What is a Duxbury calculation?
A Duxbury calculation is used to work out an appropriate lump sum for a financially dependent party in the place of periodical payments (spousal maintenance). The calculation produces a lump sum which, if invested to achieve capital growth, could be drawn in equal instalments and would last until the end of the recipient’s life.
Where do they come from?
‘Duxbury calculations’ originate from the case of Duxbury v Duxbury  Fam 62. Mr and Mrs Duxbury were married for 22 years. Upon divorce, they were both keen to settle the finances by way of a ‘clean break’ and it was argued that a lump sum financial settlement was the best way to secure this.
Mr Duxbury was the higher earner and therefore it was intended that Mrs Duxbury receive the lump sum settlement. Mrs Duxbury’s accountant set to work creating a computer programme to calculate how his client could have a lump sum equivalent for the maintenance payments which would last until her death. The lump sum would therefore have to take into account matters like inflation and the recipient’s life expectancy.
Thereafter, the process involved in working out the lump sum took on the case’s namesake and has been referred to as a Duxbury calculation.
What does the Duxbury calculation consider?
The Duxbury calculation attempts to work out a lump sum that will be used throughout the life of the former spouses and could, in theory, be drawn in equal instalments for the rest of their life. If the calculation has been made perfectly then there would be nothing left at the exact time of death. The calculation is inevitably based on a number of assumptions as to life expectancy and rates of inflation.
How do I make a Duxbury calculation?
The Duxbury calculation is made by consulting a ‘Duxbury table’. The Duxbury table has columns along the top setting out the annual net income needs required by the party. The annual net income needs tend to be calculated by putting together an annual budget. To the left, there are columns setting out the recipient’s current age and sex.
In order to work out the requisite lump sum, all you need to do is trace down the income need column to the correct age and sex and the figure you ‘land’ on is the equivalent amount for the lump sum.
Where I can find the Duxbury table?
The Duxbury tables are contained within the Family Law: At a Glance volumes.
Is the Duxbury calculation for me?
The Duxbury method works well where both parties want a ‘clean break’ i.e. they wish to completely terminate all obligations to each other and most importantly, where there are the means to settle the finances by way of lump sum settlement. As attractive as lump sums are, it is simply not possible to settle the finances by way of lump sum if there is insufficient capital. The Duxbury calculations can prove a useful negotiation tool if couples are trying to work out a settlement as they provide a good point of reference for appropriate lump sums.
The courts will consider fairness in all cases and will be live to issues where the Duxbury calculation can achieve too generous an award for a young recipient who enjoyed a short marriage in comparison to an older recipient who enjoyed a long marriage. The court exercises a narrow discretion when considering whether a case should depart from the Duxbury tables when calculating a lump sum award.
Although using the Duxbury table is relatively straightforward, it is worth remembering that no case is the same and there may be circumstances that render a case unsuitable for a Duxbury calculation. In all matters of family law, it is always wise to speak with a lawyer and take advice on the options available to you and the fairness of any potential financial settlement.