As a result of the recent decision in RC v JC, a wife who sacrificed her legal career to raise a family has been awarded £400,000 in compensation.
The couple, who are in their 40s and have two children, divorced after approximately ten years.
The assets at the time of the divorce totalled approximately £10m. Mr Justice Moore awarded the wife an equal share of the marital assets plus a further £400,000 in recognition of the fact she had given up a lucrative career to care for the children. Mr Justice Moore described the wife as having suffered a “relationship generated disadvantage.”
The concept of providing ‘compensation’ for “relationship generated disadvantage” is rarely pursued or supported by the family courts. Compensation relates to an additional payment over and above an equal division of assets even when, without the payment, the spouse’s needs would be generously met.
Whilst there is some concern that this decision may open the floodgates to spouses seeking compensation in similar situations Mr Justice Moore stressed that his judgment should not be treated as a ‘green light’ for other spouses to make similar claims saying, “I have already made the point that, in many of these cases, the assets will be such that any loss is already covered by the applicant’s sharing claim. In other cases, the assets/income will be insufficient to justify such a claim in the first place. It follows that litigants should think long and hard before launching a claim for relationship-generated disadvantage.”
It is clear that the decision in this case was exceptional. Mr Justice Moore was able to make a confident finding that there was no doubt that the wife would have had a lucrative legal career had it not been for the joint decision that she would adopt the role of primary carer for the children and that it was possible to quantify this loss with reasonable accuracy.
Whilst the decision in this case has provoked a great deal of interest it is more likely to be the case that, in other divorce settlements, the principles of sharing and ensuring reasonable needs are met will nearly always subsume compensation.
In remains the case that running an argument for compensation will require careful thought and planning at an early stage in financial remedy proceedings.
If you would like to discuss any of the matters raised above, please contact Denise Findlay or a member of Birketts’ Family Team.
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The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at March 2020.