Needs play a leading role in every case. In the majority of cases, needs plays the leading role. Not so much leading actress as the sole presence on the stage in a production written, directed and produced by needs. It is in the minority of cases where assets are of a sufficient size that needs can be generously interpreted and the principles of compensation and sharing even considered. And even when there is “big money”, it can be the generous interpretation of needs that dictates the size of the award as was the case with Ms. Estrada last month. Needs, in these courts, are ever subjective. Necessity is not the same for everyone.
In 2014, the Law Commission produced their report “Matrimonial Property, Needs and Agreements”. They identified three concerns: significant regional disparities in the interpretation of needs, the lack of a statutory definition and the increased number of litigants in person. Concluding their report, they invited the Family Justice Council to produce a guidance.
That Guidance (“Financial Needs” on Divorce) has now been published, endorsed by the President. It is addressed principally to the Courts themselves and, as set out in the foreword, the President reports that it has been disseminated amongst the judiciary and warmly welcomed.
For the practitioner (or Judge, the principal audience), this really should be familiar stuff and it is hoped that it contains no surprises although the fact that it has been published speaks for itself. The concepts, and cases referred to, certainly ought to be familiar reading but the guidance is undoubtedly helpful, a distillation and drawing together of the familiar. For the lay person, the guidance already produced by the same working group specifically targeted at litigants in person remains the go-to guidance although this document is a useful adjunct.
The guidance states its aims plainly. Namely, (i) to clarify the meaning of “financial needs” on divorce with particular reference to the most commonly encountered cases in which the available assets do not exceed the parties’ needs (i.e. “needs-based” cases) and (ii) to provide a clear statement of the objective that financial orders made to meet needs should (if possible) achieve, and to encourage consistency of approach by courts across England and Wales.
The guidance makes it clear that it does not change the law. To the professional reader, this hardly needs saying but it is significant. The Law Commission was specifically concerned with the lack of statutory definition. Needs, as described by the Law Commission in their original report, are quoted to be, and remain, ambiguous. Needs have “a very broad concept with no single definition in family law.” Needs, as the dictionary would have it, equates to necessity. It can be no fault of the guidance that this concern remains unaddressed. It remains the elephant in the room.
As for the guidance itself, it sets out a general overview of the law, looks at the particular subjects of housing, income and pensions. It concludes with worked examples and FAQs. Needs are, we are told, the provision of a home, income, and, where appropriate, later provision in old age. The reader is reminded that “reasonable requirements” have been disavowed but the generous interpretation of needs has gained acceptance (hardly a surprise given its origin). The judiciary are then guided as to how need should be measured, which assets can be made available, the importance to be fair to both and consideration of a clean break. This is not revolutionary stuff. This is the law as it is and ought to have been along. This is needs 101 and seemingly pitched an audience who, in my experience, do not, as opposed to should not, need instruction.
It is, however, warmly welcome. A single, unified document that draws cases and principles together and, for that reason alone, essential reading.