Limitation period for financial claims on divorce?

To many people’s surprise, the financial claims that a couple can make against each other upon divorce remain open even after the divorce is complete. Only a court order or someone’s remarriage or death will prevent them from making a claim for a share of their former spouse’s finances. This means that if the financial claims are not resolved by the court at the time of divorce, there is a possibility of litigation even years after the divorce; a fate that came to Mr Vince when his former spouse, Ms Wyatt pursued her financial claims against him 20 years after they divorced.

Mr Vince and Ms Wyatt married in 1981, separated in 1984 and divorced in 1992 but they did not deal with their financial claims. Following their divorce, Mr Vince pursued a new-age travelling lifestyle and Mrs Wyatt cared for the children, living a very modest lifestyle. Subsequently Mr Vince’s green energy business took off, making him a multi-millionaire, following which Ms Wyatt started court action. Earlier this year the Supreme Court ruled that Ms Wyatt should be allowed to pursue her financial claims against her husband, despite the divorce being over 20 years ago.

This has prompted debate about whether there should be a limitation period after which no such claims can be brought. Many would have sympathy with Mr Vince whose wealth was made years after the divorce. A limitation period would provide certainty and allow both parties to move on with their lives, safe in the knowledge that no claims can be made.

The Supreme Court did not suggest that a limitation period should be introduced but did emphasise the uphill struggle that Mrs Wyatt would have in pursuing her claims. The Judges reiterated that a claim based on ‘need’ would only succeed if it is shown that the need was generated by the relationship. In Mrs Wyatt’s case, they commented that her contribution by raising the children may justify an order for a modest sum to enable her to purchase a property mortgage free. The claim was later settled with Mr Vince paying Ms Wyatt a lump sum of £300,000.

A similar case subsequently came before the High Court, which dismissed the wife’s financial claims completely on the basis that she had not demonstrated that her financial needs had been generated by the marriage, which also ended over 20 years ago. These cases show that whilst litigation may be a possibility, it is risky and not guaranteed to succeed.

Whilst there is no limitation period, for peace of mind, it is always advisable to obtain a court order to deal with financial claims upon divorce, even in cases where there are no or few assets or where a settlement has been reached amicably.