Factors a Judge Will Consider When Making a Decision For a Financial Order

In this article, we will explore the key considerations that judges take into account when deciding on a financial order in divorce.

The reason for the divorce or dissolution is not taken into account, which may come as a surprise to you. Many people assume that if a partner has been unfaithful or caused the marriage to break down they will be entitled to a bigger share of the financial settlement.

Before looking at the specific factors, we need to talk about financial disclosure. When applying to the court to make a financial order, both parties must lay out their financial position so that a Judge can decide what’s fair and reasonable.

Section 25 of the Matrimonial Causes Act 1973

The court’s starting point for making a financial order is Section 25 of the Matrimonial Causes Act 1973.

This section outlines a checklist of factors that a judge must consider when determining a fair division of assets.

Although the weight given to each factor may vary depending on the circumstances, these considerations provide a framework for decision-making.

The first consideration will be the welfare of any minor children of the family before reviewing the current and future needs, obligations, and responsibilities of both parties.

Ultimately, in any divorce settlement, the court will want to ensure that housing and income needs are met.

Here are the main factors a Judge will consider when assessing your financial order:

1. Income and Earning Capacity

One crucial aspect that the court examines is the income and earning capacity of each party involved.

This includes both their present financial situation and their future potential to earn. For instance, if one spouse has made career sacrifices to support the family, the court recognises the impact this may have on their future earning potential.

The age of any child also plays a role in assessing future earning capacity.

If there are young children involved, the primary caregiver may have limited opportunities to pursue a career, and this is taken into account when determining financial orders.

2. Financial Needs, Obligations and Responsibilities

The court carefully considers the financial needs and responsibilities of both parties. This includes housing needs and day-to-day expenses.

It is important to note that the court evaluates these needs within the context of the available resources of the marriage, ensuring a realistic and fair assessment.

In cases involving high-net-worth couples, the court may consider the standard of living enjoyed during the marriage. English courts have been known to interpret “needs” more generously in such situations, taking into account the lifestyle to which the parties were accustomed.

3. Age and Length of the Marriage

The age of the parties and the duration of the marriage also influence the court’s decision. Older couples may have different considerations, such as pension arrangements and investments.

Moreover, the length of the marriage impacts the division of assets, with longer marriages often resulting in a more equal distribution.

In shorter marriages, the court may give greater weight to the individual contributions of each party before the marriage. However, the court also must assess whether a clean break order is appropriate, especially when no children are involved.

Does the Length of Marriage Affect a Divorce Settlement?

4. Mental or Physical Disabilities

If either party has a mental or physical disability, the court takes this into account when determining financial needs and earning capacity. Disabilities may affect a party’s ability to earn income, as well as their housing and expenditure requirements.

5. Contributions of the Parties

The court recognizes both financial and non-financial contributions made by each party. This includes contributions to the welfare of the family, such as looking after the home or caring for the children.

Sacrifices made by one party to support the other’s career or education are also considered.

In cases where there are significant non-matrimonial assets, such as property acquired before the marriage or through inheritance, the court may take these contributions into account.

However, it is crucial to note that the court’s primary focus is on meeting the parties’ needs rather than rewarding individual contributions.

6. Conduct of the Parties

Although conduct is rarely a decisive factor, the court may consider it in exceptional cases.

Extreme behavior that has a significant impact on the financial position of the parties can be taken into account.

For example, cases involving criminal activity or deliberate financial misconduct may influence the court’s decision.

It is essential to understand that conduct generally refers to severe actions that directly affect the financial aspects of the marriage. Adultery, for instance, is unlikely to have a significant impact on the division of assets.

7. Loss of Benefits

The court also considers any loss of benefits resulting from the divorce.

This may include the loss of pension rights or other financial entitlements that would have been available if the marriage had continued. Such losses are taken into account when determining a fair financial settlement.

Whilst no two financial settlements are the same, it can be good to review examples of typical divorce settlements for guidance on what your division of assets might look like.

Our team of divorce financial settlement solicitors can assist you during this complex process to help you achieve a fair financial settlement.

What to do next

In summary, when making a financial settlement order in a divorce, judges consider various factors outlined in Section 25 of the Matrimonial Causes Act 1973.

These factors include income and earning capacity, financial needs and responsibilities, the standard of living, age and length of the marriage, disabilities, contributions of the parties, conduct, and loss of benefits.

Each case is unique, and the weight given to each factor depends on the specific circumstances.

Seeking professional legal advice is crucial to understanding how these factors apply to your situation and working towards a fair resolution.