The Supreme Court defined the three guiding principles for financial remedy cases: sharing, needs, and compensation. These remain the modern framework applied in all high-value and standard cases alike.
Introduction
Miller v Miller: McFarlane v McFarlane is a conjoined appeal case regarding financial provision offered in circumstances of divorce.
Background to the case
In Miller v Miller, the case involved a short, childless marriage of less than three years. The husband was a highly successful fund manager who had amassed considerable wealth, much of which was generated through his business activities both before and during the marriage. He also had significant pre-marital assets, including £13 million from the sale of the asset management firm where he had worked. Following their separation, the wife sought a substantial financial settlement, arguing that she was entitled to a fair share of the assets accumulated during the marriage. At the time of divorce, the husband’s net assets were approximately £17 million, while the wife’s net position was a debt of around £300,000. The central issue was how fairness should be achieved in a short marriage where the majority of wealth was created by one party’s efforts and pre-existing assets.
In contrast, the McFarlane case concerned a long marriage of sixteen years. The husband was a high-earning accountant and partner in a major firm, while the wife had given up her own career as a solicitor to care for their three children and support her husband’s career. Following the breakdown of the marriage, there was a significant disparity in earning capacity between them. The key issue was whether the wife was entitled to ongoing maintenance not just to meet her financial needs but to compensate her for the career and income she had sacrificed during the marriage.
The House of Lord’s Decision
In Miller v Miller, the House of Lords held that even in a very short marriage, equality is the starting point when dividing assets. However, it was recognised that most of the husband’s wealth was largely non-matrimonial, earned before or during the marriage through his skills and business. . As a result, the wife was awarded £5 million rather than an equal share of all his assets. It was confirmed that it is acceptable to depart from strict equality when fairness requires it, especially in short marriages or when much of the wealth is non-matrimonial.
In McFarlane v McFarlane, the House of Lords ruled that she was entitled to continued financial support to compensate for what she had lost. Although courts usually favour a “clean break” after divorce, the judgment acknowledged that such a principle would be deemed unfair in her case, as it would create injustice or fail to adequately recognise the sacrifices made by one party during the marriage.
Why Miller McFarlane [2006] UKHL 24 matters
The decision in this case is one of the most influential judgments in English family law. It built on the principles from White v White [2001] 1 AC 596 and clarified that fairness, rather than strict equality, should guide the division of assets and financial provision on divorce. Although the cases had different facts, they established three key principles: needs, sharing, and compensation, ensuring that both financial and non-financial contributions to the marriage are recognised.
The judgment also highlighted how outcomes can differ between short and long marriages, allowing adjustments when most wealth is non-matrimonial in short marriages and providing ongoing support in long marriages where one spouse gave up career opportunities. This ruling remains a key part of modern English family law and is widely cited in divorce cases.
Practical Implications for Clients
- The court focused on fairness rather than equality. Financial settlements are assessed based on sharing, needs, and compensation.
- Non-financial contributions, such as caring for children or supporting a spouse’s career, are considered.
- Awards can vary depending on each spouse’s contributions and circumstances.
- Short marriages may get smaller settlements, especially if most wealth is pre-marital, whereas longer marriages may lead to ongoing support to reflect sacrifices made by one spouse.
Practitioner Takeaways
- Assess the source of wealth carefully and consider both financial and non-financial contributions
- Be aware of the length of the marriage as a case can be treated differently depending on this
- Apply the needs, sharing, and compensation framework
- Advise clients on realistic expectations, emphasising that settlements may not be equal and that outcomes depend on the overall assessment of fairness.
By: Hanna Barzinji
04/11/2025