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Family Law

The leading authority on all aspects of family law

31 AUG 2007

Lump sum by instalments: how variable?

Eleanor Hamilton QC, Barrister. It is trite law that s 23(1)(a) of the Matrimonial Causes Act 1973 allows the court to make one lump sum order but can, within that order, provide for a series of lump sums or a lump sum by instalments. The ability to make an order for a lump sum by instalments has long been regarded as a valuable tool where parties are seeking to achieve a clean break order at the conclusion of ancillary relief proceedings. It allows the parties (or the court), to overcome liquidity problems and commit themselves to a clean break by the phasing of the payment of capital from one party to the other over a period of time. The paying party knows the total cost to him or herself and the receiving party is able to plan her or his life knowing precisely the size of their settlement and when it will be received. A lump sum by instalments therefore has those twin attractions, much sought after by the courts: certainty and finality. Or does it? In this article Eleanor Hamilton looks at some recent cases where orders for lump sum payments by instalments have not provided certainty and finality, in view of s 31 of the Matrimonial Causes Act 1973 and the courts' powers at common law to suspend the remaining instalments due under a lump sum order. It also looks in detail at the recent case of L v L (unreported) 13 October 2006, where the key difference between a lump sum by instalments order and a series of lump sums order was in contention. For the full article, see September [2007] Fam Law.

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