The long-awaited court judgment on June 13 2017 of Sharp v Sharp has changed the way the courts will divide up a divorcing couple’s assets where the marriage is short and childless. Lisa Cogger, Matrimonial Solicitor, at Bowcock & Pursaill, explains what the Sharp case means for future divorce cases.
Lisa says: “Lord Justice McFarlane ruled that the combination of potentially relevant factors e.g. a short marriage, no children of the family, dual incomes and separate finances, was enough to justify a departure from the equal sharing principle, that has been long established, to achieve overall fairness between the two parties.
“Prior to the Sharp judgment there had not been a legal distinction between a ‘short’ and ‘long’ marriage meaning there was no defined point after which wealth generated should be shared.
“Previous case law had suggested that all matrimonial property and assets should be divided equally, but this decision acknowledges that while this may be appropriate in many cases, it should not be an automatic presumption. The Sharp case is a prime example that the length of the marriage is a relevant factor to be taken into account when apportioning the assets.”
The Sharp case:
Mrs Sharp, a successful City Trader, appealed a divorce judgment and argued that her husband should not get as much as half of the matrimonial assets given their marriage was short, childless, they both enjoyed full-time employment and had largely kept their finances separately.
Originally the Court awarded Mr Sharp £2.725 million, worked out as half of the matrimonial assets. The Court of Appeal subsequently reduced Mr Sharp’s award to £2million.
The Court of Appeal also took a different approach to the properties, considering that Mr Sharp should receive 50% of the value, circa £1.3million, and further held that Mr Sharp should receive an additional lump sum to make a total of £2million, having taken into account the standard of living enjoyed throughout the marriage, the ‘need’ for a modest capital fund in order to live in the property he would retain and some share in the assets held by Mrs Sharp.
What does the Sharp case mean for divorce law?
It is felt it will now create another issue for divorcing couples to argue about when it comes to dividing their finances on divorce. Indeed the question still remains, for example, how many years constitute a short marriage? This can be difficult to answer, particularly, if couples live together before marriage as this period of cohabitation can be added to the length of the marriage.
Pre-nuptial agreements and cohabiting couples
What this case does highlight is the serious need for couples to consider entering into a pre-nuptial agreement to decide how their assets are to be divided. While these lack romance, they provide certainty in that current case law shows they will be upheld unless there are significant reasons not to.
Some people take the view that if they only have a house together and nothing else such as pensions or investments, then they do not consider an agreement is worthwhile. But for people with pre-acquired wealth or who will acquire or inherit more assets then it is a sensible step to take, to negate the need for divorcing couples to face uncertain and costly litigation.
The problem with pre-nuptial agreements is one of perception, as people look at the cost to have one. However, when this is weighed against the significant legal and court expenses involved, this highlights the significant benefits of putting in place a pre-nup before you marry.
According to the latest report from the Office for National Statistics cohabiting couple families are the fastest-growing family type. Between 1996 and 2016 their numbers doubled from 1.5 million families to 3.3 million families.
Therefore, this case could not only highlight the pressure to legislate a new role for pre-nuptial agreements, but also for a long-awaited reform in the law concerning cohabiting couples to ensure their financial protection in the same way as divorcing couples.
For advice about protecting your assets in the event of a breakdown of marriage and your legal rights contact Lisa Cogger for an appointment today by calling 01538 370830 or via email at firstname.lastname@example.org