Does a recent Court of Appeal decision provide post-Brexit guidance for financial remedy claims?
One of the many issues for family lawyers to grapple with following June’s EU referendum vote is how this will impact on financial remedy claims. Lady Justice Black’s decision on 26 July 2016 in Ali v Ansar-Ali  EWCA Civ 781 suggests a way forward where a couple falls on harder economic times.
The husband had been a banker in Dubai in the latter stages of a 17-year marriage before the bank where he worked collapsed and he was made redundant, also suffering life-threatening ill health. The assets involved nearly £4m, including the family home, rental properties, shares, and a Jersey trust.
At first instance, Recorder Feehan QC remarked that ‘it is often necessary in financial remedy proceedings to take notional figures for the value of the assets so as to be able to consider the potential effect of various possible orders and settle upon the one which is appropriate in the particular circumstances of the case. Although this can give the appearance of precision, this is deceptive in that the asset may ultimately not realise exactly the notional figure’.
The husband appealed the first instance decision of a capital split divided as to 55:45 in favour of the wife. Black LJ was not, however, persuaded that the husband had been treated unfairly by being given the less liquid assets. This was largely because the wife’s share of the assets was not free capital in her hands. It was partly tied up in the former matrimonial home and partly tied up because it had to serve as a Duxbury fund in order to top up her income, given her modest earning capacity.
Black LJ remarked: ‘Coming full circle, one stands back to consider in the light of all the various factors whether the capital provided to the wife was over-generous or provided for her at an unfair cost to the husband whose needs were neglected.’
While this decision relates back to the events of the 2008 worldwide banking crisis, it is timely given the current uncertain financial climate and post Brexit planning which has already started in investment banks and other financial institutions.
It is particularly important therefore when formulating settlement offers for practitioners to be aware that in light of this recent Court of Appeal guidance, husbands are likely to struggle to succeed on arguments that they will be treated unfairly if they receive the less liquid assets. We can expect financial needs to continue to be the determining factor for the majority of cases, particularly for wives left with modest earning capacities and reliant on Duxbury funds of uncertain value, and while the financial markets remain subject to higher levels of volatility in uncertain times.
This article was originally published in Family Law and can be found here.
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