Written by Colette Watt

A discussion about “financial needs” in the financial provisions upon breakdown of marriage and civil partnership in light of the 2014 Law Commission Consultation Paper: MATRIMONIAL PROPERTY, NEEDS AND AGREEMENTS (No.343)

Cuts to legal aid, particularly following the enactment of Legal Aid, Sentencing and Punishment of Offenders Act 2012(LAPSO 2012), have led to a significant increase in litigants representing themselves in the family courts1. One would hope that, now more than ever, the law would be clear, easily accessible and understandable in order for litigants to properly represent themselves in court and to guide those acting outside of the court process. This is what a formal conception of the rule of law requires. However, when it comes to the law on the financial provisions upon divorce, this is far from the case.

The statutory provisions regulating the court’s powers to control the distribution of property following marital breakdown can be found in the Matrimonial Cause Act 1973 (MCA 1973). The court can make orders regarding periodical payments and lump sums2, property3 and pensions4. The legislation contains guidance as to the factors to be taken into consideration when deciding how to separate these assets5. However, it does not explain why or how these factors should be applied nor does the statute have a clear objective6.

The case law has made it clear that there is an overarching principle of fairness. In White v White [2001] Lord Nicholls said: 

“Everyone would accept that the outcome on these matters, whether by agreement or court order, should be fair. More realistically, the outcome ought to be as fair as is possible in all the circumstances.”7

However, he quickly qualifies this by saying “different minds can reach different conclusions on what fairness requires…  fairness, like beauty, lies in the eye of the beholder”8. He elaborated in Miller; McFarlane9that fairness contained “several elements, or strands”10. These are financial needs11, compensation12 and sharing13

Financial needs is perhaps the most important of these strands. From a legal perspective, Lord Nicholls explained that it “reflects the fact that to a greater or lesser extent every relationship of marriage gives rise to a relationship of interdependence”14.In practical terms, Hitching has made it clear that in ‘everyday cases’ the parties resources do not exceed their needs and so financial needs is the only real consideration15.

What is needs?

Financial needs is referred to as a factor for the court to have “particular regard to” when exercising its powers (MCA 1973 s25(2)(b)) but in their 2014 Consultation Paper, the Law Commission makes it clear that: “there is no definition of ‘needs’ in English law’. Further confusion has been added to this by the differing treatment in practice of ‘everyday cases’ and so-called “big money” cases. In everyday cases it is unlikely that the  available resources  will even allow the parties to maintain the same marital standard of living. However, in big money cases the needs requirement tends to be assessed by the standard of marital living16, if not the same standard of living then living “comfortably in their own homes”17. But this distinction has been criticised as a “judicial gloss” which should be avoided, and it has been recommended that lawyers should stick to the “the precise language of the statute”18. Charles J in Robson v Robson [2010] rejected the notion put forward by Baroness Hale that needs should always be “generously interpreted”19. It is evident that there is judicial uncertainty about what needs really is, how to achieve it and the standards by which to judge it. 

What ‘needs’ fixing? 

Some would argue that the uncertainty regarding the need to meet ‘needs’ really matters. This is because, as mentioned above, the majority of cases will be focused on finding a “practicable” solution with no room to discuss the threshold for meeting needs. It seems that the majority of practitioners have trust and confidence in the judicial discretion regarding property division upon divorce20. However, the matter is still highly discretionary. Discretion can be abused. Furthermore, if couples are not reaching the courts at all then they cannot take advantage of this judicial expertise and are left to resolve the matter alone. 

The Law Commission Consultation Paper flags up two problems with the law relating to financial needs: geographical inconsistency and the lack of transparency. 57% of practitioners who responded to a Resolution survey21 indicated that they issued proceedings in a particular location because they believed it would bring them a more favourable outcome. The Law Commission regard this strategic use of regional inconsistency to be problematic. More interesting and more troubling is the lack of transparency. Most people cannot afford legal advice and are no longer entitled to legal aid, so many, like Holt, are concerned that the court cannot cope with “DIY advocacy”22.

Law Commission’s Proposals

The Law Commission adopts a policy that they seek to implement in order to “solve the lack of transparency in the law relating to needs and inconsistency in the application of the law”23. However, they emphasise that their policy is more like clarification, or a statement of best practice. They aim to ensure the independence of both parties after marital breakdown, in a way that reflects the “merger over time” of their married lives23. The Law Commission Paper consulted on the three different solutions to this lack of transparency: statutory amendment, non-statutory guidance and the use of formulae.

Statutory Amendment 

The Law Commission suggested that the problems with transparency in financial needs could be resolved, or improved, if the MCA 1973 set out an objective to be met by provision for needs.However, this was widely rejected by consultees. Dr Therese Callus expressed concern about introducing “nebulous concepts” into the legislation or “piecemeal” reform25. The Law Commission also noted that it would take a long time to produce this legislative change26.

Non-Statutory Guidance 

The Law Commission found that their suggestion of non-statutory guidance to further their policy would be more “fruitful”. Consultees preferred the idea that the Family Justice Council would have a role in developing and implementing this guidance. The Family Law Bar Association believed that the effect of the guidance would be to “recalibrate the Court’s compass in such a way that it pointed towards an increased recognition that Miller; McFarlane is to give each party an equal start on the road to independent living”27. The Law Commission foresaw this guidance then being “translated” to be understood by lay-people28. Unfortunately, there was no agreement between consultees about the way in which the guidance ought to developed29.

Formulae 

Other jurisdictions such as the USA and Canada use formulae to calculate spousal support upon divorce. The American formula adjusts the differential in income that the parties are going to experience following divorce, to an extent and for a period that are both proportionate to the length of the marriage and to the period spent looking after children30. The Canadian formula generates a band in which to negotiate a final figure and unlike the American scheme is non-statutory31. There are two main reasons why the formula approach is unlikely to be accepted in UK law. The first being the chaotic experience with the original implementation of the Child Support Act 1991. This worry is echoed by the Judges of the Family Division32. The second issue is that there is usually a property regime in place. This is not the case and so any formulaic approach to spousal support in the UK would have to calculate both the level and form of support33. The Association of Her Majesty’s District Judges is worried that that this would lead to “satellite litigation”34.

However there does seems to be some support for a formulaic solution which is not purely formulaic35. Miles is in favour of a formulaic approach in so far as it is within “the (potentially wide) tramlines of advisory guidelines” and not the stricter sounding formulaic ‘calculation’”36. Barlow and Callus also express support for a flexible formulaic approach37. Nonetheless, the Law Commission declined to accept a formulaic approach as there is a need for further data and analysis38.

Does needs need fixing?

It is important to remember that this is a highly controversial area and there is no agreement from consultees on the need for change at all. Many academics and practitioners trust and respect the flexible approach of English law with its heavy focus on judicial discretion. However the Law Commission thinks that the lack of overriding rationale found within the MCA 1973 generates confusion and give insufficient assistance to litigants in person and to those who are not able to access the courts at all39. People with no legal background or training must be able to understand the law  Otherwise couples looking to self-represent or go through the divorce process without accessing the courts at all may deny themselves of their legal rights by striking the division of property in an inappropriate manner. This can have a serious impact on their finances in the future and the standard of living for their children. These problems are exacerbated by regional inconsistencies of outcomes. The law relating to financial needs is “inherently unclear” and impossible to discern from the statute40. If this confusion is not cleared then some would say that English law on the division of property after divorce respects neither families nor the rule of law.   


  1. https://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN07113#fullreport 
  2. MCA 1973 s23
  3. MCA 1973 s24 and s24A
  4. MCA 1973 s24B-G and s21A
  5. MCA 1973 s25
  6. The MCA 1973 was amended by the Matrimonial and Family Proceedings Act 1984 to remove “minimal loss” as the statutory objective. 
  7. White v White [2001] 1 AC 596 [599]
  8. Ibid.
  9. Miller v Miller; McFarlane v McFarlane [2006] UKHL 24
  10. Ibid. [10]
  11. Ibid. 
  12. Ibid [13]
  13. Ibid [16]
  14. Ibid [11]
  15. See also Jones v Jones [2011] per Wall P [69]
  16. The Law Commission (LAW COM No 343) MATRIMONIAL PROPERTY, NEEDS AND AGREEMENTS  2.35
  17. Lawrence v Gallagher [2012] EWCA Civ 394 [42]
  18. Robson v Robson [2010] EWCA Civ 1171 [43]
  19. Miller v Miller; McFarlane v McFarlane [2006] [144]
  20. The Law Commission (LAW COM No 343) MATRIMONIAL PROPERTY, NEEDS AND AGREEMENTS 2.53
  21. Ministry of Justice, Court Statistics (quarterly) Main Tables (2013) tables 2.1 and 2.6, available at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/264142/csqq2-2013-main-tables.xls (last visited 7 February 2014) 
  22. K Holt “Territory skirmishes with DIY advocacy: a Dickensian misadventure” (2013) 43 (Sep) Family Law 1150
  23. The Law Commission (LAW COM No 343) MATRIMONIAL PROPERTY, NEEDS AND AGREEMENTS 3.60
  24. Ibid, 3.73
  25. Ibid. 3.60 
  26. Ibid. 3.74
  27. Ibid. 3.76
  28. Ibid. 3.77
  29. Ibid. 3.80
  30. Ibid. 3.122
  31. Ibid. 3.124
  32. Ibid. 3.136
  33. Ibid. 3.131
  34. Ibid. 3.137
  35. Ibid. 3.140/3.141
  36. Ibid. 3.145
  37. Ibid. 3.146/3.147
  38. Ibid. 3.155/3.156
  39. Ibid. 3.62
  40. Ibid. 2.56