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   Divorce Law
  Divorce Law
  Introduction   Matrimonial Causes Act 1973
  Case law influence   Future legislative changes
  Ancillary relief rules   
    

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Introduction
The core legislation the court must have regard for during cases of divorce is the Matrimonial Causes Act 1973 (MCA 73). Over time this Act has been adapted in order to help the court achieve a clean break for the parties.

The interpretation of the Act has placed emphasis on the needs of the parties. So where the assets are substantial, the former spouse has been awarded benefits that are a fraction of the value of the assets.


Recent case law, such as the House of Lords ruling in the landmark case of White v White (2000), has made significant changes to the approach of the court when ruling on the division of assets on divorce in these circumstances.

During ancillary relief proceedings rules require three stages to resolve the matrimonial assets, being the first appointment, financial dispute resolution (FDR) and the final hearing. During this process the court can have regard to other rules to ensure the parties are on an equal footing when considering the financial matters as can be seen in the step-by-step guide and when expert evidence is required, the power to instruct the parties to appoint a single pensions expert.

Further changes to the way divorce can be initiated will be introduced by the Family Law Act 1996 (FLA 96), although the government has postponed the implementation of this Act for the time being.



Matrimonial Causes Act 1973
The matters that will typically concern the parties most during divorce will be the division of the matrimonial assets. The legislation that gives the court the power to resolve the matrimonial assets and financial matters, including the value of retirement benefits of any pension arrangements, if the Matrimonial Causes Act 1973 (MCA 73).

In particular section 25 of the Matrimonial Causes Act 1973 sets out the principles where it is the duty of the court to decide whether to exercise its powers and to have regard to achieving a clean break between the parties as well as to have regard to all circumstances of the case including the following matters:

   
The income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future including;
   
The financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
   
The standard of living enjoyed by the family before the breakdown of the marriage;
   
The age of each party to the marriage and the duration of the marriage;
   
Any physical or mental disability of either of the parties to the marriage;
   
The contributions made by each of the parties to the welfare of the family, including any contribution made by looking after the home or caring for the family;
   
The value to either of the parties to the marriage of any benefit (this can include pension arrangements) that (as a result of the divorce) the party will loose the chance of acquiring.

Where there are children of the marriage the court will want to ensure the parties maintain their obligation and responsibilities until the children cease to be dependent. This may mean making arrangements for children such as continued maintenance so it is not possible to achieve a clean break.

There have been amendments made to the MCA 73 to reflect the needs of the former spouse to secure retirement benefits on divorce. Section 166 of the Pensions Act 1995 introduced earmarking and inserted sections 25B to 25D of the MCA 73. The MCA 73 has been further amended by section 19 and 21 of the Welfare Reform and Pensions Act 1999 (WRPA) that introduced pension sharing as well as requiring an earmarking order to be expressed as a percentage.


Future legislative changes
The Family Law Act 1996 (FLA 96) when fully in force will modify the Matrimonial Causes Act 1973 and in particular the current procedure for divorce requires the couple to be married for more than one year and the only ground for divorce procedures is that the marriage has irretrievably broken down.

The FLA 96 would introduce no fault divorce, which means that no grounds will have to be shown as to why the marriage has irretrievably broken down. However, although the FLA 96 has been passed by parliament and will be brought into force with statutory instruments by the Lord Chancellor in stages, the government announced in December 2000 that the Act would. In part, be postponed probably for several years.


Case law influence
In addition to legislative changes from the Matrimonial Causes Act 1973, Pensions Act 1995 and Family Law Act 1996 and Welfare Reform and Pensions Act 1999 as well as recent cases that also influence the division of retirement benefits on divorce. With the application of earmarking orders the case of T v T (1998) showed that the usual emphasis of the court on the needs of the former spouse, this being only one of the considerations of section 25 of the MCA 73, was significant in the ruling.

The former spouse was entitled to a proportion of other matrimonial assets and maintenance but no compensation was made for the loss of pension rights to the former spouse and only an earmarking order was made on the husbands lump sum death benefit. However, it is significant that the court did consider the cash equivalent transfer value (CETV) to be of no use in determining a fair value of the retirement benefits.

Another earmarking case was Burrow v Burrow (1999) where the matrimonial assets were substantial. The former spouse received a large settlement from the sale of the family home and annual maintenance from her husband. Initially there was also an earmarking order of half the tax free lump sum and half the husbands pension income.

On appeal the earmarking order against the pension income was allowed as under the MCA 73 there is no legal requirement for an equal split of the matrimonial assets if this is not appropriate. A significant change came about with the landmark case of White v White (2000). The traditional approach of the court during the 1980s and 1990s emphasized the importance of needs and reasonable requirements of the spouse rather than an arithmetic division of the matrimonial assets.

The House of Lords ruled on the case and went further to clarify that there can no longer be gender discrimination when determining the allocation of ancillary relief and that the judge should start as a general guide with an equal division of the matrimonial assets and this will include any pension arrangements.


Ancillary relief rules
A number of rules will apply to ancillary relief proceedings. In particular new arrangements effective from 5 June 2000 means that these proceedings will have fewer delays for settlement, lower costs and greater control by the court of the conduct and proceedings and the step-by-step guide shows this process. The Family Proceedings (Amendment No.2) Rules 1999 inserts rule 2.61E of the Family Proceedings Rules 1991 that introduces a three stage process involving the first appointment, financial dispute resolution (FDR) and the final hearing.

During any stage of this process the court will expect the parties to make offers to settle all or part of the matrimonial assets and for the recipient to give full consideration. If the couple cannot come to an agreement the court has the power to make a ruling after careful consideration of the facts of the case in the final hearing.

Also important for the division of a members pension rights is rule 2.51B of the Family Proceedings Rules 1991 that applies to expert evidence and states that the overriding objective of the court must be to ensure that the parties are on an equal footing and deal with the case in ways which are proportionate to the amount of money involved, to the complexity of the issues and to the financial position of each party.

In all cases the court will need to be satisfied that the extra costs associated with expert evidence are justified whether this results in earmarking or pension sharing of the retirement benefits or offsetting against other matrimonial assets,

Whether expert evidence is accepted during ancillary relief proceedings will depend on the courts regard for rule 2.61C of the Family Proceeding Rules 1991. This states that expert evidence will not be allowed (whether written or oral) unless permission has been given by the court and the court will only give permission if expert evidence is reasonable required and justified and in accordance with the overriding objective of rule 2.51B of the Proceeding Rules 1991. Where the appointment of a pensions expert is necessary but the parties cannot agree on a single expert, the court has, under part 35 of the Civil Procedures Rules 1998, the power to instruct that evidence be given by a single pensions expert.

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