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Section 25 of the Matrimonial Causes Act 1973 - finances

Fiona Wood

29.10.2018

The law that governs financial settlements on divorce is a law of discretion. There are no rules which state how the assets should be divided, if spousal maintenance should be paid and if so how much should be paid and for how long.  The law does however contain guidelines regarding what a judge should consider when deciding what an appropriate financial settlement is. These guidelines are contained in section 25 Matrimonial Causes Act 1973. These are often referred to as the section 25 factors.

  • The income, earning capacity, property and other resources which each spouse has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity it would be reasonable to expect the spouse to take steps to acquire
  • The financial needs, obligations and responsibilities which each spouse has or is likely to have in the foreseeable future
  • The standard of living enjoyed during the marriage
  • The ages of each of the spouses and the length of the marriage
  • Any physical or mental disability of either spouse
  • The contributions which each spouse has made or is likely to make in the foreseeable future towards the welfare of the family, including any contribution by looking after the home or caring for the family
  • The conduct of each spouse if considered relevant (this relates predominantly to financial misconduct, not adultery or negative behavior by one spouse towards another)
  • The value to each spouse of any benefit they will lose the chance to acquire as a result of the divorce
  • The financial needs of any child
  • The income, earning capacity, property and other resources of any child
  • Any physical or mental disability of any child
  • The manner in which any child was being educated and in which the couple expected the child to be educated or trained

All these factors are equally important. However, once they have been considered, the judge must also consider the couples’ needs and those of their children. But "need" is an elastic concept - at a basic level, need is having somewhere to live, and money to live on. The section 25 factors will govern how the judge interprets need in each case.

While it would be great if a solicitor could tell their client precisely the financial settlement they will get if they divorce, the number of factors that a judge has to take into account, and the discretion that they have when doing this, means this is not possible. An experienced family lawyer will, however, be able to tell you the likely settlement, and give you a range of outcomes.

As a result of this law, if you put the same set of facts before several different judges, each of them may order a different settlement, although the outcomes should be within a range and not differ dramatically. This is why many spouses prefer to negotiate a financial settlement, giving them certainty, rather than have a judge decide their fate, the outcome of which is unpredictable.

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