news from laceys mediation
MED8 Legal Update
March 2006
Maintenance
McFarlane v McFarlane is concerned with future income and has gone to the House of Lords, with a decision due by Easter. The Court of Appeal re-instated the first instance award of £250,000 but limited to an extendable term of 5 years. This was a long marriage with 3 children. Originally the wife was awarded £250,000 pa on joint lives ( a third of the husbands net), but this was reduced to £180,000 pa on joint lives on appeal.
Parlour v Parlour, the famous footballer case is also due for review by the House of Lords. This was a 3-year marriage with 3 children. The maintenance award was £250,000 per annum. On appeal the wife got £440,000 per annum (37% of husbands income), reviewable after 4 years to ascertain whether a clean break was appropriate. The overriding objective was fairness.
In both cases there was insufficient capital to achieve an immediate clean break.
Q v Q also involved a professional footballer. The wife was awarded 40% of the husband’s net income for a 4-year extendable term, allowing her savings of £860,800 pa in addition to the lump sum award of £1.5m.
In cases where net income substantially exceeds needs the court should consider any award beyond reasonable needs as a step along the road to an eventual clean break.
Capitalisation
The court will look to capitalise maintenance if there is sufficient monies available.The test is fairness. Overall calculations must account for the fact that at some point in the future the income provision needs to be reduced. The case of Co v Co highlighted this.
Term Orders
In Fleming v Fleming the wife was awarded £1,000 a month for 4 years with no bar on an extension to this period. She applied to extend just before the end of the term. She had been cohabiting for over 5 years. Awarded £500pm. On appeal the court held that when assessing the impact of cohabitation it should consider all consequences including financial and duration. Cohabitation is not equated with marriage.Remarriage terminates maintenance whereas cohabitation does not. Whether termination would cause undue hardship is the key consideration on an application to terminate
In S v B, the wife was awarded 2/3rds of the capital and nominal periodical payments for an extendable term of 10 years. On appeal it was held that this was not plainly wrong. Income funds had to be kept alive as a reasonable precaution against unforeseen developments.
Illiquidity
In F v F the court held that due to illiquidity of assets a clean break was not just, appropriate or possible. The wife received various lump sums, endowment policies and pension awards plus ongoing maintenance, which meant that both parties could enjoy income from the husbands’ business until capitalisation was possible.
Short marriages
The infamous case of Miller v Miller is due to be reviewed by the House of Lords shortly, so more later. This was a short marriage, where the wife’s award was increased because of the husband’s conduct in having affairs!
Maintenance pending suit
In Taiga v Taiga the husband was ordered to pay £300,000 per annum (£10,000pm for wife and £15,000 to cover legal costs). On appeal varied to £14,000 for wife and £25,000 costs! The purpose of MPS is to maintain the recipient pending the court’s final decision.
Costs
There is a landmark change coming into effect on 3rd April 2006. Paragraph 1(1) of the Family Proceedings (Amendment) Rules 2006 will establish in Rule 2.71(4) that the general rule in ancillary relief proceedings will be no order for costs. This will not apply to Children Act 1989 cases, or to cohabitee litigation.
However, a costs order can be made if due to the conduct of one of the parties unnecessary costs are incurred. In essence Calderbank letters are rendered otiose, but I can see the floodgates of conduct opening from avaricious lawyers! Mediation should benefit from the fallout.
Children
The Court of Appeal said in Al-Khatib v Masry 2005 that there was no family case that was not potentially open to successful mediation, even if it had not been attempted,or had failed during the trial process. Judicial supervision of the mediation process is vital.
Mabon v Mabon and others 2005, established that there is now a keener appreciation of the autonomy of the child and its consequential right to participate in the decision-making processes that fundamentally affect his or her family life.
A v A (Shared Residence) 2004 confirmed that in making a shared residence order the court was impressing upon the parties the need for cooperation within the family rather than control by one party. To strengthen this point, Re R (Children ) 2005 made it clear that a harmonious relationship between the parents was not a prerequisite for a shared residence order.
Where contact has been denied the passage of time should not be conclusive
in depriving children of a relationship with the non-resident parent, and
although a mother cannot be compelled to engage in therapy, adverse inferences
can be drawn against her. Re S (Contact: promoting relations with absent parent)
2004. Thorp LJ; “Whatever the difficulties, however scant the prospect
of success, the courts must not relent in the pursuit of the restoration of
what had been a natural relationship between father and child”.
On 11th May the Court of Appeal delivered judgement in the case of Halsey v Milton Keynes NHS Trust. It clarifies the Court's powers and emphasises the importance of Alternative Dispute Resolution.
So where are we now?
The Court affirmed the principle that a party could be penalised on costs for refusal to mediate (Dunnett v Railtrack)
You must routinely consider whether the case is suitable for mediation
Most cases are considered suitable for mediation
- Examples of unsuitable cases are – points of law; injunctive or other relief needed; fraud or other disreputable conduct It largely affects costs orders. Plainly there have to be very good cogent reasons not to mediate
The Court cannot compel parties to mediate, but should encourage them to do so and may require them to consider it
At the conclusion of a case, on the question of costs you will probably have to justify
- Why you didn’t consider mediation at all
- Why you didn’t consider whether mediation was suitable
- Why you decided the case was unsuitable for mediation
- Why you refused to mediate
Your problem is to assess in advance your chances of succeeding on the costs question. Your chances will depend on all the circumstances including
See a summary of the Halsey judgment at http://www.lawreports.co.uk/civmaye0.7.html
- Whether the Court has ordered mediation to be considered
- Whether the case is found to have been suitable
- Whether another party’s offer to mediate has been refused
- Whether mediation had a reasonable prospect of success
WHAT SHOULD I DO NOW?
Should you take the risk of not mediating?Contact: Mike Greenleaves on 01202 755900 for free guidanceWhat have you to lose from mediation?
Mediation is much quicker, much cheaper, is confidential, is under the control of the parties and can provide creative outcomes which are not available to a Court.
- The uncertainty, timescale and cost of Court proceedings
Our clients, in the course of court proceedings themselves, invariably appreciate being able to settle their cases in mediation and from our last 75 civil mediation cases we have achieved settlement in the vast majority of them
