The England and Wales Family Court (EWFC) has awarded a formerly high-earning wife 54 per cent of the couple's GBP13-million matrimonial assets, because she had ‘made a relationship-generated sacrifice of her high earning career in investment finance to devote herself to supporting her husband's career choices and providing child-care for her children’.
The couple married in the US in 2006 and moved to the UK later that year while both pursued careers in international finance. Two children were born in 2008 and 2011. In 2008, the wife took maternity leave. This being the year of the financial crash, she was made redundant by the bank she worked for and never worked in the field again, devoting herself to the child-care role instead.
When the marriage broke down in 2021, part of the wife's financial remedy claim was based on compensation for her lost earnings in taking up this child-care role. The EWFC noted that a series of judgments over the past 15 years have demonstrated the England and Wales courts' wariness of free-standing awards for compensation for lost career prospects.
The objection is that awarding compensation could lead to 'double-counting' in assessing the award. Relevant authorities include Miller v Miller and McFarlane v McFarlane (2006); RP v RP (2006); SA v PA (2014); and Waggott v Waggott (2018). The EWFC found that Waggott, although not specifically about compensation, ‘makes clear that the court should not value an earning capacity for sharing purposes’, meaning in practice that compensation claims are discouraged as the concepts are closely related.
However, in the current case of TM v KM, Hess HHJ has followed the more recent judgment in RC v JC (2020 EWHC 466), in which Moor J awarded the wife a discrete compensation award of GBP400,000 on top of her equal-sharing entitlement. This was because before having children she would in all probability have become a very high earner. Although Moor described his decision as 'exceptional' and emphasised that such cases will be very much the exception rather than the rule, Hess has now also concluded that TM v KM is 'one of those rare and truly exceptional cases where a discrete compensation award is appropriate'.
Accordingly, he added GBP500,000 to the wife's equal-sharing award, to be paid now as a lump sum on a clean break basis (TM v KM, 2022 EWFC 155).
News Source：【STEP 2022/12/12】
