Personal Injury Damages not ‘ring fenced’ on Divorce
The recent decision of the Court of Appeal in Mansfield -v- Mansfield provides guidance on how monies received by one party from a personal injury claim are treated upon divorce.
In this case the husband had received damages of around £0.5million in1998 before he and his wife met. These monies was invested by the husband in the purchase of two properties; a bungalow in which he lived (The Orchards) and which was specially adapted for his needs and a two bed investment flat which he rented out to provide him with an income.
The couple married in 2003 and had twins who were 4 years old at the time this case was dealt with. After the parties separated in 2008 the wife and children moved into rented accommodation whilst the husband continued to live at The Orchards. It was accepted that during the marriage the wife had contributed around £30,000 to the renovation of The Orchards from the sale of her previous property.
The matter initially went before a District Judge who ordered that the husband should pay the wife a lump sum of £285,000, which was roughly 50% of the matrimonial assets to enable her to buy a property and to provide the children with their primary home. The Judge acknowledged that it was likely that the husband would have to sell The Orchards to comply with this order.
The husband appealed to the Circuit Judge and thereafter the Court of Appeal seeking a reduction in the lump sum payable to the wife or alternatively a charge over any property she purchased using the lump sum, realisable when the children finished school.
The Court of Appeal held that whilst it was correct that damages received from a personal injury case could not be ring fenced, weight should be given to the origin and nature of the monies and the needs of both parties including any ongoing needs arising from one party’s disability.
In this case the Court found that the husband’s needs were likely to increase over time due to his disabilities whereas the wife’s needs as the primary carer of the children would reduce once the children had finished full time tertiary education.
Although the Court of Appeal did not consider it appropriate to reduce the quantum of the payment to the wife they ordered that the husband was to have a charge over the wife’s future property in the sum of one third of the capital awarded to her realisable upon the children finishing tertiary education.
This case underlines that although monies received as a result of a personal injury claim are not ring fenced neither are they are they simply added into the ‘matrimonial pot’ with other assets accrued during the marriage. The court will look at each case on its own facts and especially where the monies were received prior to the marriage, weight will be given to the origin of the monies and both the current and future needs of both spouses. This case is also a reminder that the welfare of any dependent children is the courts first consideration.
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