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BROKEN FAMILIES
27 November 2009 / Hannah Bunker , Fiona Bethel
Issue: 7395 Categories: Features , Family ,Ancillary relief

Fiona Bethel & Hannah Bunker consider the treatment of compensation in ancillary relief
In Daubney v Daubney [1976] FAM 267, the husband (H) and wife (W) had each sustained
injuries in a serious road traffic accident (RTA) in 1964 and awarded damages of £4,000 and
£3,625 respectively.
H invested his compensation in a “reasonable” business venture which ultimately failed losing
all of the £4,000. W faired better, investing her damages in a flat which accumulated equity of
£7,800 at the time of hearing.
The marriage broke down in 1967. H submitted that the flat should be taken into account and
that he should retain the former matrimonial home with equity of £8,000.
W argued her flat should be excluded as it was the product of her damages. It was held at first
instance that the matrimonial home should be transferred to H with a 30% charge to W and that
the value of the flat should be excluded from the matrimonial pot as it was not a family asset.
On appeal, (H arguing he should retain the house outright and W cross appealing in favour of a
greater award) the Court of Appeal unanimously held that W’s award of damages should not be
left out of account. The court decreased W’s share in the former matrimonial home from 30% to
15%, recognising that this still left W with more capital but feeling that overall a distribution close
to equality would be achieved.
The court also made a nominal maintenance order following a concession by H that if W’s
circumstances were to change, she could apply for substantive periodical payments.
Leading authority
Wagstaff v Wagstaff [1992] 1 FLR 333 provides the leading authority. In 1981, H was involved in
a road traffic accident rendering him paraplegic. The parties judicially separated in 1983 and the
wife remained in rented council accommodation which in 1985 she purchased at discount.
In 1988 H was awarded £418,000 in damages, following which W applied for a lump sum order.
The husband invested his compensation by purchasing a specially adapted house, investing in
a health club business (which subsequently proved to be unprofitable) and placing the balance
in various trust assets to provide an income.
At the time of trial the capital stood at £291,000 but no criticism was levied at H for this
reduction. H was ordered to pay W a lump sum of £32,000 with a clean break. He appealed. H’s
disability was considered to be the court’s paramount consideration, and as W had no apparent
immediate financial needs, she was not entitled to any lump sum award. W appealed seeking a
lump sum of £64,000.
The Court of Appeal held that H’s personal injury damages were a financial asset that the court
had to consider. It also held that having regard to all the circumstances, including the reason
why H had the benefit of the capital and its amount, there was a disparity in the parties’ financial
positions, even allowing for H’s disabilities.
W was entitled to some capital to redress that disparity otherwise she would suffer a complete
lack of financial security. She had been left to support herself and their child, had no secure
housing, and the court felt that H could afford to make the payment without adversely affecting
his life.
The court held that while it was impossible to undertake a precise calculation to assess the
correctness of the lump sum payable, £32,000 was fair in the circumstances
There followed what might be considered a rather harsh decision in C v C (Financial Provision:
Personal Damages) [1995] 2 FLR 171. H, W and their daughter sustained personal injuries in
an RTA in 1984. H’s catastrophic injuries left him with permanent disability and brain damage.
The daughter’s pre-accident health meant that she required the full-time care of her mother. The
marriage deteriorated and they divorced in 1989.
In 1991 in the personal injury action H received damages in excess of £5m, by way of a
structured settlement. He received an initial payment with annual payments for life thereafter
subject to a life expectancy of 40 years. W resurrected her application for ancillary relief,
claiming she had no substantial assets and very limited earning capacity in view of the
daughter’s dependency.
She sought a lump sum of £31,000 and periodical payments of £13,000 per annum for both
herself and their daughter. At first instance, W’s claim was dismissed and an order made
preventing her from making an application under the Inheritance (Provision for Family and
Dependants) Act 1975. She appealed, seeking a lump sum of £2,500, imposition of a nominal
maintenance order and preservation of her Inheritance Act claims.
The Court of Appeal confirmed the principle that personal injury damages were to be taken
account of. However, given H’s extreme needs, it held that there was no available capital which
could be transferred to W and the inequality in their capital positions was justifiable.
The court also considered that each had a secure home suitable for their reasonable needs. W
had some debt, but was being assisted by Citizens Advice in a debt repayment programme. The
court took note of the £60,000 damages which W had received for herself and as an interim
payment for the husband paid to her erroneously by H’s former solicitors.
The court felt that W’s account of how she had spent the payment did not inspire confidence in
her ability to manage money.
The court refused to make a substantive maintenance order owing to the impact on W’s
eligibility for state benefits as against the negative impact on H and refused a nominal order, as
there would be “no even remotely likely future event which would make it appropriate for the
husband to make substantive provision for the wife”. Likewise, the court upheld Inheritance Act
1975 dismissal.
Losses arising from relationship breakdown following personal injury
A claimant’s injuries may impact upon their relationship with their partner, sometimes with the
consequence of irretrievable relationship breakdown. If divorce follows, the claimant may suffer
additional losses, both pecuniary and non-pecuniary, for example, the costs of the divorce
litigation, the burden of any financial order, the loss of the benefit of the marriage as well as the
distress of relationship breakdown.
In the case of Jones v Jones [1985] QB 704, the defendant conceded that the claimant’s
marriage had broken down due to the claimant’s personality change, a direct result of an
accident. It was acknowledged by Stocker J that the claimant would have a claim for financial
losses arising from the divorce but, as those proceedings had not been concluded at the time of
the hearing, he refused to speculate as to the degree of such losses and made no order in that
regard.
When the divorce was finalised, the claimant appealed against that decision, and sought to
recover the lump sum of £25,000 which he had been ordered to pay to the wife in respect of
accommodation, and also a proportion of the periodical payments he had been ordered to pay,
arguing that it was more expensive to fund two households than one.
The Court of Appeal refused to make an award for damages in respect of the periodical
payments on the grounds that there were too many imponderables, but allowed the claimant to
recover an amount in respect of the lump sum he was ordered to pay.
The principle established in Jones was not considered to be binding on the court in the factually
similar case of Pritchard v J H Cobden Ltd [1988] FAM 22.
The claimant sustained brain damage in an accident caused by the defendant’s negligence, and
this consequentially led to the claimant’s personality change and the subsequent breakdown of
his marriage.
The claimant sought to recover damages for the financial loss incurred by the divorce.
The personal injury action and W’s application for ancillary relief were tried simultaneously. In
the matrimonial proceedings, Swinton Thomas J awarded W a lump sum and further awarded
her a two thirds share in the former matrimonial home, also requiring H to vacate the property
and move into alternative accommodation. Consequently, in the personal injury litigation,
Swinton Thomas J awarded the claimant damages in respect of his loss arising out of the
divorce, ie damages to reflect his reduced share in the former matrimonial home and the costs
to be incurred in purchasing, moving to and running a new property.
The claimant also recovered the costs of the divorce and ancillary relief proceedings.
The Court of Appeal allowed the defendant’s appeal. It held that despite the fact that the
marriage breakdown was in effect due to the defendant’s negligence, the claimant was not
entitled to damages as compensation for the break-up.
In making orders under the Matrimonial Causes Act 1973, the court was simply exercising its
discretion over the parties’ assets and making adjustments to cater for the parties’ needs, and
that adjustment could not be considered as a “loss” incurred by the claimant.
The court also deemed it to be contrary to public policy to bring into personal injury litigation
considerations relevant to matrimonial proceedings. The court also held that, in allowing a
claimant to recover such loses, it would produce “infinite regress”.
The damages awarded for personal injuries would be considered in the matrimonial
proceedings, but if the personal injury award was dependent upon the conclusion of the
matrimonial proceedings, the court argued that circularity would be inevitable. The court would
have to make an attempt at predicting the outcome of the matrimonial proceedings when
coming to a decision as to the quantum of the personal injury award, and this is not satisfactory.
In 1999, The Law Commission published a report (Damages for Personal Injury: Medical,
Nursing and Other Expenses), in which it concluded that the law should not be reformed to
enable a claimant to recover damages, whether pecuniary or non-pecuniary in nature, arising
from a divorce which was a consequence of an actionable personal injury.
It therefore remains that this is the current status of the law.
Fiona Bethel & Hannah Bunker. Kester Cunningham John Solicitors
Issue: 7395 Categories: Features , Family , Ancillary relief

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