Compensation in financial proceedings for ‘relationship-generated disadvantage’

In the recent judgement of RC v JC, Mr Justice Moor said that he found sufficient ‘relationship-generated disadvantage’ to justify awarding the wife compensation of £400,000.

The husband and wife met at a law firm where he worked as an associate solicitor and she as a trainee solicitor. After the couples’ engagement, she left the firm to become an in-house lawyer. The husband did not want her to remain at the same firm if they were to marry, and she agreed with this. Moor J said that he was satisfied that when she made this decision, she had made plans for her personal future in marrying her husband and having children with him.

She put her career before his, in order that she would be the primary carer for their children. Moor J made it clear in his judgement that the couple had disagreements about her career, however Moor J was of the view that should the wife have stayed at the law firm where they both worked, she had a ‘very good chance’ of becoming a partner.

Moor J stated in his judgement that this decision should not be seen as a ‘green light’ for other spouses to make similar claims, and that in the majority of cases, any loss suffered will already be covered by the applicant’s sharing claim. However, his decision is no doubt controversial and raises interesting questions about the dissolution of modern families, where both parties have potentially lucrative careers.
It could be questioned why the wife is being compensated for sacrificing her career (although it appears not entirely), whilst the husband sacrificed spending time with his children to provide for his family, with no compensation. This creates a scenario where you are balancing which sacrifice is greater.

The decision is also based on a presumption that as a trainee solicitor, she would have had a very successful career and achieved partnership level. It cannot truly be established whether or not this would have been the case.
Further, it raises questions as to the ‘yardstick of equality’ principle provided in White v White. Prior to White, the courts’ approach had been that on marriage breakdown, the entitlement of the financially weaker party was to have their reasonable needs met, and nothing more. However, White diverted from this approach stating that ‘the objective must be to achieve a fair outcome’. This meant that regardless of whether you were the main earner, or the main caregiver, your contribution to the marriage was viewed as equal.

It can be argued that the effect of this most recent judgement is to divert from the White principle and seemingly award double compensation to the party, whom sacrificed their career, as this should have already been covered in the fair distribution of the marital pot. It could go so far as to be offensive, by suggesting that the marriage, and the marital decision to put one spouses career before the others, has been ‘an injury’ for which compensation should be provided.

However, for some, this is a very welcome judgement which acknowledges the career sacrifice that many spouses make to be the main caregiver for their children. A sacrifice which some believe, should be compensated.

If you need advice regarding divorce and/or finance proceedings, please contact our Family team at familylaw@woodfines.co.uk.

Clare Wilkie

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