I’m going to refer you to 3 reported cases here.  

Up until about the year 2001, when the courts were looking at how to divide the assets on divorce they looked at section 25 of The Matrimonial Causes Act 1973 Act but they also considered how to make sure that the “reasonable requirements” of the financially weaker party could be met.

White v White

That changed when an important case came before the House of Lords.  The case was called White v White [2000] UKHL 54.  It was a farming case, but the facts are not so important, what we are interested in is what the judges said.

Firstly the House of Lords stated that the court’s role was to find an outcome which was “fair”.  In deciding what was fair there could be no discrimination between husband and wife.  Whatever the “division of roles” in the marriage this was not to prejudice either party when considering the section 25 factors.  There was to be no bias in favour of a breadwinner as opposed to a home maker or child-carer.

Secondly it was stated that the court should check its tentative views against what the court called “the yardstick of equality”.  The court should only depart from equality if there was a good reason for doing so.

Miller v Miller, McFarlane v McFarlane

The next important case you need to be aware of is the case where two divorces were considered by the House of Lords at the same time: Miller v Miller, McFarlane v McFarlane [2006] UKHL 24.  In that case the House of Lords identified 3 principles which were the basis for decisions in matrimonial finance cases:

• Needs,
• Sharing, and
• Compensation.

Lord Nicholls said that “needs” would often be the primary factor and that in most cases the search for fairness would end at this stage:

“When the marriage ends fairness requires that the assets of the parties should be divided primarily so as to make provision for the parties’ housing and financial
needs, taking into account a wide range of matters such as the parties’ ages, their future earning capacity, the family’s standard of living, and any disability of either
party. Most of these needs will have been generated by the marriage, but not all of them. Needs arising from age or disability are instances of the latter.
In most cases the search for fairness largely begins and ends at this stage. In most cases the available assets are insufficient to provide adequately for the needs of two
homes. The court seeks to stretch modest finite resources so far as possible to meet the parties’ needs. Especially where children are involved it may be necessary to
augment the available assets by having recourse to the future earnings of the money-earner, by way of an order for periodical payments.”

In cases however, where there is more than enough money to meet the parties’ needs the court will move on to consider the so called “sharing” principle.  Under that principle the parties are entitled to an equal share of the money which was generated during the marriage.

Charman v Charman

A third case was Charman v Charman [2006] EWHC 1879.  That was a case before the Court of Appeal.  The court summarized the principles declared by the House of Lords in the earlier two cases.  It also dealt with the sharing principle in a bit more depth.  What was to be shared?  What if some of the parties’ property came from outside the marriage?

‘[66] … We consider, however, the answer to be that, subject to the exceptions identified in Miller … the [sharing] principle applies to all the parties’ property but, to the
extent that their property is non-matrimonial, there is likely to be better reason for departure from equality. It is clear that both in White at p 605 F–G and in Miller
at [24] and [26] Lord Nicholls approached the matter in that way; and there was no express suggestion in Miller, even on the part of Baroness Hale, that in White the
House had set too widely the general application of what was then a yardstick.’

It is arguable that the so-called principle of “compensation” does not arise in the overwhelming majority of cases.