Part 2 – Section 25 of the Matrimonial Causes Act 1973: The Court’s ‘Trump Card’
In Part 1, we explored how the Courts assess the validity of a pre or post nuptial agreement. The Court will have consideration of the free will of the parties, the absence of undue influence, full and frank financial disclosure, and whether the parties sought independent legal advice.
Now part 2 will explain what happens if the couple had done everything right: they sat down and had an open conversation, they had full and frank disclosure, they spoke to Solicitors, the Solicitors gave comprehensive and detailed advice, they signed on the dotted line. Job done, right?
Not quite.
Think of Section 25 of the Matrimonial Causes Act 1973 as the Court’s ‘trump card’ or ‘get out of jail card’. No matter how carefully crafted the pre or post nuptial agreement is, no matter how willingly it was signed, how full and frank the disclosure was, the Court retains an unquestionable discretion to ensure that the outcome is fair. The Court’s jurisdiction is simply never ousted; it is not in the interest of justice. It is always there, quietly in the background as a safety net, something that you can rely on if there is a risk of an unjust outcome.
The Starting Point: Section 25 of the Matrimonial Causes Act 1973.
To start we need to look at Section 25 of the Matrimonial Causes Act 1973: what is it, what does it do, and how does it work. When a marriage breaks down and the parties cannot agree on how to divide their finances, it falls to the Court to decide. The legal framework the Court uses to do so in financial remedy cases is Section 25 of the Matrimonial Causes Act 1973. This piece of legislation has been the cornerstone of financial remedy law in England and Wales for over fifty years, and it remains the starting point in every case.
Section 25 does not tell the Court what answer to reach, it does not prescribe a formula, impose a fixed percentage split, leave one party penniless or guarantee either party a particular outcome (subject to the pre or post nuptial agreement) unlike what you may have seen on Netflix or heard about in rumours.
What it does instead is give the Court a framework, a non-extensive list of factors which must be considered, weighed, and balanced against one another in order to reach a result that is fair in all the circumstances of the particular case. It goes without saying that no two cases are the same, and the weight given to each factor will vary enormously from case to case.
The Court’s overarching objective, as confirmed by the House of Lords in White v White [2001] 1 AC 596, is fairness. What is fairness you may ask? Fairness means avoiding discrimination between the parties based on the roles they played in the marriage. Whether one party was the primary earner and the other the primary carer, both contributions are recognised as equally valuable. The “yardstick of equality” established in White v White [2001] 1 AC 596 means that equal division of matrimonial assets is the starting point, though the Court may and regularly does depart from it where permissible and the facts of the case justify a different outcome.
Above all else, Section 25(1) of the Matrimonial Causes Act 1973 places one consideration as the first, that being the welfare of any dependent child of the family under the age of 18. Before the Court turns its attention to anything else within Section 25 or any pre or post nuptial agreement, it must first satisfy itself that the needs of any dependent child are properly met. This is not a matter of discretion; it is an absolute obligation. Whatever else the Court is asked to determine in financial remedy proceedings, ensuring that children are not left financially disadvantaged is, and always will be, the Court’s primary duty. This will always trump any and all pre or post nuptial agreements, but that does not mean they are worthless as I explain at the end.
How does the Court approach a case with Section 25 in mind?
Stage one
The Court does not dive straight into dividing assets. It takes a structured, two-stage approach: first, it establishes what is actually in the pot. This is a detailed and often complex and debated part of proceedings, where both parties fully disclose any and all assets, accounts, investments, interests and liabilities. This creates a level playing field, and unlike you may see on TV and in films there is no hiding. Everything will be discovered.
The Court then turns to how those resources should be distributed. This framework is set down in Charman v Charman (No.4) [2007] EWCA Civ 503, and it remains the starting point in every financial remedy case today.
Stage two
Once the Court is satisfied that all of the assets, accounts, investments, interests and liabilities are in front of it, the Court will look into the factors as set out in Sections 25(1) and 25(2) of the Matrimonial Causes Act 1973.
As above Section 25(1) of the Matrimonial Causes Act 1973 is the primary and main concern for the Court. This is not merely a box to tick, it is a genuine priority, designed to ensure that the breakdown of a marriage does not leave dependent children financially disadvantaged.
Once Section 25(1) is addressed, the Court turns to the eight factors set out in Section 25(2) Matrimonial Causes Act 1973. No single factor automatically outweighs another, with each case decided on its own facts. The weight given to each factor will shift depending on the circumstances in front of the Court.
These eight factors are:
- The income, earning capacity, property and other financial resources each party has or is likely to have in the foreseeable future,
- The financial needs, obligations and responsibilities each party has or is likely to have in the foreseeable future,
- The standard of living enjoyed by the family before the breakdown of the marriage,
- The age of each party and the length of the marriage,
- Any physical or mental disability of either party,
- The contributions each party has made, or is likely to make, to the welfare of the family to include but not limited to caring for children and looking after the home,
- The conduct of either party, but only where it would be inequitable for the Court to disregard it, and
- The value of any benefit, such as a pension that a party will lose as a result of the divorce.
The overarching aim, as confirmed in White v White [2001] 1 AC 596, is fairness. And in Miller v Miller; McFarlane v McFarlane [2006] UKHL 24, the House of Lords distilled that aim into three district principles: needs, compensation and sharing. These three concepts are the foundation of almost every financial remedy judgment handed down today.
Breaking down the factors
1 – Income, earning capacity and financial resources
The Court does not only look at what the parties earn today, it looks ahead. It considers projected income, earning potential, and what steps each party could reasonably be expected to take to achieve financial independence. One example may be that a party is currently in training for a high-income role, but during training their income is far lower than what they will earn once they finish their training. In addition, the Court can consider retraining, existing qualifications, or returning to the workforce after a career break.
The courts have been clear that financial dependency is not a one-way ticket. In SS v NS [2014] EWHC 4183 the court confirmed there is no automatic entitlement to ongoing spousal maintenance, and in Wright v Wright [2015] EWCA Civ 201 the Court of Appeal went further, holding that maintenance cannot simply be extended on the basis that one party declines to seek work. Pitchford LJ stated at paragraph 25:
“There is a general expectation in these courts that once a child is in year two, most mothers can consider part time work consistent with their obligation to their children. By September 2009/2010 the wife should be able to work. She will be 46 or 47 years old. I do not anticipate her having a significant earning capacity nor would it be reasonable to expect her to muck out stables for the minimum wage. However she should make some financial contribution”
Equally, a party who mismanages their own finances after separation cannot look to their former spouse to cover the shortfall: Mills v Mills [2018] UKSC 38.
2 – Needs
It would only be right to say that the ‘needs’ test is the one that has a real tangible effect on any party going through Matrimonial Causes Act 1973 proceedings, and that this is often where parties have the most anxiety. The Court will ask itself, how can each party be adequately housed and financially supported going forward? This is where Courts have to be brutally honest and pragmatic.
Where the family home is mortgaged, the Court will consider whether it should be sold with the equity divided, or whether one party can buy out the other, or whether a transfer without a lump sum is possible where there are simply no other assets to redistribute. The guiding principle is that housing provision must be realistic, sacrifices often need to be made but it must be adequate. For example, if a couple with no children or dependants are used to living in a 12 bedroom house but the only way both parties can be housed is if that property is sold and they move into much smaller properties, then so be it.
In the case of FF v KF [2017] EWHC 1093 (Fam) the then Mostyn J dismissed an appeal. In his judgment be observed that the concept of “needs” in financial remedy proceedings is not to be understood in its ordinary, literal sense, describing it instead as “a term of art”. He explained that the assessment of a party’s needs is an evaluative exercise falling within the court’s discretion, and that those needs must bear a causal connection to the marriage.
To illustrate the point, Mostyn J referred to a number of well-known financial remedy cases. In McCartney v McCartney [2008] 1 FLR 1508 in which Heather Mills-McCartney was found to “need” approximately £25 million. In Juffali v Juffali [2016] EWHC 1684 (Fam), the wife’s assessed needs amounted to around £62 million, while in AAZ v BBZ [2016] EWHC 3234 (Fam) the applicant wife’s needs were assessed at approximately £224 million. Mostyn J found that in reality no individual requires sums of £25 million, £62 million or £224 million simply to meet their accommodation and living expenses, demonstrating that “needs” in this context reflects a legal concept rather than basic subsistence.
He went on to indicate that, when determining an appropriate award based on needs, the court should exercise its discretion by considering a range of factors, including:
- the extent of the paying party’s wealth,
- the duration of the marriage
- the applicant’s age and state of health, and
- the standard of living enjoyed during the marriage, whilst recognising that this factor should not be determinative.
3 – Standard of living
The lifestyle enjoyed by a couple during the marriage is a relevant consideration, but it does not give either party an unlimited claim to maintain that lifestyle indefinitely. The Court’s aim is for both parties to achieve financial independence from one another, but the reality as per my example above means that sometimes there is a lowering of standards of living.
In shorter marriages, the standard of living may carry less weight simply because it was not enjoyed over a sustained period. In BD v FD [2016] EWHC 594 (Fam) the Court confirmed that an affluent lifestyle during the marriage does not translate into an open-ended entitlement post-divorce.
4 – Age and length of the marriage
Both the age of the parties and the duration of the marriage are also considered. In short marriages of under 5 years, the focus tends to be on meeting needs rather than sharing assets equally. In medium-length marriages of 5 to 15 years, the Court strikes a balance between contribution and needs. In longer marriages of 15 years or more, equal division becomes the natural starting point.
In relation to the age of the parties, younger parties are generally expected to rebuild their financial lives, whereas older spouses such as those with limited working years remaining are not expected to rebuild. In Sharp v Sharp [2017] EWCA Civ 408 the Court confirmed that it is possible to depart from equality without the need for a pre or post nuptial agreement in short marriages with no children, but the usual starting point is that of equality.
5 – Physical or mental disability
Where either party has a physical or mental disability, the Court will consider how that affects their earning capacity, their financial needs, and any specific requirements. This can be things such as adaptations to property or ongoing care costs. A chronic illness may mean that a clean break is simply not appropriate. In Vaughan v Vaughan [2010] EWCA Civ 349 the Court departed from the usual preference for financial finality precisely because one spouse’s long-term condition meant that ongoing provision was the only fair outcome.
The most recent guidance found in TA v SB [2025] EWFC 61 (B), reinforces that serious disability remains a highly fact-specific consideration there is no set formula, but it is a factor the Court will take seriously.
6 – Contributions
Both financial and non-financial contributions are given equal weight. It was firmly established in Lambert v Lambert [2002] EWCA Civ 1685 that it is not acceptable to place greater value on the financial breadwinner’s contribution than on that of the homemaker or primary carer; both are regarded as equally valid contributions to the welfare of the family.
7 – Conduct
Conduct is, in most cases, irrelevant to financial remedy proceedings. The threshold for the Court to take it into account is deliberately high, it must be conduct that it would genuinely be inequitable to disregard.
In OG v AG [2020] EWFC 52, Mostyn J identified four situations in which conduct may legitimately be brought into the frame: gross and obvious personal misconduct; financial misconduct (the so-called “add-back” jurisdiction, where recklessly dissipated assets are notionally added back to the pot); litigation misconduct; and the drawing of adverse inferences from a party’s failure to give proper disclosure.
As for costs, the general rule under FPR r.28.3(5) is that no order is made. But as I set out at the start of this article the Court always retains the power to depart from that rule where it is just and appropriate to do so.
8 – The value of any benefit a party stands to lose
The final factor under Section 25(2) Matrimonial Causes Act 1973 requires the Court to consider the value of any benefit that a party will lose the chance of acquiring as a result of the divorce.
In practice, this most commonly arises in relation to pensions, and it is a factor that is all too easily overlooked, particularly in shorter marriages where the focus tends to fall on immediate housing and income needs. Pensions are often one of the most significant assets in a marriage, with the Court having a range of tools available to it such as a pension sharing order. It is outside the scope of this article to consider the wide issue of pensions on divorce.
Key cases
White v White [2001] 1 AC 596
Before White v White [2001] 1 AC 596, there was often an informal “one-third rule” that wives tended to receive roughly 1/3 of the marital assets, on the basis that giving them more might discourage husbands from working. The House of Lords rightly consigned that approach to the history books. In White v White [2001] 1 AC 596, Lord Nicholls confirmed that the objective of the court is to achieve an outcome which is as fair as possible in all the circumstances of the case, and that there is no place for discrimination between husband and wife based on their respective roles in the marriage. Critically, the Court introduced the “yardstick of equality”, this being the Court’s starting point, from which the Court may depart if there is good reason to do so.
Miller v Miller; McFarlane v McFarlane [2006] UKHL 24
- Miller v Miller; McFarlane v McFarlane [2006] UKHL 24 refined and expanded the principles and approach set down in White v White [2001] 1 AC 596, giving us the three organising principles that underpin almost every financial remedy case today: needs, compensation and sharing.
- Needs is the foundation. In every case, the Court will first ensure that both parties’ reasonable needs are met. These can be for example housing, income, and day-to-day living. As Baroness Hale put it, needs should be met at a level as close as possible to the standard of living enjoyed during the marriage, though that standard cannot be allowed to dominate the exercise in every case.
- Compensation recognises that one party may have made career sacrifices during the marriage, stepping back from work to care for children or support the other’s career. This is clearly something that the Court should address. In practice, compensation arguments are rare and tend to arise only in high-value cases, with the McFarlane case itself being a good example: Mrs McFarlane, a highly qualified solicitor who gave up her career to raise three children, was awarded substantial periodical payments to reflect what she had given up.
- Sharing: this flows from White: both parties are ordinarily entitled to an equal share of the matrimonial assets unless there is good reason to depart from equality.
Standish v Standish [2025] UKSC 26
- The Supreme Court’s recent decision in Standish v Standish [2025] UKSC 26 confirmed and clarified the law on matrimonial and non-matrimonial property. For further reading on this topic, I would refer the reader to the article written by Mr Woolley, for a comprehensive look into the case and its significance: https://www.northampton-chambers.co.uk/2025/07/11/standish-the-sharing-principle-and-matrimonialisation-of-assets/
The end of the story, where do pre or post nuptial agreements fit in?
Here is the critical point that Part 1 was building towards. The existence of a nuptial agreement is not one of the Section 25 factors listed in the statute. There is no sub-paragraph that says, “and the Court must have regard to any nuptial agreement the parties may have signed.” Instead, the agreement can have a significant almost overwhelming impact on the Court, or it may simply just feed into the exercise of the Court’s overall discretion under Section 25 as part of “all the circumstances of the case.”
The Supreme Court in Radmacher v Granatino [2010] UKSC 42 made clear that a valid nuptial agreement, being one freely entered into, with full appreciation of its implications, should be given effect unless it would not be fair to hold the parties to it. But critically, fairness is assessed against the Section 25 framework. The two work together with a nuptial valid agreement carrying significant weight, but the Court always asks whether upholding it produces a fair result when.
In Radmacher v Granatino [2010] UKSC 42, the Supreme Court held that the agreement should be upheld, and Mr Granatino’s claim was significantly reduced as a result. However, and this is key, the Court did not simply rubber-stamp the agreement. It examined whether holding the parties to it was consistent with fairness, with the welfare of the children, and with the Section 25 factors.
Author: Lewis Alexander Colbourne
Lewis can be instructed by emailing his clerks at clerks@northampton-chambers.co.uk or by telephone at 01604 636271.
Disclaimer:
This publication is intended to be a general summary of the relevant law and/ or guidance at the time of writing. It should not replace legal advice tailored to your specific circumstances. No liability is accepted for any omission or error wherein.
References:
White v White [2001] 1 AC 596
Charman v Charman (No.4) [2007] EWCA Civ 503
Miller v Miller; McFarlane v McFarlane [2006] UKHL 24
SS v NS [2014] EWHC 4183
Wright v Wright [2015] EWCA Civ 201
Mills v Mills [2018] UKSC 38
FF v KF [2017] EWHC 1093 (Fam)
McCartney v McCartney [2008] 1 FLR 1508
Juffali v Juffali [2016] EWHC 1684 (Fam)
AAZ v BBZ [2016] EWHC 3234 (Fam)
BD v FD [2016] EWHC 594 (Fam)
Sharp v Sharp [2017] EWCA Civ 408
TA v SB [2025] EWFC 61 (B)
Lambert v Lambert [2002] EWCA Civ 1685
OG v AG [2020] EWFC 52
Standish v Standish [2025] UKSC 26
Radmacher v Granatino [2010] UKSC 42