Why recent divorce dispute ruling could prove to be momentous in years to come: Sarah Hewitt
Legal reform can take years to achieve, even for those measures attracting popular support. For all the pressure to update the process by which divorcing spouses divide their assets, the relevant law - section 25 of the Matrimonial Causes Act 1973 - has now been in place for more than half a century.
Some - but only relatively few - have produced the kind of shift which dictates how many marriages end years later.
We have just passed the 25th anniversary of one such judgement.
The House of Lords’ ruling in the case of a farming couple from Somerset, Pamela and Martin White, established two essential principles in deliberations about financial remedy on divorce.
Firstly, it introduced the so-called ‘sharing principle’ - the idea that a 50-50 split of assets should be the norm without good reason. In addition, there would no longer be a bias in terms of division between a family’s breadwinner and a home-maker.
The White v White decision was nothing short of momentous. A quarter of a century later, some are wondering if 2025 delivered an outcome which might come to be similarly regarded in the years to come.
In the dispute between the retired banker, Clive Standish, and his former wife, Anna, the central issue was not necessarily how assets should be divided but which assets should be considered as subject to the sharing principle.
Referred to as matrimonialisation, it requires analysis of whether assets acquired before a marriage or inherited during it by one spouse (ie, non-matrimonial property) can be regarded as available for sharing if they have become intermingled with both parties’ finances and utilised by both spouses.
Although the Supreme Court’s judgement in the Standish case made clear that non-matrimonial assets should not be shared, it acknowledged that they could still be used if required to be meet a spouse’s needs or by way of compensation - the latter of which is extremely rare and very difficult to prove.
The ruling did not, however, include a simple formula for determining whether property is non-matrimonial or not and whether such assets have been matrimonialised during the course of a marriage.
As a result, there remains the potential for debate, something increasingly appreciated by entrepreneurs across England and Wales.
They understand that whereas business assets built up before a marriage are generally considered beyond the reach of sharing, there is a risk that they could still come within the scope of such calculations if the benefits which they create are enjoyed by a couple during their time together.
The lack of clarity is compounded by the discretion afforded to judges to interpret the prevailing law according to the facts of each case presented to them.
In response, more individuals are taking matters into their own hands, drawing up pre-nuptial agreements which provide the basis of discussions about how assets should be treated should their marriages not last the distance.
Fifteen years on from another milestone Supreme Court ruling in favour of German heiress Katrin Radmacher - and in another indication of how long even popular reforms can take – nuptial agreements are still not legally binding.
However, if drawn up properly and fairly, they have decisive weight in determining the nature of a divorce settlement. That can be of immense reassurance to men and women wishing to protect their businesses from the uncertainty of marital collapse.
Sarah Hewitt is a senior associate at Hall Brown