Richard Kershaw discusses the treatment of future earnings in Family Law LexisNexis

Richard’s article was published in Family Law LexisNexis, 26 February 2020, and can be seen here.

Richard Kershaw, Partner in our Family & Relationships department, explores the evolving judicial debate around whether a financially weaker spouse should be required to use their capital award to meet income needs after divorce.

This issue, central to the principle of non-discrimination between breadwinner and homemaker established in White v White, has seen diverging judicial approaches.

Earlier cases like Lambert v Lambert [2002] and Vaughan v Vaughan [2010] supported a flexible stance, allowing the financially weaker party to preserve capital in light of the stronger party’s ongoing income. In Waggott v Waggot [2018], the Court of Appeal reaffirmed this flexibility, balancing the clean break principle with fairness, and allowing limited amortisation of capital depending on the circumstances.

However, the 2019 decision in CB v KB [2019] marked a significant departure. Mr Justice Mostyn asserted that it is always reasonable for a spouse to spend their capital to meet income needs, regardless of the other party’s surplus income.

This rigid approach contrasts with the nuanced reasoning in Waggott and O’Dwyer v O’Dwyer [2019] and raises concerns about reintroducing the very discrimination White sought to eliminate. If one party must deplete their capital while the other retains theirs and continues to earn, the financial imbalance persists.

Richard concludes that the courts should return to a more balanced, case-specific approach that respects both the clean break principle and the contributions of the financially weaker spouse.

Read the full article on the Family Law LexisNexis website [external link].