Career Sacrifice and Compensation

The recently reported case of RC v JC has generated discussion concerning the concept of “compensation” for career sacrifice within matrimonial finance cases.

The Wife and Mother in this particular case, was held to have sacrificed her promising career as a solicitor, to assume the role of primary carer of the parties 2 children.

The Husband and Father was an equity partner within the litigation department of a magic circle law firm.  The parties commenced their relationship in 2002/2003. Initially the parties worked together, until the Wife ultimately moved to work in-house for a bank in 2007 - the same year the parties became engaged. They married in May 2008. After the birth of their children in 2010 and 2012, the Wife was unable to work part-time within the legal department of the bank and so worked as such within a business team, until she was later made redundant. The Wife last worked in 2016.

In this case, the Wife was not only awarded an equal share of the matrimonial assets amounting to almost £10 million but an additional £400,000.00 to reflect “relationship generated disadvantage”. Essentially this concept reflects one party sacrificing their career and future earning potential (usually to care for the children of the family), leaving the other party open to further their prospects.

Mr Justice Moor found that the husband’s career had clearly taken priority, but stressed that such cases, in which a compensation element can be found, are “the exception rather than the rule”. In many cases it will not be possible to make the findings of fact which make such awards possible, and the assets will often be such that any relationship generated loss is covered by a sharing claim.

To have any chance at succeeding in a claim for compensation for relationship generated disadvantage, it will be important for there to be contemporaneous documentary evidence demonstrating that the party seeking compensation has proven career progression, with rosy prospects and high levels of remuneration predicted. Additionally, there must be sufficient assets from which compensation may be discharged, over and above satisfying a sharing claim and from which needs must be met.

Mr Justice Moor made it clear that “In other cases, the assets / income will be insufficient to justify such a claim in the first place. It follows that litigants should think long and hard before launching a claim for relationship generated disadvantage and they should not take this judgement as any sort of “green light” to do so unless the circumstances are truly exceptional”.

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