Equal sharing principle Definition

GLOSSARY

What does Equal sharing principle mean?

That matrimonial assets should be shared in equal proportions unless there is good reason to depart from equality.

This principle was established in the House of Lords decision in White v White [2001] 1 All ER 1, [2001] 1 AC 596. In Charman v Charman [2007] EWCA Civ 503, (2007) 1 FCR 1246 it was stated that the equal sharing principle applies to all of the parties' property but to the extent that it is non matrimonial there is a better reason to depart from equality.

View the related practice notes about Equal sharing principle

Compensation, sharing and equality

The House of Lords' decision in White v White significantly changed the general principles on which financial order cases are determined.Before White, awards in big-money cases were based largely on reasonable requirements. A party would receive such capital and income as was necessary to enable them to meet their reasonable needs. In cases where there was surplus income and capital after such needs had been met, one party could be left with a considerably greater share of the wealth. Significant time and costs were consequently spent arguing over what amounted to reasonable needs in a particular case and many were left with a sense of an unfair outcome.The judgment in White made fairness the overriding objective in financial proceedings, judged against what the House of Lords called ‘the yardstick of equality’. This meant that in all future cases the aim was to achieve a fair outcome. To decide if a result was fair, consideration had to be given to the outcome on an equalisation of the resources. The House of...

Special considerations in big-money cases

The House of Lords decision in White v White established that a claimant’s needs in big-money cases should not be the determinative factor. Prior to White, financial relief was usually limited to financial needs or reasonable requirements, together with, where there was a surplus of assets, a capital cushion or nest egg. The House of Lords stopped short of approving a presumption of equality of division, but did state that the court’s task was to achieve fairness between the parties and to test any proposed financial order against the yardstick of equality, and that as a general guide ‘equality should be departed from only if, and to the extent that, there is good reason for doing so’.In big-money cases, as in all cases, the three principles of fairness apply: needs, compensation and sharing, and while the principle of equal contribution/equal sharing extends even to families who have extraordinary levels of wealth (see AAZ v BBZ for example, a case involving £1 billion in assets), inevitably, since White, much of the...

Discover our 3 Practice Notes on Equal sharing principle

Family monthly highlights—July 2021

This month’s edition of Family highlights includes details of amendments to the Family Procedure Rules 2010 to automatically deem victims of domestic abuse as ‘vulnerable’ for the purposes of determining whether a participation direction should be made under the Domestic Abuse Act 2021, the publication by Mostyn J of a new port alert standard order and details of the third Nuffield Family Justice Observatory report on remote hearings. Habitual residence in the context of international adoption is considered, together with guidance on the use of the resolutions model within public law proceedings and declarations of parentage in relation to an adopted child. Procedural guidance on challenging a financial remedy arbitral award is set out, together with consideration of the division of assets in a short childless marriage. In addition to links to analysis of other key decisions, recently updated and new content is also detailed, including a new Practice Note on sequestration to enforce a financial order.

Division of assets in a short childless marriage (E v L)

Family analysis: In E v L, Mr Justice Mostyn considered an application for financial remedies following a short marriage. He concluded the fact that the marriage was childless was irrelevant to whether there should be a departure from the application of the equal sharing principle. Moreover, there was no reason to distinguish between an accrual (of assets) over a short marriage and an accrual over a longer marriage. The statutory factor of the duration of marriage was likely to be reflected in any event in that an acquest over a shorter period was likely to be less. Mostyn J also considered the approach to valuing businesses in this case where three accountants gave ‘hot-tub’ evidence as to the value of one of the husband’s companies. Tahmina Rahman, barrister at 1GC Family Law Chambers, considers the issues.

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