Can compensation for personal injury be ignored in a financial settlement on divorce?

19 November 2012

The facts of the Mansfield v. Mansfield case were that before the marriage the husband had received Personal Injury compensation, of approximately £500,000.00. He used his compensation monies to purchase two properties, a bungalow known as The Orchards which later became the marital home and which was adapted to meet his disabilities and also the purchase of an investment flat. The wife brought a sum of £30,000 to the marriage. Following the purchase of the properties the parties were married in 2003 and the couple had twins. After five years of marriage the couple separated. The wife and the children moved into rented accommodation. During the Court hearing to determine how the parties assets should be split following their divorce, the Judge decided to award the wife a lump sum of £285,000. If that sum was not paid within three months, the marital home was to be sold. The husband was unhappy and appealed the decision. Lord Justice Thorpe gave the leading Judgment. He confirmed that it was an accepted principle of Law that personal injury damages were not "sacrosanct" and therefore could be taken into account by the Court in deciding how the parties property and assets should be divided on divorce. The Appeal Court commented that whilst an award of £285,000 "may be on the high side" the court would not interfere with the decision made by the Judge who heard the case in the first instance. However, the Court did consider that "the origin of the family capital and the special purposes for which it was provided" should have been reflected in the original Judge's decision. The Appeal Judge therefore decided to impose what is known as a Mesher Order. This meant that the husband would have a Legal Charge over the property which the wife was to purchase as a home for herself and the twins and the husband would be entitled to one third of the equity once the twins had finished full time education. This case demonstrates that in cases where the available resources are modest, the Courts first responsibility is to ensure that the reasonable needs of the parties and of any dependent children in particular, are met irrespective of the contributions made by the parties. Joanna Moore, a Partner in the Family Team at Gepp & Sons commented "these can be difficult cases. It seems likely that the husband would have to sell the property, which was specially adapted to meet his needs in order to provide a home for the wife and the children. This would clearly cause him some hardship now. Equally it would not be right for the wife and children to remain in rented accommodation when they have a need for a secure roof over their heads. The wife is likely to face hardship in the future when she will have to return a third of the equity in the house to her former husband. Inevitably she may have to sell her home, at a time she had grown older herself and have to downsize her own accommodation needs". If you would like any advice relating to Divorce and financial settlements please telephone 01245 228126 for a free consultation with a member of the Family Law Team. The above is not legal advice; it is intended to provide information of general interest about current legal issues.