How mediation can clear the muddy waters of divorce

 

A recent Court of Appeal ruling has thrown doubt on the previously held ‘sharing principle’ that means the starting point for the division of assets in any divorce proceeding is 50/50.

In the appeal, brought by Julie Therese Sharp against her former husband Robin Duncan Sharp, an earlier financial award of £2.725 million made to Mr Sharp was revised downwards to £2 million, a loss of some £725,000.

The factors cited by the former Mrs Sharp included that the marriage was childless; that it was relatively short, at around four years; and that the couple had maintained separate finances throughout.

Examples of this include that although both were on similar salaries of around £100,000 at the start of their marriage, Mrs Sharp received over £10 million in bonuses due to a surge in the value of the energy industry over the four years.

These bonuses were not shared between the two during their marriage, but Mrs Sharp bought three cars as gifts for her husband, and household bills and restaurant bills were shared rather than being paid together as a single entity.

On appeal, Lord Justices McFarlane, McCombe and David Richards cited the shortness of the marriage and the fact that both parties had careers as reasons to depart from the equal sharing principle.

They stated that “short, childless marriages, where both spouses have largely been in full-time employment and where only some of their finances have been pooled” may warrant “a reduction from a full 50% share or the exclusion of some property from the 50% calculation”.

In the end, they allocated Mr Sharp £1.3 million – an equal share of the properties held in joint names by both parties – and £700,000 to ensure he could maintain his standard of living and cover the cost of retaining the property in which he intended to live after the divorce.

The outcome has been criticised by Baroness Ruth Deech, who has previously called for divorce judges to stop favouring female parties due to outdated notions of chivalry.

Following the verdict, she tweeted: “Would the decision have been the same if the husband had been the one with bonuses? I bet not! … Law now clear as mud.”

She added that ONS figures published in mid-July, which show nearly 10% of over-16s are cohabiting without being in a marriage or civil partnership, may be a sign that they are doing so “in order to avoid the lawyers”.

Ultimately, the lawyers are the only winners in acrimonious divorce cases, and legal costs – especially on appeal – can mount into the hundreds of thousands of pounds for both parties, ultimately eating away at any finances and assets to be shared.

Mediation is an alternative that always aims for a more amicable resolution achieved through mutually agreeable compromise, so that there is no outright winner or loser, and everyone gets a result that is closer to what they wanted.

You don’t have to wait until divorce to consult a mediator – although prenuptial agreements are not completely legally binding in England, they will generally be taken into account by the divorce courts.

As such, if you are planning to marry and want to protect your finances ahead of any possible future split, mediation can help you to do so without introducing any negative sentiment into your marriage before it has even begun.

In any case – from divorces as complex as Sharp v Sharp, to relatively amicable separations – mediation will always focus on achieving a positive outcome for both parties and any affected dependants, while keeping legal costs to a minimum so that you retain as much of your family finances as possible.

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