John Hooper & Co

Solicitors

Newsletter 2 – The extent of the Court’s powers to make Financial Orders against a spouse in divorce proceedings.

Financial Provision

Hot on the heels of the cases of Miller and McFarlane is the tabloid’s favourite, Charman v Charman which created excitement in the national press because Mrs Charman received a settlement of £48,000,000, the highest ever awarded in an English Court. Mr Charman made it very clear that he was not pleased with the outcome and has indicated that he intends to appeal.

Mr and Mrs Charman were both 53. They married in 1976 and separated in 2003. After several earlier Court hearings which were designed to prise out of Mr Charman the full extent of his assets, some of which were in a Trust in Bermuda, the matrimonial “pot” was assessed at about £131,000,000 (excluding a trust for the children which was kept separate).

The following significant points arose:

1. The Judge included in the husband’s assets, a Trust Fund in Bermuda, which the husband had claimed had been in the family for years. The Court was nonetheless satisfied that there was no evidence to substantiate the husband’s assertion.
2. Although the wife did not claim ongoing maintenance, the Judge said that the fact that she would otherwise have been entitled to it was a factor that had to be taken into account- in spite of the enormous capital award that she also received from the court.
3. Significantly, the Court accepted Mr Charman’s argument that his contribution to the wealth of the marriage had been exceptional- “a stellar contribution”- and this affected the eventual percentage division. Mrs Charman actually received 37% of the matrimonial kitty instead of the 50% that she was seeking. The Judge decided that if a husband made a “stellar contribution”, the corresponding reduction in the percentage of the assets receivable by the wife should be significant.
4. Finally and perhaps most importantly, the Judge raised as a side issue whether it might be more appropriate to have some sort of tariff system which would be applied to cases where there were substantial assets. This would replace the wide discretion (and therefore large area of uncertainty) which resulted from the current law.

The Judge in this case, Paul Coleridge, is one of several younger members of the Judiciary, who are gradually endeavouring to steer the law nearer to the 21st century. How many gradual steps they have to take, remains to be seen.

CHILD SUPPORT

After the eventual and inevitable acceptance by the Government that the CSA was just not working, a report by Sir David Henshaw has produced encouraging recommendations which the Government has supported:

1. To create a system which will allow parents to make their own arrangements for financial provision for their children.
2. To remove the obligation on benefit clients to apply for child support.
3. To disregard child support up to a high level when calculating Income Support and to disregard it entirely when calculating Housing Benefit and Council Tax Benefit.
4. To separate the enforcement aspect of the CSA from the rest of its remit.

If these recommendations become law, we may yet move much nearer to the sort of system which has been supported by many lawyers and legal commentators. i.e. One which is likely to produce a more manageable and appropriate child support system.

September 2006

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