Wife awarded compensation in divorce for relationship-generated disadvantage created by giving up successful career for husband and family

In the recent case of TM v KM [2022] EWFC 155. HHJ Hess awarded the wife an extra £500,000 lump sum to compensate her for the 'relationship-generated disadvantage' she suffered due to giving up a lucrative career in investment finance to care for her family.

The cases where one party successfully argues that they require compensating for a change in lifestyle (for example, giving up a career to have children and support a partner's career over one's own) are rare. In this case, when the parties met, they both worked in investment finance and were earning well. The wife earnt considerable sums working for a US bank, and took a step down in her income due to moving to London (and an English bank) to be with the husband. She was made redundant in 2008 following maternity leave and never worked in finance again. In the meantime, the family moved around the world following the husband's successful banking career, leading to a build-up of assets and a high level of income for him. The judge was satisfied that the wife would have remained a very high earner, had she not moved to England and become pregnant. Her earning capacity at the time of the divorce, aged 50, was considered to be around £50,000 p.a. The judge, HHJ Hess, explained that the wife's devotion to her husband's career and providing childcare resulting in her own financial disadvantage should be reflected in her financial award. She was not able to share in the husband's future income, and so he ordered, as part of the wife's settlement, an exceptionally rare compensation award of £500,000.