Most legal precedent in divorce settlements is found in court judgements that deal with big money cases. There are good reasons for this. Firstly of course, those spouses who take such cases to court must understand that the legal costs have to be paid, so there has to be enough money left after costs to fight over. Secondly, pressure is mounting for dispute resolution to take place outside the courts, sometimes in mediation or in collaborative law processes, and increasingly in arbitration, but also in negotiations either before litigation or at a stage during the litigation when the desire to compromise is greater than the desire for a judge to reach a decision. So there are fewer legal judgements.

The History

Colin Randall and Hilary Randall settled their divorce financial remedies litigation before a final hearing. One of the reasons, as we know from the law report of Randall v Randall [2016] EWCA Civ 494 is that they wanted to avoid a 2 day hearing. They did not have much money to fight about. The main asset was the house, and Mrs Randall was also expecting at some future stage to inherit from her mother. The couple have 3 children, so it was important to make sure of future housing for the children. The compromise gave a way forward. Mrs Randall was to have more in the way of housing and Mr Randall to have less. Because Mrs Randall's mother was likely to leave her daughter some money in her will (but might need her own money for care provision), the couple decided that if Mrs Randall inherited over £100,000, she would give one half of any extra to Mr Randall. So he had some hope of a little more capital in the future.

Mrs Randall's mother died, and left Mrs Randall £100,000 exactly and a further £150,000 to the Randall children. This did not trigger any more money for Mr Randall, unless he could challenge the will. If he could successfully do that, then Mrs Randall would inherit £250,000 of which he would get £75,000.

The Courts

Mr Randall's legal problem was to get the issue before the courts. He was not an executor of the will nor was, he a beneficiary or a creditor of the deceased. He therefore had, on the face of things, no way to challenge the will. Much of the law about this area was decided in the 19th century, and the first judge to consider the issue said Mr Randall could not do anything. But the Court of Appeal disagreed.

The three judges decided that Mr Randall had a sufficient interest in the will to allow him to bring a claim. They did not judge whether he would succeed.

One of the reasons given by the court was that whilst the courts do encourage settlement in the way that Mr and Mrs Randall had achieved in their divorce by using a compromise, they also expect each party to act with integrity. This must be decided by the court.

"Justice in the general sense"

The judges used this expression to give Mr Randall a right to have a full hearing. So this is not a decision that Mrs Randall had done anything wrong. But it does give us confirmation that a way forward exists when there is too little to go round at the time of divorce to reach a full settlement, but there is a prospect of inheritance. That is very often the case with high house prices and high legal costs combining.  

Where you can trust both parties to be honest about financial information, direct negotiation, mediation or other out of court resolutions are often the most cost-effective way that divorce settlements can be achieved. An important factor is also that such settlements are made in private, and final trials are much more commonly being held in open court with the risk of publicity.

Being able to use compromises like this, by way of undertakings from a future beneficiary, helps everybody.