Miller v Miller; MacFarlane v MacFarlane

Following the Miller; McFarlane case, the law has evolved from a purely needs-based approach to a more complex framework. It now requires a thorough analysis of the assets available for division, the principles that ensure fairness in dividing those assets, and the handling of any excess income one party may have beyond the family’s needs. 

Miller v Miller: McFarlane v McFarlane [2006] UKHL 24 is a conjoined appeal case addressing financial provisions made during a divorce. 

The case of Miller involved a brief, childless marriage lasting less than three years. The husband ended the marriage and subsequently entered a new relationship. At the time, Mr Miller’s assets were approximately £17 million, whereas Mrs Miller’s assets amounted to £100,000, half of which was in a pension. The Court of Appeal highlighted that the husband’s initiation of the divorce gave Mrs Miller legitimate grounds to expect significant provision in the event of a divorce, awarding her £5 million. Although the House of Lords dismissed this argument as irrelevant, they still upheld the £5 million award. Their reasoning was that, despite the short duration of the marriage, the husband’s wealth had significantly increased during this period, and £5 million represented a fair share of that increase. 

In MacFarlane, both parties had successful careers at the time of their marriage. However, Mrs MacFarlane gave up her career to raise the family’s three children. When the marriage ended after 16 years, the couple could not agree on financial arrangements. They had approximately £3 million in assets, and the husband earned around £1 million per year. The House of Lords ordered annual payments of £250,000 to Mrs MacFarlane to fairly compensate her for the losses incurred during the marriage, particularly her lost earning potential. This decision was grounded in the principle of fairness; applying ’equal sharing’ would have entitled Mrs MacFarlane to only half of the £3 million in assets, while within a few years, the husband would have become significantly wealthier than the wife. 

It is since widely accepted that Miller; MacFarlane established the principle of compensation, where arguments in respect of ‘relationship-generated disadvantage’ were successful. 

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