Sharing Principle in a Divorce – Divorce Solicitors

When it comes to finances in divorce, the Court must consider several principles. Particularly, the needs principle and the sharing principle. Most people have heard about the sharing principle in a divorce. But what does it mean? 

What is the ‘Sharing Principle’ in a divorce?

The sharing principle is the starting point for all cases. Namely, that the assets of the marriage should be shared equally. That is unless there is a good reason not to.

This comes from the concept of equality. Spouses are equal parties to the marriage. Therefore, they should share the “fruits of the matrimonial partnership” equally. In practical terms, this means the starting point for financial division is 50:50.

If there is no reason to depart from this, the Court will share the assets equally.

What is a good reason to depart from the Sharing Principle?

The Court will depart from a 50:50 financial settlement for a number of reasons. In particular:

1. In a ‘Needs-based’ case. A needs-based case is where the available assets do not exceed the parties’ needs. Here, the ‘needs principle‘ is instead applied. As a result, the Court determine the financial settlement based strictly on needs. The Court prioritise the needs of the parties and minor children over everything. This can result in an unequal division of the assets.
2. In short childless marriages. The Court may depart from the sharing principle in short and childless marriages.

Generally, the Court otherwise applies the sharing principle to all matrimonial assets.

Does the Sharing Principle mean an equal division?

Not necessarily. The sharing principle specifically applies to matrimonial assets. Consequently, where there are assets over and above those needed to meet the party’s needs, the Court considers the source of the assets. In addition, the Court considers the need for compensation.

Non-Matrimonial Assets.

Thus, the Court considers whether any asset is non-matrimonial. Loosely speaking, that is they were acquired before (or after) the marriage or were received as a gift or inheritance. This is not always straightforward. For example, inheritance monies are used to purchase a jointly owned property. 

As a result, the Court carefully analyse the assets. If an asset is non-matrimonial, the Court considers whether it should be reflected in the financial settlement. Where appropriate, the Court may ringfence a non-matrimonial asset. This means the Court exclude it from the financial settlement. Consequently, the non-matrimonial asset is disregarded. The sharing principle then applies to the remaining assets. Overall, this results in an unequal division.

Compensation.

Additionally, the Court considers the need to compensate a party. This refers to compensation for a relationship generated disadvantage. It applies in exceptional cases. 

If you believe compensation should be reflected in your divorce. You should discuss your circumstances with a Specialist Solicitor.

Contributions.

When clients ask me about compensation, what they tend to mean is contribution.

So, are contributions relevant? They can be. Whenever the Court makes a financial Order, it must have regard to the section 25 factors. Consequently, the Court must consider contributions made to the welfare of the family. However, it is rare for the Court to depart from the sharing principle based on contribution.

The Court only reflect unmatched “stellar contributions”. To put this into context, case law has tested this argument. The Court refused to reflect contributions made by a millionaire worth £50million. Likewise, the Court refused to reflect contributions made by a solicitor who built up a successful London law firm. Clearly, there is an extremely high hurdle.

How about contributions as the sole breadwinner?

This is no different. In fact, the Court considers contributions made by a homemaker or child raiser equally to those of a breadwinner. As a result, the Court are unlikely to reflect this contribution in a financial settlement.

This does not mean that contributions cannot be reflected in a financial settlement. However, contributions are generally only reflected by agreement. 

Get in touch to find out how the sharing principle will affect your divorce.

Want to know what your financial settlement may look like? Or whether the sharing principle applies? Please contact Gemma Keats on 07874349555 or by email to see how best she can support you.