We are living in extraordinary times and the Covid-19 pandemic has taken over the news cycle. The pandemic has affected the entire world in various ways, including having a disproportionate effect on the working lives of women. Whilst there are many hands-on fathers who take on the role of main caregiver to children, it still tends to be women who primarily take on the responsibilities of home and family. So, when the kids need to be entertained or home schooled the task typically (but not always) falls to their mother. Her career suffers, but family comes first, right?
This is a recent illustration of an established principle. Women tend to give up their career prospects to care for the children, allowing their husbands the freedom to grow their own careers and thereby financially provide for the family. On family breakdown, however, these decisions are financially devastating. But as Mr Justice Moor’s recent Judgment in the case of RC v JC [2020] EWHC 466 illustrates, in extraordinary circumstances a spouse who has given up a promising career can succeed with a compensation claim for relationship generated disadvantage. This, of course, applies equally to husbands and wives, although it is women who are disproportionally affected.
Successful claims for relationship generated disadvantage are incredibly rare. In RC v JC, however, the Court found that such a claim was justified on the narrow facts before it.
The parties in RC v JC were both solicitors at the same magic circle firm in London. After a promising start to her career, including several stellar appraisals, the wife took a step back to care for the family. Evidence was given to the Court that the husband did not want the wife to remain in the same firm, especially when he was promoted to equity partner. His career took precedence. The wife first took a step to a lesser position with a different employer and then stopped working altogether as part-time work was possible whilst caring for the parties’ children. The husband, uninhibited by childcare obligations, was able to grow his career and at the time of family breakdown earned circa £1 million net per annum.
Mr Justice Moor found that the facts in this specific case supported a claim of relationship generated disadvantage and concluded that the disadvantage will impact the wife’s earning capacity for the rest of her life. The wife’s stellar appraisals at the commencement of her career provided clear evidence of her trajectory to partner, a promotion carrying significant renumeration on par with the husband’s. If she had not married, she would have continued on this trajectory.
In delivering Judgement, Mr Justice Moor was careful to say that his findings in this case are the exception rather than the rule and that in the vast majority of cases an equal division of capital is sufficient to make up for the lost career prospects of one of the parties. He says (at para 72):
“I have already made the point that, in many of these cases, the assets will be such that any loss is already covered by the applicant’s sharing claim. 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 judgment as any sort of “green light” to do so unless the circumstances are truly exceptional.”
In this case, however, the assets were in the region of £10 million and were sufficient to share equally whilst still generously providing for the needs of both parties. This level of wealth made an additional compensation award to the wife possible.
The extraordinary Judgment of RC v JC shows that a claim for relationship generated disadvantage is possible, but clearly the threshold for obtaining such compensation is incredibly high. Sadly, for the vast majority of families the assets are simply insufficient to enable an additional compensation claim.
