DIVORCE, FAIRNESS AND DISCRETION 

Published on 02 May, 2025 | Priya Palanivel

For those who do not work in matrimonial law, it can sometimes seem a little difficult to comprehend.

How media reports those matters which it considers newsworthy sometimes doesn’t exactly make things any easier either.

Yet when it comes to family law, the simple, central premise is one of fairness.

Whether cases involve the well-being of children or the division of a separating couple’s assets, the objective of lawyers and courts alike is achieving the fairest possible outcome using the principles of needs and sharing.

What constitutes fairness in divorce, however, is not something which is necessarily set in stone and shifts according to how judges interpret the facts of individual cases presented to them.

This week, the highest court in England and Wales, the Supreme Court, has been hearing a case likely to provide valuable clarification on the treatment of pre-marital assets transferred from one spouse to another during the course of a marriage.

At the heart of the matter is a regular theme in financial remedy proceedings; namely, whether assets are classed as matrimonial or non-matrimonial, have been mingled or ‘matrimonialised’ – and, therefore, are suitable for division between spouses or not in accordance with the sharing principle.

A panel of five Supreme Court justices will weigh up the latest stage of a dispute between the retired banker Clive Standish and his ex-wife, Anna.

Three years ago, the High Court decided that she should receive £45 million from their combined wealth of £132 million.

In May last year, though, the Court of Appeal concluded that ruling had been “flawed” and reduced that award to £25 million (https://www.bailii.org/ew/cases/EWCA/Civ/2024/567.html).

Central to the revision was the treatment of £77 million which Mr Standish had transferred to his wife as part of his estate planning three years before their marriage ended.

Mrs Standish had argued that the sum should be considered hers as it was in her name and, therefore, could not be counted as non-matrimonial.

In delivering the Court of Appeal’s unanimous judgement, Mr Justice Moylan explained that the “source of an asset is the critical factor and not title”.

Putting the monies into Mrs Standish’s sole name, he continued, “did not transform them into matrimonial property”.

Mrs Standish has now appealed that decision in the Supreme Court.

Whilst assets of the size involved in this case are not necessarily the norm, the Supreme Court’s ruling may well redefine how courts in the future treat pre-marital wealth and how couples make gifts to each other during their marriage by virtue of estate planning.

This, in itself, may well have far-reaching consequences, particularly in how family lawyers like myself advise clients from the outset.

Since a landmark ruling in 2000 (https://publications.parliament.uk/pa/ld199900/ldjudgmt/jd001026/white-1.htm), the starting point for a financial settlement has been an equal division of assets unless there is a good reason to depart from that.

Every day, myself and my colleagues at Hall Brown Family Law see clients who maintain that their assets were either accrued before their marriage, received from a third party (for instance, by way of inheritance) or built up following their separation and should be ringfenced – put beyond the reach of any divorce settlement.

Yet family courts have a lot of discretion when it comes to ruling on appropriate financial settlements.

That elastic nature means that there is no hard and fast formula. In addition, despite previous case law on how assets should be shared, that can be over-ridden on the basis of a spouse’s needs.

Some insist that the lack of certainty is inherently unfair.

Last December, the Law Commission produced a report on whether the laws governing the financial aspects of divorce – which have now been in place for more than half a century – should be reformed (https://lawcom.gov.uk/news/law-commission-publishes-scoping-report-on-financial-remedies-on-divorce/).

It found that “the law does not provide a cohesive framework in which parties to a divorce or dissolution can expect fair and sufficiently certain outcomes”.

The Government has until the end of this year to respond in full to the Commission’s report and suggestions as to how any change might look.

Furthermore, it may take some months before we know the result of the Supreme Court’s deliberations.

Whatever it decides in the Standish case, the very fact that the Supreme Court is considering the arguments which it involves makes it even more important for family lawyers to advise clients who have pre-marital considerations to think carefully about their estate planning as a whole, as well as the importance and suitability of having a nuptial agreement.

In the meantime, more couples will sadly separate and find themselves trying to reach a fair division of their assets.

That continuing uncertainty means that it is arguably more important for people to take legal advice about how they structure assets and family finances, whether that is before, during or even after tying the knot.