Ex-wife wins shared pension rights: Vivien Goldsmith looks at a judgment that may set a precedent in divorce

A DIVORCED wife has been given the right to a share in her husband's pension in a landmark court case that could affect many future divorce settlements.

In the case known as B v B, Douglas Brooks and his ex-wife Anne were getting divorced in their fifties after 12 years of marriage. This week the Court of Appeal upheld the High Court decision that Mrs Brooks was entitled to a share in the self-administered pension scheme set up after the marriage.

The husband had a controlling interest in a family-run building firm where the wife had worked as company secretary.

The case turned on the fact that the scheme was set up after the marriage and therefore qualified as a 'post-nuptial settlement'. This gives the courts powers to order that a portion is set aside for the wife. Normally pensions have been regarded as inviolate.

Norman Russell, a partner in solicitors Paisner & Co which advised the wife, said the 51-page judgment was wide-ranging. It said that the rights of people other than the spouse and children of the divorcing pension member should not be affected.

This could be taken, he said, to mean that money could not be taken out of a pooled company pension scheme, but it could be separated out of individual personal pension schemes on divorce.

'I can't believe the courts would have put in this sort of detail if they did not envisage it being used more widely,' said Mr Russell.

But David Salter, a solicitor with Booth & Co of Leeds, said the judgment meant that pension splitting could potentially apply to any sort of pension.

Even people in company schemes could have their pension entitlements divided to provide for a spouse as long as the total taken out was not increased so other scheme members would not be worse off.

Valerie Kleanthous of Kingsley Napley, a spokesman for the Solicitors Family Law Association, said the case had broadened the law but was unlikely to open the floodgates to splitting pensions entitlement on divorce, as it had said that the courts should not use their powers when third parties were involved. She said this might result in the effect on second families being taken into account.

The Pensions Management Institute has drawn up a recommendation that pensions should be capable of being split on divorce, and this was endorsed by the Goode inquiry into pensions. But the Government seems reluctant to change pensions law, perhaps because of fears of a loss of tax revenue and higher social security spending.

The principle of including pensions entitlement in financial calculations is already accepted in Scotland.

Robin Ellison, a member of the PMI working party, said: 'I'm very sympathetic to the wife's position, but to take money out of the kitty will set a precedent which may be unfortunate. Nobody knows how people will plan their lives now.'

Judith Bell, of solicitors Girlings in Canterbury, Kent, who advised the husband, said an appeal to the House of Lords was a possibility.

(Photograph omitted)