Fairness (Not Just Formula) – Navigating The Factors In s.25 MCA 1973

This article provides an overview about the factors that the court takes into consideration when deciding what is a fair division of martial assets. The general approach and starting point when the court considers the s.25 factors is a two-stage process. Firstly, computing the resources available and secondly the distribution of those resources (Charman v Charman (No4) [2007] EWCA Civ 503).

What does the court take into consideration?

The first consideration of the court under s.25(1) MCA 1973 is the welfare of a minor who has not attained the age of eighteen. This is to ensure that the needs of dependent children are met and they are not disadvantaged because of the breakdown of a marriage.

In exercising its powers to make financial orders, the court is required to have regard to the matters set out in section 25(2) of the Matrimonial Causes Act 1973;

1. the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future
2. the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
3. the standard of living enjoyed by the family before the breakdown of the marriage;
4. the age of each party to the marriage and the duration of the marriage;
5. any physical or mental disability of either of the parties to the marriage;
6. the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family;
7. the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it;

The courts approach aims to achieve fairness and equality usually in relation to the assets accrued during the marriage (White v White [2001] 1 AC 596). In Miller v Miller, McFarlane v McFarlane [2006] UKHL 24 there were three strands to achieve fairness in divorce which were: needs, compensation and sharing.

Breakdown of s.25(2) factors –

Taking each factor in turn the below expands on the case law that provides interpretation of the factors set out within s.25(2) MCA 1973. There is no hierarchy and each case turns on its own facts. Therefore, different factors carry different weight depending on the circumstances.

• Income, future earning capacity and property/other resources

The court looks at current income of the parties and considers the projected income of the parties. The court looks at providing compensation to the party who may have taken a career break or taken time away from work for childcare purposes. It will also consider the parties earning capacity and steps they are reasonably required to take to become financially independent. This may include utilising any qualifications to increase earning capacity and considering opportunities for career development.

In SS v NS [2014] EWHC 4183 it was established that there was no automatic right to spousal maintenance. The parties are expected to become financially independent and this is includes seeking employment (Wright v Wright [2015] EWCA Civ 201). It provided that maintenance cannot be extended on the basis that a party refuses to seek employment. Further in Mills v Mills [2018] UKSC 38 it was set out that if a spouse mismanages their finances, they cannot expect the ex-spouse to compensate for this.

The property that the parties may be required to divide is widely interpreted and includes; real property, chattel, financial stocks, beneficial interests and can be inclusive of business assets dependent on the facts.

• Needs – reasonable financial needs housing/income

This factor requires the court to consider how each spouse can reasonably have their needs met. Often the primary consideration for spouses who divorce is to ensure their housing needs are met. The court will aim for both parties to have reasonable financial means from the division of assets to ensure the parties are adequately housed.

The parties may also need to consider the division of the former matrimonial home. If the former matrimonial home is mortgaged the court will evaluate if this needs to be sold and equity to be divided or consider if a lump sum can be transferred (buying out) or transfer the home without a lump sum (situation where there are no other resources to be divided).

In meeting the parties housing needs they must be in line with what is considered a realistic option but not always to the standard that was obtained during the marriage (Miller v Miller; McFarlane v McFarlane [2006] UKHL 24).

The court will assess the parties borrowing capacity. In doing so it will weigh up what achieves the fairest outcome for both parties. As there may be discrepancy between parties’ income and therefore the court needs to balance and distribute the assets between the parties to achieve a fair outcome.

• Standard of living

The court will consider the standard of living enjoyed by the parties prior the breakdown of the marriage. The court is aiming for the parties to be independent of one another financially. The previous standard of living is considered but does not create an automatic entitlement to maintain the same level of lifestyle indefinitely. The court will consider the resources that each party has available. It is likely that in shorter marriages this may result in lower awards due to the standard of living not being experienced over a long period of time by the spouse (Miller v Miller; McFarlane v McFarlane [2006] UKHL 24).

If a party has experienced a high standard of living but if their means are unable to sustain that level of lifestyle this does not give the spouse rise to an unlimited claim (BD v FD [2016] EWHC 594 (Fam)). The court will take the approach that the financial awards should be reasonable and proportionate.  In JB v RB [2025] EWFC 194 the court set out that the parties claims for income requirements were unrealistic and the parties needed to acknowledge that their lifestyles moving forward would be reduced.

• Age of the party & duration of the marriage

The length of the marriage is considered by the court. The longer the marriage the increased likelihood that the parties’ assets are increasingly intertwined. In shorter marriages (under 5 years) the courts focus is on needs when dividing the assets. In medium marriages (5-15 years) the court will adjust sharing the assets based on a combination of contribution and needs. The longer marriages (15+ years) focus more on the starting point of equal division.

In addition, the younger spouses are expected to rebuild their lives and finances whereas older spouses are more likely to receive longer-term security upon division of the assets. It was set out in Sharp v Sharp [2017] EWCA Civ 408that a short marriage with no children and separate finances may lead to an unequal division. In addition, older spouses with limited working years remaining may receive a higher award. This is in line with projected earning capacity, ability to increase savings and pension contributions that can be made based on limited working years.

• Physical or mental disability

The court will consider the implications of a physical or mental disability and how these impacts on financial needs, earning capacity, future resources and needs such as adaptations to property or care required.

If either party has a chronic illness and/or long-term needs this may mean that there is ongoing maintenance provided as the condition may limit or prevent one of the spouses from working. The court departed from a clean break for long-term financial security for one of the spouses as a result of a chronic illness (Vaughan v Vaughan [2010] EWCA Civ 349).

In Wagstaff v Wagstaff [1992] 1 FLR 333 the court considered disability and housing needs. In this case the court took into account that a spouse required special housing adaptations. The court prioritised the need for the spouse with disabilities requirement for suitable accommodation and was awarded an increased share of the matrimonial home. The court confirmed in TA v SB [2025] EWFC 61 (B) that in cases where serious disability is an issue that each case if fact dependent and is one aspect the court will take into consideration.

The court also determined that a mental disability was treated equally to a physical disability and that the W’s severe mental health issues prevented her from being able to engage in employment G v G [2002] EWHC 1339 (Fam).

There may also be the need for expert evidence when enhanced needs are claimed (WG v HG [2018] EWFC 84). This may be required when this is for a short period of time e.g. for nursing care or specific adaptations or equipment to a property.

• Contribution each party has made

The court will look at each parties income, assets, contributions to the home, childcare and career sacrifices. The court accounts for both financial and non-financial contributions equally. It was determined to be unacceptable to place greater value on a spouse contributing financially compared to that of the homemaker as a justification to divide the assets unequally (Lambert v Lambert [2002] EWCA Civ 1685).

The court considers short marriages and special contributions. In short marriages the court may give increased weight to financial contribution. In addition, special contributions may give rise to an unequal split e.g. exceptional business success (Miller v Miller; McFarlane v McFarlane [2006] UKHL 24).

• Conduct

The court will look at the conduct of each party and considers if it would be inequitable to disregard it. The general rule is that the court will not make an order requiring one party to pay the costs of another party (FPR 28.3(5)). However, it will depart from the general rule if it considers appropriate to do so on the basis of one party’s conduct before or during proceedings (FPR 28.3(6)/(7)).

In OG v AG [2020] EWFC 52 Moyston J set out four scenarios where conduct is considered relevant:

1. Gross and obvious personal misconduct
2. The add-back jurisprudence (financial misconduct)
3. Litigation misconduct
4. The evidential technique of drawing adverse inferences

However conduct is often not relevant in financial remedy proceedings and the threshold is high. In the majority of cases for the court to achieve fairness it will not be required that the conduct of the parties is brought into question.

Key things to know:

• Consider the courts will take a fair approach to try and ensure both parties reasonable needs are met
• The standard of living is relevant but not decisive
• The age of the parties and duration of the marriage can influence how assets are shared
• The court will account for physical or mental disabilities and the needs that may arise from this.
• The court considers the contribution each party has made towards the marriage which can be financial or non-financial.
• Conduct is taken into account in exceptional cases.