sustainable source.
Kingsley Napleyis an internationally recognised law firm based in central London. Our wide range of expertise means that we can provide support for our clients in all areas of their business and private life. Many of our lawyers are leaders in their field and our practice areas are highly ranked by the legal directories. We are known for combining creative solutions with pragmatism and a friendly, sensitive approach. The relationship between lawyer and client is key. We work hard to match clients with lawyers who have the right mix of skills, experience and approach in order to achieve the best possible outcome.
For up to the minute insight
on family law issues go to our
blog at
www.kingsleynapley.co.uk/
blog/category/family
JANE KEIR
Partner and Head of Family
nE [email protected] nT +44 (0)20 7814 1273 CHARLOTTE BRADLEY Partner nE [email protected] nT +44 (0)20 7814 1279 WILLIAM HEALING Partner nE [email protected] nT +44 (0)20 7369 3827 MICHAEL ROWLANDS Partner nE [email protected] nT +44 (0)20 7814 1210 MIRANDA BAKER Consultant nE [email protected] nT +44 (0)20 7814 1216 LUCY THOMAS Senior Associate nE [email protected] nT +44 (0)20 7814 1221 EMILY MOORE Associate nE [email protected] nT +44 (0)20 7369 3773 CONNIE ATKINSON Solicitor nE [email protected] nT +44 (0)20 7369 3792 CHRIS MCINTOSH Solicitor nE [email protected] nT +44 (0)20 7814 1287 DUNCAN RANTON Solicitor nE [email protected] nT +44 (0)20 7814 1241 EMILY WATSON Solicitor nE [email protected] nT +44 (0)20 7814 1248 CLAIRE WOOD Solicitor nE [email protected] nT +44 (0)20 7369 3796
