The Matrimonial Causes Act 1973, particularly section 25, plays a crucial role in financial settlements on divorce in England and Wales. When a marriage or civil partnership breaks down, the division of assets, income, and liabilities becomes a central issue. Section 25 provides the legal framework that guides the courts in making decisions about family finances. It is therefore important to have a good understanding of its key principles when participating in family mediation.
What is Section 25?
Section 25 of the Matrimonial Causes Act 1973 sets out some specific factors that the court must consider when deciding what financial orders to make on divorce. There is no standard formula for calculating who gets what.
In this blog series, we will examine each of these factors in turn.
Welfare of Children
But before the court considers the s.25 factors, the Judge is required to give “first consideration” to the welfare of any minor child of the family.
“Child” in this context means any child who has been treated by both parties as a child of the marriage.
S.25 Factors
In headline terms, the factors are the following.
• Financial Resources: The current and future income, earning capacity, property, and other financial resources of both parties.
• Financial Needs: The present and future financial needs of each party, including housing, retirement, and income requirements.
• Standard of Living: The standard of living enjoyed by the family during the marriage.
• Age and Duration of Marriage: The age of each party and the length of the marriage. A longer marriage may create greater financial interdependence.
• Disabilities: Any physical or mental disabilities of either party.
• Contributions: The contributions made or likely to be made by each party to the welfare of the family, including financial and non-financial contributions (e.g., homemaking and childcare).
• Conduct: In rare cases, the court may consider the conduct of either party if it would be inequitable to disregard it.
• Loss of Benefit: The value of any benefit (e.g. pension) which a party will lose the chance of acquiring upon divorce.
The Overriding Objective: Fairness
The court has wide discretion when applying Section 25, but the overriding objective is to achieve a fair and just outcome. This means ensuring that both parties’ reasonable needs are met, and that they can maintain a reasonable standard of living after the divorce, if possible. The court does not use a mathematical formula but tailors its decision to the specific facts of each case.