Source: http://webjcli.org/article/view/299/432
Timestamp: 2019-04-23 14:31:59+00:00

Document:
Citation: Russell P. & Costello A., "Family Law: Periodical payments beyond reasonable needs? Survey data", (2014) 20(2) Web JCLI.
This article focuses on the allocation of post-separation income, whether by an award to meet reasonable needs or a claim of entitlement to a share beyond needs. Income sharing provides periodical payments as a proportion or percentage of the payer's entire income regardless of source , rather than in relation to the recipient's needs. The level of periodical payments is fixed in percentage terms but not in amount. The fortunes of the payer and recipient are therefore tied together: as the payer earns more or less, the periodical payments increase or decrease proportionately.
The court's power to make provision for a series of payments from one spouse to another ('periodical payments') is set out at s.23(1)(a) of the Matrimonial Causes Act 1973: 'On granting a decree of divorce … or any time thereafter, the court may make … an order that either party to the marriage shall make to the other such periodical payments, for such term, as may be specified in the order'.
The freedom of extensive discretion has allowed the judiciary to create competing approaches from reasonable needs to sharing and compensation. Notwithstanding clear expressions of principle such as the avoidance of discrimination between husband and wife, each approach can be chosen to be applied to a case at the discretion of the court. The extent of the court's discretion has allowed uncertainty to flourish. It is difficult to discern a consistent application of approach between cases or between the capital and income aspects of each case.
Historically, the English judiciary have always sought to place a limit on the quantum of periodical payments. This is apparent by their initial adoption of an approach whereby a wife was only entitled to an amount of maintenance that she reasonably required to maintain her pre-marriage standard of living even if the husband could afford to pay significantly more ('reasonable needs approach').  This approach has been criticised within academic writings for operating gender-based discrimination in cases where means exceeded needs (as it restricted the wife to her reasonable needs whereas the husband was subject to no equivalent limitation); as Elizabeth Cooke wrote: 'the reasonable needs approach meant, in practice, that in wealthy cases women tended to walk away from divorce considerably less rich than men'.  It also resulted in the Duxbury paradox,  whereby a younger wife would receive a larger sum of capitalised periodical payments than an older wife, an award that would not reflect the latter's greater contribution to the marriage. Nevertheless, the reasonable needs approach remained accepted practice over a number of decades.
In 2000, the decision of the House of Lords in White v White  challenged the fairness of the reasonable needs approach, but only in respect of capital not income. It enabled the wife to receive 40% of the matrimonial capital. Although Lord Nicholls asserted that 'in seeking to achieve a fair outcome, there is no place for discrimination between husband and wife and their respective roles',  continuing later 'equality should be departed from only if, and to the extent that, there is good reason for doing so. The need to consider and articulate reasons for departing from equality would help the parties and the court to focus on the need to ensure the absence of discrimination'.  The judgement was silent as to income. As a consequence, the wife's award by way of a lump sum was on a clean break basis and she was expected to raise income from investing the capital whereas the husband was allowed to retain all of the income from the family farming business.
It was the subsequent case of Miller/McFarlane  that applied the notion of sharing to income but only for the purposes of meeting need or granting compensation to a spouse who has suffered ongoing disadvantage as a result of arrangements within the marriage. Of all the Law Lords, Baroness Hale was the most explicit about income sharing. She actually referred to the possibility of future income being shared as well as current assets and went on to explain: 'In general, it can be assumed that the marital partnership does not stay alive for the purpose of sharing future resources unless this is justified by need or compensation. The ultimate objective is to give each party an equal start on the road to independent living.'  Therefore, although expressed in the negative, she did allow for the option of income sharing beyond needs if justified by compensation. She also asserted: 'We do not yet have a system of community of property, whether full or deferred. Even modest legislative steps towards this have been strenuously resisted.'  This statement contradicted the argument that community of property principles would limit any sharing provision to capital.
In the case Mrs McFarlane was awarded ongoing periodical payments significantly in excess of her actual needs. (Her needs were quantified at £128,000 per year whereas the House of Lords affirmed the Court of Appeal's award of £250,000 per year.) Baroness Hale stated that: 'The wife is undoubtedly entitled to generous income provision for herself and for the sake of their children, including sums which will enable her to provide for her own old age and insure the husband's life. She is also entitled to a share in the very large surplus, on the principles both of sharing the fruits of the matrimonial partnership and of compensation for the comparable position which she might have been in had she not compromised her own career for the sake of them all.'  This paragraph is particularly interesting because Baroness Hale acknowledged a possible justification for income sharing beyond needs, in addition to that of compensation, namely sharing the fruits of the matrimonial partnership.
In contrast, Lord Nicholls was more circumspect about income sharing, stressing the unusual features of the case,  namely the limited capital and surplus of income in a long marriage with children where the wife had given up a lucrative career for the sake of the marriage. He also referred to the rationale of compensation, 'aimed at redressing any significant prospective economic disparity between the parties arising from the way they conducted their marriage'.  In addition, he referred to the sharing rationale but only in the context of capital not income.  He therefore appeared to deny the possibility of income sharing. In short, although revolutionary in stating that periodical payments need no longer be limited by reasonable needs,  the dicta of Lord Nicholls ignored the possibility of the sharing of income. Indeed he stressed the importance of finality upon the ending of the marriage, referring to the social desirability of a clean break and the self-evident undesirability of continuing ties  but stating that this can be overridden if compensation is needed.
The following year Baron J. in the High Court case of Lauder v Lauder acknowledged the wife's compensation claim but refused to quantify it separately.  Although she expressed her intention to 'give proper consideration to the recent guidance of the House of Lords in Miller v McFarlane' she based the award of periodical payments on a generous interpretation of reasonable needs.
The following year in the case of Hvorostovsky v Hvorostovsky,  the Court of Appeal made an award of enhanced periodical payments to a sum in excess of the wife's actual needs. It did not accept the wife's submissions that she had sacrificed her dancing career to follow her opera-singer husband. Instead, Thorpe L.J. characterised her position as being a contribution not a relationship-related disadvantage deserving compensation.  In granting her application for a variation of the periodical payments, he referred to the 'husband's greatly increased income' and indicated that as the single factor of greatest significance.  Again, reasonable needs were not a ceiling on the award but the rationale of compensation was eschewed.
Given the controversy surrounding income sharing, it is hoped that the results of a survey will provide some interesting data to inform the debate. Philip Moor and Valentine le Grice have written that '[they] very much doubt that an indefinite order for periodical payments in sums well in excess of strict need are in tune with the views of the population as a whole'.  Survey data may provide some indication of the views of the population.
The respondents were obtained by level 2 and 3 undergraduate law students at the Universities of Sheffield and Greenwich, as part of their assessment on their family law module. Approximately 240 students carried out the research project. They were given training in conducting survey research and were asked to recruit a minimum of 10 respondents each. They were each allocated a respondent target group, thereby ensuring that a full range of ages above adulthood was surveyed, producing a stratified sample dividable into the six main age groups.
The findings are derived from 2,394 questionnaires: 1800 of these are from the University of Sheffield and the balance from Greenwich University. The survey was conducted in the autumn of 2010 and spring of 2011.
Basic demographic information about the respondents was obtained such as gender, age, employment status and marital and parental status but excluding their name or any other identifying characteristics. The sample sizes were too small for analysis of religion or ethnicity.
In terms of the gender of the respondents (n=2225), 48.1% (n=1071) were male and 51.8% (n=1154) were female. Regarding age (n=2268), TABLE 1 shows that just over a third (n=820) were aged 18 to 24, reflecting the fact that the study was conducted by student researchers. However, other age groups are sufficiently reflected to enable statistical analysis, showing that the allocation of target groups did assist the stratification of the sample.
In terms of the employment status of the respondents (n=2243), TABLE 2 shows that just over a third (n=762) were students and 36% (n=803) were employed full-time, again reflecting the fact that the study was conducted by student researchers. The total number of responses actually exceeds the number of respondents as they were invited to tick more than one category if applicable. There was therefore some duplication of categories, involving those of part-time employment and student status.
In terms of the marital status of the respondents (n=2217), TABLE 3 shows that nearly half (n=1024) were single and just over a third (n=797) were married. Only one tenth (n=238) were cohabiting.
Regarding parental status (n=2218), 43.5% (n=965) had children whereas 56.5% (n=1253) did not have children.
Some limitations with the sample must be acknowledged as it was not obtained randomly. Given that the majority of the respondents were obtained by a Russell Group university, it may be expected that there is some bias towards middle-class, educated respondents. This concern may be mitigated by the involvement of Greenwich University, which is a widening participation university with the majority of its students being first generation students from a working class background. The limitations of this design of student survey are discussed at greater length in the journal article by Gary Potter and Catherine Williams.  Care should be taken when interpreting the statistics: they are representative of the respondent population but not of the general population.
In the following scenarios, the husband and wife have been married for twenty years. They have two grown-up children. The husband and wife are both aged in their fifties. The wife has never worked outside the home. The husband works as a city trader. He earns £5 million per year. What share should the wife receive of the husband's future income? Tick one box only.
TABLE 4 shows the breakdown of the responses. Of our respondents, 47.1% (n=1124) thought that the wife should be awarded half of the husband's future income where it was a long marriage. The close behind option was income to meet her needs, namely 40% (n=954).
In the following scenario, the husband and wife have been married for twenty years. They have two grown-up children. The husband and wife are both aged in their fifties. The wife has never worked outside the home. The husband is a professional polo player. He receives an income of £5 million per annum. He receives this income from a trust fund, as he was born into a wealthy family. What share should the wife receive of the husband's future income? Tick one box only.
TABLE 5 shows the breakdown of the responses. 43.4% thought that the wife should be limited to her needs (n=1035) and 41.9% thought that she should be awarded one half (n=999).
In the following scenario the husband and wife have been married for three years. They have no children. They are both aged in their early twenties. The wife is a home-maker and has never worked outside the home. The husband works as a city trader. He earns £5 million per year. What share should the wife receive of the husband's future income? Tick one box only.
TABLE 6 shows the breakdown of the responses. Where the marriage was short and childless, 34.2% thought that the wife should be awarded nothing (n=817), 44.5% thought that she should be limited to her needs (n=1065) and 20.2% thought that she should be awarded half of the husband's future income (n=483).
In both the following scenarios the husband and wife have been married for three years. They have no children. They are both aged in their early twenties. The wife is a home-maker and has never worked outside the home. The husband is a professional polo player. He receives an income of £5 million per year. He receives this income from a trust fund, as he was born into a wealthy family. What share should the wife receive of the husband's future income? Tick one box only.
TABLE 7 shows the breakdown of the responses: 40.3% thought that the wife should be awarded nothing (n=960) whereas only 12.9% believed that she should be awarded a half of the husband's future income (n=308).
In general, with regards to the division of income, a greater proportion of the survey respondents supported income sharing for the longer term marriage than the shorter one. Respondents also seemed to be more supportive of income sharing when the income was derived from employment than when it was derived from a family trust. The percentage of the survey respondents who considered that a wife should be awarded half of the husband's future income decreased from 47% when it was a long marriage to 42% when the income was derived from a family trust to 20% when it was a short marriage.
The above results are based on the respondent population as a whole. However, it is illuminating to identify further patterns relating to demographic factors. For example, marital status influenced responses: respondents who were single were less generous towards the wife than those who are or have been in a relationship.
For the question where it was a short marriage with the income being provided by a trust fund, TABLE 8 shows the breakdown of the responses in terms of marital status.
A much higher proportion of single people indicated that the wife should receive nothing (44.1% of single respondents), compared with those cohabiting (39.5% of cohabiting respondents) or married/civil partnered (34.1% of married/civil partnered respondents). This is not linked with single people being younger as there were no statistically different results between different age ranges.
In addition, the responses differed according to gender, with men being less generous. Men were 1.4 times more likely to suggest 'nothing' in the scenarios involving short marriages although both genders overwhelmingly saw meeting needs in a short marriage as the correct level. Broadly similar patterns applied to the other scenarios. Again using Question 3a as illustration (short marriage and income derived from trust fund), TABLE 9 shows the breakdown of the responses in terms of gender.
A much higher proportion of female respondents indicated that the wife should receive half or more (16.3%), compared with male respondents (9.2%), but most of the respondents considered meeting needs to be the correct level of support in a short marriage with the income derived from a trust fund.
This gender divide was also reflected in the patterns of responses from parents/non-parents. Parents were more generous with provision for the wife than non-parents. Again using Question 3a as illustration (short marriage and income derived from trust fund), TABLE 10 shows the breakdown of the responses in terms of being a parent.
A much higher proportion of respondents without children indicated that the wife should receive nothing (43.7%), compared with respondents who are parents (34.1%). This was exacerbated when combined with male/female responses. Again using Question 3a as illustration (short marriage and income derived from trust fund), TABLE 11 shows the breakdown of the responses in terms of being a parent.
The most striking difference is with male respondents who did not have children: nearly half considered that the wife should receive nothing (49.1%). This was a much higher proportion than the female respondents without children (38.7%). A much higher percentage of female parents and non-parents considered that the wife should receive half or more (17%) than their male equivalents (9.7% and 11.4%).
Where it was a longer marriage, women were more in favour of income sharing. using Question 5b as illustration (long marriage and earned income), TABLE 12 shows the breakdown of the responses in terms of gender.
A much higher proportion of female respondents indicated that the wife should receive half or more (59.2%), compared with male respondents (44.3%). This was again reflected in Question 5a (long marriage and income derived from trust fund) where 55% of the female respondents considered that the wife should receive half or more of the husband's income. In short, the majority of the female respondents supported income sharing where it was a long marriage regardless of the source of income.
Although income sharing does not necessitate an award of half of the payer's income, the survey data provides a surprising level of support for the principle of sharing of income beyond needs between spouses. This is even where income sharing would not be justified by being expressed in terms of an award of compensation. The survey data also shows clear support for the use of discretion in the effect of duration of marriage and source of income.
The survey respondents appeared to be more supportive of income sharing when the income was derived from employment than when it was derived from a family trust. Although income is a factor for consideration by the court,  consideration of the source of the income is not explicitly required by the statute. Nevertheless, the survey responses appear to approve the judicial innovation of the ring-fencing of inheritance, by categorisation as non-matrimonial property. Lord Mance in Miller/McFarlane summarised the court's approach: 'The yardstick is not so readily applicable to non-matrimonial property, especially after a short marriage, but in some circumstances even after a long marriage'.  The data suggests that the majority of survey respondents recognised the importance of the source of the income and supported a departure from equality for income derived from a family trust.
The case of Miller/Mcfarlane opened the way for the family law courts to make more generous provision on divorce, by way of income sharing. This allows an award of periodical payments not limited by the respondent's reasonable needs, but instead expressed as a share of the payer's income. However, the concept of income sharing has been subject to criticism: academic negativity being matched by judicial reluctance to make such awards.
This study sets out survey data, using fictional scenarios to indicate views about the desirability of income sharing. Of the sample of just under 2,400 respondents, 47% considered that a recipient should be awarded a share equivalent to half of the payer's future income. However, this was only where it was a long marriage and the income was not derived from a family trust. It can therefore be seen that the survey data supports the application of judicial discretion when considering the implications of duration of marriage and source of income. Analysis of the survey results also reveals a gendered dimension to views about income allocation: a higher proportion of female respondents than male respondents approved income sharing, especially in long marriages. Of the female respondents, 59% considered that a wife should be awarded a share of income beyond needs in a long marriage, compared to only 44% of male respondents.
The survey data is surprisingly supportive of income sharing, particularly amongst female respondents. However, it should be noted that the survey only addresses the quantification of periodical payments. Future research could remedy this by seeking views on the clean break principle and the issue of duration of periodical payments. Further research on the duration of periodical payments would aid an assessment of the desirability of income sharing beyond reasonable needs.
We are grateful to Garfield Potter for carrying out an initial data analysis and to Lucy Yeatman for her comments on an earlier draft of this article. All errors and other deficiencies are ours alone.
 Law Commission, Matrimonial Property, Needs and Agreements, LCCP208 (2012) Consultation Document and Law Com No 343 (2014) Final Report.
 Matrimonial Causes Act 1973 s. 25 (2) (a).
 E. Hitchings, 'Every day cases in the post-White era'  Fam Law, Aug, 873.
 Matrimonial Causes Act 1973 s. 25 (2).
 Piglowska v Piglowska  1 WLR 1360,  2 FLR 763.
 Suter v Suter  3 WLR 9,  2 FLR 232.
 Matrimonial Causes Act 1973 s. 25 (A) (1).
 R. Bailey-Harris, 'Lambert v Lambert - towards the recognition of marriage as a partnership of equals' (2003) CFLQ 15(4) 417 at 417.
 Law Commission, Matrimonial Property, Needs and Agreements, LCCP208 (2012) at para [4.107].
 Dart v Dart  2 F.L.R. 286,  Fam Law 607.
 E. Cooke, 'Miller/McFarlane: law in search of discrimination'  CFLQ 19(1) 98 at 99.
 Duxbury v Duxbury  2 All ER 77.
 White v White [ 2001] 1 AC 596,  3 WLR 1571.
 Miller v Miller, McFarlane v McFarlane  UKHL 24,  1 FLR 1186 (hereafter Miller/McFarlane).
 Ibid at paras  and .
 RP v RP  EWHC 3409 (Fam),  1 FLR 2105 at para .
 Lauder v Lauder  EWHC 1227 (Fam),  2 FLR 802 at para .
 CR v CR  EWHC 3334 (Fam),  1 FLR 323.
 Charman v Charman  EWCA Civ 503,  1 FLR 1246.
 VB v JP  EWHC 112 (Fam),  1 FLR 742.
 A. Murray, 'Are our higher courts prejudiced against the role of the married woman? The need for reform', (2013) Fam Law, (Jan) 66 at 73.
 Hvorostovsky v Hvorostovsky  EWCA Civ 791,  2 FLR 1574.
 B v S  EWHC 265 (Fam),  2 FLR 502.
 H v H  EWHC 459 (Fam),  2 FLR 548.
 Lawrence v Gallagher  EWCA Civ 394,  2 FLR 643.
 B v B  EWHC 193 (Fam),  2 FLR 1214.
 G. Brasse, 'It's payback time! Miller, McFarlane and the compensation culture',  36 Fam Law, Aug, 647 at 648.
 P. Moor and V. Le Grice, 'Periodical payments orders following Miller and McFarlane - a series of unfortunate events' (2006) Fam Law, Aug, 655 at 657.
 E. Cooke, 'Playing parlour games : income provision after divorce', (2004) Fam Law, (Dec) 906 at 907.
 S. Davis, 'Equal sharing : a judicial gloss too far?' (2008) Fam Law, 38, 428 at 429.
 Thorpe, 'London - the divorce capital of the world' (2009) Fam Law, 39 (Jan), 21 at 24.
 A. Murray, 'Guidelines on compensation: VP v JP' (2008), Fam Law, Aug, 756 at 759.
 S. Ouazzani, 'Ancillary relief and the public/private divide', (2009), Fam Law, Sept, 39 (1), 842 at 844.
 J. Miles, 'Charman v Charman (No 4) - making sense of need, compensation and equal sharing after Miller/McFarlane (2008) CFLQ 378 at 385.
 I. Ellman, 'The theory of alimony', (1989), 77(1) California Law Review 3 at 81.
 J. Eekelaar, 'Property and financial settlement on divorce - sharing and compensating' (2006) Fam Law, Sept, 754 at 756.
 Moor P. and Le Grice V., 'Periodical payments orders following Miller and McFarlane - a series of unfortunate events' (2006) Fam Law, Aug, 655 at 658.
 The earlier part of the questionnaire asked respondents to decide the division of capital.
 P. Leith, 'A Note on Using Vignettes in Socio-Legal Research', (2013) 19(3) Web JCLI.
 G. Potter and C. Williams, 'Two birds, one stone: combing student assessment and socio-legal research' (2007) The Law Teacher 41(1), 1.
 Radmacher v Granatino  UKSC 42,  3 WLR 1367 at para .
 Matrimonial Causes Act 1973 s.25(d).
 Law Commission, Matrimonial Property, Needs and Agreements, LCCP208 (2012) at para .
 R. Bailey-Harris, 'Lambert v Lambert - towards the recognition of marriage as a partnership of equals' (2003) CFLQ 15(4) 417 at 420.
 Matrimonial Causes Act 1973 s.25(2)(a).

References: UKHL 
 EWCA 
 EWCA 
 EWCA 
 V. 
 UKSC