For richer and forever: the marital contract and spousal maintenance

Spousal maintenance is one of the most contentious issues between divorcing couples. How much; for how long; and what is it supposed to cover? It is, therefore, perhaps surprising that consideration of why the liability for spousal maintenance arises in the first place is rare. On the whole it is generally accepted, in principle, that on divorce the economically stronger will be obliged to support the economically weaker party.

Giving judgement following the final hearing of a wife’s application for ancillary relief in SS v NS [2014] EWHC 4183, Mr Justice Mostyn focussed on the question “why?”, in order to highlight both the social and, by extension, legal philosophy behind the principle itself.

He considered the question of social policy, noting how spousal maintenance has been dealt with since the advent of secular divorce in 1857. While the court is guided by legislative provisions, currently s.25 of the Matrimonial Causes Act 1973, the final decision in respect of appropriate maintenance provision is left to “the unfettered discretion of the individual judge” (para 40). This is in stark contrast to, for example, Scotland, Sweden and New Zealand where legislation provides that, save in highly exceptional circumstances, the obligation to maintain is limited to a short period. In Scotland it is 3 years. In Sweden it is referred to as a “transitional period” and the starting point in law is that divorce terminates all economic ties and that each spouse should be responsible for his or her own support. In England and Wales such restrictions have met strong criticism and judicial discretion continues to be favoured.

Why?

Summarising a number of judicial perspectives, Mr Justice Mostyn explained that the rationale for imposing the obligation of spousal maintenance is to meet hard needs which the matrimonial relationship has generated. Most often, those needs arise as a result of career breaks taken in order to focus on bringing up a family and the economic effect on the relevant party’s independent financial stability and employment prospects. These are needs directly generated as a result of choices made within the marriage.

The assessment of needs “cannot be pressed into a formula which provides an answer, and it is right that that should be so, [for the assessment is] … elastic, fact-specific and highly discretionary” (para 40).

The future

This is not to say that English courts are not mindful of the need to enable economic independence following divorce, and indeed Mr Justice Mostyn notes that in the transition period a degree of (not undue) hardship is acceptable.

In February 2014 the Law Commission set out its policy on “needs” in the Matrimonial Property, Needs and Agreements Report and the Family Justice Council has now been asked to prepare guidance for publication in early 2015. In the meantime Mr Justice Mostyn lists the following as the relevant principles (para 46) for consideration in an application for spousal maintenance:-

  1. A spousal maintenance award is appropriate where evidence shows that choices made during the marriage have generated hard future needs.
  2. An award should only be made by reference to needs, with sharing and compensation principles to apply in most exceptional cases.
  3. Where the needs in question are not causally connected to the marriage the award should be aimed at alleviating significant hardship.
  4. In every case the court must consider a termination of maintenance with a transition to independence as soon as it is just and reasonable.
  5. Where the two are finely balanced, the court should favour an extendable term over a joint lives order.
  6. The marital standard of living is relevant to the quantum of spousal maintenance but is not decisive. That standard should be carefully weighed against the desired objective of eventual independence.
  7. In considering the claimant’s total income budget the judge should ask if it represents a fair proportion of the respondent’s available income.
  8. In relevant circumstances, needs of strict necessity should be met from the respondent’s base salary with additional, discretionary, items being met from any bonuses on a capped percentage basis.
  9. On an application to extend a term order for spousal maintenance the judge should consider whether the transition to independence anticipated in the original order had been impossible to achieve.
  10. On an application to discharge a joint lives order the judge should consider the original order’s assumption that it was too difficult to predict eventual independence.
  11. Where the two are finely balanced, in a choice between an extendable and a non-extendable term the court is likely to favour the economically weaker party.

The breadth of these principles must partially explain the increasing popularity of pre and post nuptial agreements entered into by parties seeking to separate their financial affairs by consent at a time when divorce is not being actively contemplated. Certainty, or as close to certainty as the law permits, is very valuable in an area which is so fraught with unknowns.

This guide is for general information and interest only and should be relied upon as providing specific legal advice. If you require any further information about the issues raised in this article please contact the author or call 0207 404 0606 and ask to speak to your usual Goodman Derrick contact.