Stick or twist? The spousal maintenance lottery

Stick or twist? The spousal maintenance lottery

The recent decision of the Court of Appeal in Waggott v Waggott [2018] EWCA Civ 727, a case dubbed ‘‘meal ticket for life’’, gives food for thought to the future of Spousal Maintenance Orders and applications to vary those already in existence.

The wife in this case sought an increase to her annual maintenance payments in the sum of £175,000 following a financial settlement in 2012 in which she received £9.7 million. Any application to the Court for a variation of spousal maintenance carries the risk that the Court can use its discretion to vary the payments downwards as well as upwards. However, in this case the application prompted the husband to challenge the original award itself.

The Judge determined that the wife could make up the shortfall she required to meet her income needs by investing approximately 10% of her original award and living off the interest. As a result, it was ordered that the spousal maintenance payments should terminate entirely from March 2021. The Court held that to order the sharing of post-separation earnings would undermine its ability to effect a clean break, highlighting the fact that this remains the preferred outcome of the Courts.

The decision in this case indicates that Spousal Maintenance Orders on a ‘’joint lives’’ basis (where an order for maintenance is to remain payable until the death of either party, the remarriage of the recipient or further order of the Court) are becoming less and less common and are likely to only be awarded in exceptional circumstances. It also highlights the Court’s expectation for the recipient to maximise their earning capacity, whether through investment or employment. Finally, it focuses the need for careful consideration to be given to any prospective application to vary an existing Spousal Maintenance Order and the need to balance the prospect of a successful outcome against the risk that the original Order could be reduced or even overturned.

It is therefore important to bear in mind that such applications could in fact place you in a very different position to your desired outcome and with a significant legal bill.

If you would like specialist advice on spousal maintenance or any other family law issues, please do not hesitate to contact our family team on 020 3814 2020.