Is It Time for the Conclusions in Waggott to Be Reconsidered?

On 26 October 2000 – more than a quarter of a century ago – Lord Nicholls said in White v White [2000] 2 FLR 981 at p.990:

‘Today there is greater awareness of the value of non-financial contributions to the welfare of the family. There is greater awareness of the extent to which one spouse’s business success, achieved by much sustained hard work over many years, may have been made possible or enhanced by the family contribution of the other spouse, a contribution which also required much sustained hard work over many years. There is increased recognition that, by being at home and having and looking after young children, a wife may lose for ever the opportunity to acquire and develop her own money-earning qualifications and skills.’

And at p.992:

‘The statutory provisions lend no support to the idea that a claimant’s financial needs, even interpreted generously and called reasonable requirements, are to be regarded as determinative … I can see nothing, either in the statutory provisions or in the underlying objective of securing fair financial arrangements, to lead me to suppose that the available assets of the respondent become immaterial once the claimant wife’s financial needs are satisfied. Why ever should they? If a husband and wife by their joint efforts over many years, his directly in his business and hers indirectly at home, have built up a valuable business from scratch, why should the claimant wife be confined to the court’s assessment of her reasonable requirements, and the husband left with a much larger share?’

Almost 18 years later – on 7 April 2018 – the Court of Appeal gave judgment in Waggott v Waggott [2018] 2 FLR 406. At [1] Moylan LJ phrased the first of the two issues for decision in the following way:

‘(i) Is an earning capacity capable of being a matrimonial asset to which the sharing principle applies and in the product of which, as a result, an applicant spouse has a continuing entitlement to share?’

The wife’s case was that the husband’s earning capacity was a matrimonial asset in which the wife is entitled to share as with any other such asset: it was built up during the marriage and was, therefore, the product of marital endeavour. Accordingly, post-separation income received by the husband from the deployment of this earning capacity should be shared as being referable to or the product of marital endeavour. On the husband’s behalf it was argued that an earning capacity was not an asset to which the sharing principle applied.

It is of course well-known that the Court of Appeal preferred the husband’s case to that of the wife for the reasons summarised by Moylan LJ at paragraphs [121]–[128] of the judgment.

As Moylan LJ observed at [49], this aspect of the wife’s case was constructed significantly on one sentence in Baroness Hale of Richmond’s speech in Miller v Miller/McFarlane v McFarlane [2006] 1 FLR 1186 namely at [154] where she said:

‘She is also entitled to a share in the very large surplus, on the principles both of sharing the fruits of the matrimonial partnership and of compensation …’

He accepted that:

‘It is clear that this is a reference to surplus income and is relied on by Mr Turner for this reason. This is, he submits, awarding the wife no more than a share of her earned entitlement, namely a share of what she has helped create or develop during the course of the marriage.’

Moylan LJ thereafter contextualised Baroness Hale’s comment at [79]–[81] inclusive and then referred to subsequent case law (including Charman v Charman (No 4) [2007] 1 FLR 1246 and Jones v Jones [2011] 1 FLR 1723), the latter of which – and in particular the judgment of Wilson LJ (as he then was) at [27] – was said at [89]:

‘to provide a clear answer to … Mr Turner’s … submission that an earning capacity is to be treated as an asset to which the sharing principle applies.’

As part of his conclusions, Moylan LJ stated at [127] that:

‘I also consider that the passage, relied on by Mr Turner from Baroness Hale’s speech in Miller (at para [154]), cannot bear the weight he seeks to put on it …’

However, can this judgment be reconciled with those aspects of Lord Nicholls’ judgment in White quoted above?

It is of note that there are relatively few references to White in Waggott the first being:

‘[69] The first, over-arching, principle is that the court must exercise its discretionary powers in a manner which is not discriminatory. As Lord Nicholls said in White v White [2001] 1 AC 596, [2000] 3 WLR 1571, [2000] 2 FLR 981, at 605B/C, 1578 and 989, respectively:

“In seeking to achieve a fair outcome, there is no place for discrimination between husband and wife and their respective roles”’

There was another brief reference three paragraphs thereafter:

‘[72] I start by referring briefly to White, in which the “yardstick of equality” was developed as a “general guide”. In particular, it is relevant to note that the yardstick was to be applied to the division of the parties’ “available assets”: Lord Nicholls of Birkenhead at 605F/G.’

However, none of the paragraphs cited at the outset of this article are referred to.

An analysis such as this is more than simply of academic interest.

In its response to the government’s recent consultation, A Fairer End to Relationships, which closed on 14 August 2026, Rights of Women’s answer to the Government’s first question – ‘Do you agree with the Government’s view that the objective for the sharing principle is to give equal benefit to the parties of matrimonial property by dividing matrimonial assets equally?’ was ‘No’. Part of the reasons for this answer was as follows:

‘… equal division of assets should not be conflated with equal benefit or equal outcomes.
 
… During the relationship, one partner may have reduced or given up their own career opportunities in order to care for children or support the other partner’s career, enabling that partner to develop a significantly greater earning capacity. … Although the assets have been divided equally, the parties’ post-separation economic positions are likely to diverge significantly. The higher earning partner continues to benefit from the earning capacity developed during the relationship, while the other may experience long-term economic disadvantage. Equal division of existing assets does not necessarily result in equal benefit from the economic partnership of the relationship.’

It is widely recognised that coercive and controlling relationships often involve one party isolating the other which can include obstructing their ability to work and achieve financial independence. This behaviour is frequently intended to create a position of dependency, leaving the victim reliant upon the perpetrator for financial support which exacerbates the disparity in future earning capacity.

Rights of Women continued their answer as follows:

‘Even where domestic abuse is not present, women are more likely to experience relationship-generated economic disparity such as reductions in earning capacity, reduced career prospects and future pension disparity as a result of joint decision making during the marriage including the woman taking on more caring responsibilities.’

The FLBA response to the Government’s consultation also treats (at paragraphs 56–57) relationship-generated disadvantage as a reason why equal capital may not address an unequal future giving the following as an example:

‘[57] For example: The parties trained as accountants together and both worked at the same firm for 12 years. They both make partner aged 35 and are each earning good incomes. Their career paths are identical. The wife falls pregnant and they agree that she will leave her career to be primary carer for the children. Another 15 years passes and they separate. The parties are now both 50 years old. The husband has been able to carry on with his career and now earns £1m a year. He has another 17 years left in his career, earning at that level, with the ability to accrue significant further capital during the remainder of his career. The wife has no income at all and it is now too late for her to return to her previous career. She remains primary carer to their three children, who are all aged 15 and under. Given the extent to which the husband will continue to accrue capital from his income – and the wife will not – as a result of the choices made in the marriage, is it fair to share their current assets equally and just meet the wife’s needs, or should the wife have more than 50% of the matrimonial assets or provision that exceeds her needs in order to compensate her for the disadvantage she has suffered and the ‘exit disparity’ it has caused?’

No-one will dispute that fairness remains the court’s overriding objective when it comes to the division of a couple’s assets at the end of their relationship.

However, fairness is not simply a question of a division (equal or otherwise) of the parties’ property and capital at the end of their relationship. It also requires consideration about how the relationship shaped each party’s financial future. After all, a consideration of ‘earning capacity’ is one of the MCA 1973 s 25(2) considerations. An apparently equal division – giving both parties (in the words of Baroness Hale of Richmond in Miller/McFarlane at [144] ‘an equal start on the road to independent living’ – **may result in a very unequal future. This is particularly likely where one party’s earning capacity has been diminished by domestic abuse but also where responsibilities which were voluntarily assumed during the marriage continue after separation.

There is arguably a far greater understanding now than there was even as recently as 2018 of (in the words of Peel J in N v J [2025] 1 FLR 571 at [2]) ‘vile and indefensible’ domestic abuse and the wide-reaching and long-lasting impact that it can have. Does this – and the far earlier words of Lord Nicholls in White – mean that it is time for the Court of Appeal to reconsider the conclusions it reached in Waggott?