The Family Court Reporting Watch has turned up the following – and we’ve been asked on twitter to explain this story too.

The Mail Online reports ‘Abuse victim who was handed £175,000 compensation is ordered to give his ex-wife £100,000 of it as part of his divorce settlement’:

 

The report has been picked up by The Sun, the Express, and the Metro. However, there is not yet a published law report of the case, so we only know what the papers are saying.

 

What exactly was this case about?

As a child, Andrew Kerslake was the victim of sexual abuse. When an adult, he went to the police. His abuser was convicted and imprisoned. In 2002, while married, Mr Kerslake received £175,000 from the Criminal Injuries Compensation Board, which has now grown to £250,000.

He and his wife, Helen Tippett, are divorcing and are arguing about whether Ms Tippett should be entitled to receive some of that money.

The court has held that she is, and have ordered Mr Kerslake to pay her £100,000. He is appealing that decision but that appeal has not yet been heard.

 

The principles to be applied

The parties were married for 19 years and have four children.

At the end of a long marriage the usual starting point is an equal division of the matrimonial assets. There may be other assets which are classed as ‘non matrimonial’. Non-matrimonial assets will only be shared between the parties if required to meet their needs for somewhere to live and sufficient to live on. If they are not needed, they are kept by the person who owns them.

There are some mentions in the article about Ms Tippett’s ‘new man’. Indeed the Metro says that ‘Mrs Tippett is now thought to live with a man who is 11 years her junior, and claims that she needs the money to buy a house in Llanharan, South Wales.’
The court will take into account any intention either party has to cohabit or remarry when it considers what she needs to live on. But courts do not treat cohabiting relationships as being as secure as married relationships. Ms Tippett therefore needs money for herself and cannot rely on her new partner in case they split up. Moreover, the Supreme Court stated in Miller/McFarlane that

‘In the search for a fair outcome it is pertinent to have in mind that fairness generates obligations as well as rights.  The financial provision made on divorce by one party for the other, still typically the wife, is not in the nature of largesse.  It is not a case of “taking away” from one party and “giving” to the other property which “belongs” to the former.  The claimant is not a supplicant.  Each party to a marriage is entitled to a fair share of the available property.  The search is always for what are the requirements of fairness in the particular case.’

This means that Ms Tippett is entitled to share in the matrimonial assets at the end of the divorce, and may also be entitled to share in the non-matrimonial assets too.

 

So what are matrimonial and non-matrimonial assets?

There’s a bit of uncertainty about this because the judges in the Supreme Court in two joined cases, Miller v Miller and McFarlane v McFarlane, disagreed slightly about this.

• The matrimonial home is normally a matrimonial asset.
• Lord Nicholls defined non-matrimonial property as that which the parties ‘bring with them into the marriage or acquire by inheritance or gift during the marriage’.
• Lady Hale thought that ‘in a matrimonial property regime which still starts with the premise of separate property, there is still some scope for one party to acquire and retain separate property which is not automatically to be shared equally between them’. This phrase was used in the recent case of Sharp v Sharp, which I reported on here.

 

Are damages matrimonial or non-matrimonial assets?

They can be both. Some parts of damages are compensation for example for loss of earnings for personal injury, and this affects the whole family and can make that part of the compensation a matrimonial asset. Some might be compensation for loss of pension and again the value of a pension is a marital asset. In Mr Kerslake’s case, we don’t know how the damages were calculated by the Criminal Injuries Compensation Scheme, or whether Mr Kerslake’s earnings were affected in adulthood by the trauma of his abuse. It could be that all of Mr Kerslake’s award was for his emotional distress. If so, then there is a strong moral argument that, as Ms Tippett did not suffer any abuse, she should not get any of the compensation for that. That part of the damages is likely to be a non-matrimonial asset.

 

But the Mail and the other papers report that Ms Tippett argued that the compensation was a matrimonial asset….

This could be a misunderstanding, and she actually argued that it was non-matrimonial but required to meet her and the children’s needs.

If it’s true that she argued it was a matrimonial asset, this could be because it came in during the time in which she and Mr Kerslake were married, or because part of it is not for emotional distress but for loss of earnings, for example.

However, whether or not it is matrimonial, if it is needed it will be used.

 

Using non-matrimonial assets

Even if Mr Kerslake’s compensation is non-matrimonial, if it’s needed to ensure each party and the children are housed and have enough to live on, then it will be used. In some cases the matrimonial assets are not enough to provide for the family now they are in two households and in such cases the court will look to any non-matrimonial assets and use those to meet needs too. Ms Tippett is described as ‘working part-time in a church breakfast club’, and therefore probably has little to no earnings that would enable her to get a mortgage. Therefore a lump sum is possibly her only hope of rehousing herself securely.

In this case, there are four children. Two of these children live with Ms Tippett (the others seem to be adults). The court has to give ‘first consideration’ to their welfare (unlike children applications where they are the paramount consideration) while they are minors. In practice, the court’s priority is to ensure that Ms Tippett and the minor children are properly housed. While the court doesn’t have to give ‘first consideration’ to the needs of an adult child, many district judges do understand that children don’t come financially independent when they hit 18 and can continue to be a call on their parents’ finances.

 

But the money was in trust

The papers report that Mr Kerslake placed the money ‘into a trust that will be donated to a charity when he dies.’

Even if the trust has been properly and legally set up, the court can look at who the trustees and beneficiaries are and whether the trust is in fact a disguise for assets that can be used by someone when they want, or whether the trustees have a history of paying out trust money whenever requested by a party. Here, we don’t know anything about the trust except that it has not yet been donated to a charity or used. It could therefore be that the court felt Mr Kerslake had full use of the trust money if he wanted it. This, however, is speculation because the articles don’t tell us much.

 

The Metro says the wife is ‘set to make legal history if the courts rule in her favour’. Is dividing damages compensation on divorce a new development?

No. There are several reported cases where one party has received part of the damages awarded to another party, such as Wagstaff v Wagstaff [1992] 1 WLR 320 and M v M [2011] EWCA Civ 1056. I’ve dealt with several similar cases myself (compensation for the death of a loved one in a high profile disaster and damages for mental and physical injury at work). It is not uncommon.

It is possible that the legal history is that damages in trust are counted as matrimonial, but it’s already the case that damages can be counted as matrimonial and already the case that trusts can be counted as matrimonial.

 

Why is it in the papers?

Mr Kerslake has waived his right to anonymity as a victim of a sex crime and has given at least one interview and posed for some pictures.

The Mail Online reports that ‘The case can be reported after a legal battle by the Daily Mail, which was banned from the hearing despite new rules allowing accredited journalists into all levels of family courts…. The judge barred the press from the court, claiming the publicity was not in the interests of the couple’s children, who could read reports of the proceedings on the internet.’

The media are allowed to be in most hearings about finances on divorce, except one called a financial dispute resolution hearing. However, Family Procedure Rule 27.11(3)(a) says that they can be excluded from some or all of the proceedings if it is necessary:

• in the interests of any child concerned in, or connected with, the proceedings;
• for the safety or protection of a party, a witness in the proceedings, or a person connected with such a party or witness; or
• for the orderly conduct of the proceedings.

In deciding whether it is necessary to exclude the media, the judge will consider the competing rights of the wife and the children to privacy against the right of Mr Kerslake to tell his story (his freedom of expression). Where something less than exclusion would protect the children this should be used instead. In this case, the judge seems to have thought that the interests of the children made it necessary to exclude the media (You can read more about this in the Transparency Project’s newly updated guidance on this here).

 

On the one hand, we as the public have an interest in knowing how our courts operate and transparency helps people to understand how the legal system works. That’s what the Transparency Project is about. On the other hand, the lack of a reporting restriction order means that rather than just know about a case where the parties are anonymised, we know all the detail including what the parties look like from the pictures in the article, and even what Ms Tippett’s new partner looks like. Such detail isn’t and wasn’t necessary to report what was important about the case.

In reality, most journalists are not that interested in what goes on in the local courts, and the more important courts get reported more often. It is therefore very unlikely that you will go to your local court and have a journalist wanting to sit in on your financial case.

Even if journalists sit in a case, they are not always allowed to identify the parties or their children or give the kind of detail that would allow them to be identified. Here, there seems to be no reporting restriction order in place that prevents the media from reporting the case and naming everyone involved.

Feature Pic courtesy of Aaron Shumaker on Flickr – thanks! (Creative commons licence)