Reduced Earning Capacity in Marriage Warrants Compensation

A recent case, in which a man’s ex-wife sought an increase in the financial provision originally made for her following their 1988 divorce, has raised an interesting issue regarding the calculation of the division of the financial spoils on the break-up of a marriage.

Although there were a number of issues raised, there were two points of primary interest. The first was that in the original settlement, even though the couple had been married for 24 years, the woman was awarded only 26 per cent of the capital of the marriage. She was, however, awarded 35 per cent of her husband’s income at that time.

Subsequent to their divorce, the woman’s ex-husband was able to increase greatly the value of his assets, becoming a multimillionaire. She had found a job after their divorce, but her argument that she should have an increase in her financial settlement was based not only on her increased financial need (by the time the case was brought, her only income was a pension of approximately £15,000 per year), but on the basis that she should be compensated for her reduced earning capacity during the marriage because she had not worked whilst bringing up their children.

The court accepted this line of reasoning and awarded her a six-figure settlement.

Partner Note

Lauder v Lauder [2007] EWHC 1221.

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