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The "Meal Ticket" Divorce Ruling
A recent ruling by the High Court may have established a precedent that could lead to the courts taking a less generous approach when dealing with spousal maintenance in divorce settlements.
The ruling was made in the case of Waggott v Waggott. Mrs. Waggott had initially been awarded a settlement of £9.76 million and annual maintenance payments of £175,000 for life in 2012 when she was divorced from Mr. Waggott, the finance director of TUI travel.
Mrs. Waggott subsequently asked the Court to approve an increase in annual maintenance payments of £23,000. Mr. Waggott however challenged the original maintenance award arguing that it meant that Mrs Waggott had “no financial incentive” to return to work. Mrs. Waggott was the former finance controller of UCI cinemas.
Lord Justice Moylan ruled that the £175,000 a year maintenance payment should end in three years’ time rather than continuing “for life”. This would therefore result in a “clean break” for the parties.
In allowing Mr. Waggott’s appeal, Lord Justice Moylan said that Mrs. Waggott would be able to make up the shortfall from the loss of the annual maintenance payments by investing around 10% of the initial payment and living off the interest. Furthermore, if her financial needs were not met, “[she] would be able to obtain employment”.
Whilst it may appear that this case could establish a precedent for the courts taking a more limited approach to maintenance payments, it is important to bear in mind Lord Justice Moylan’s further comments "The expression 'meal ticket for life' can be used as an unfair trope. I, of course, acknowledge that long-term maintenance can be required as part of a fair outcome…But it is plain to me that the wife would be able to adjust without undue hardship to the termination of maintenance.” It would therefore appear that the courts will continue to consider long-term maintenance where appropriate to do so in the interests of fairness but equally, the courts will not ignore the earning potential of the party seeking maintenance when considering whether or not to order a clean break.