A landmark Court of Appeal ruling could mark a sea change in the way assets are shared between couples divorcing after a short marriage with no children.

In courts in England and Wales the starting point for dividing marital assets which are built up during the marriage is a 50:50 split with the breadwinner and homemaker deemed to have equal rights.

However the latest high profile case marks a significant shift in this approach after appeal judges ruled that the husband of a high-earning, city trader wife was not entitled to an equal share of the assets.

The judges said that Robin Sharp could not claim half of the couple’s assets of almost £7 million after their childless four-year marriage, which ended after Mr Sharp had an affair. They ruled that Mr Sharp was entitled to only £2 million because the “the bulk, indeed effectively all of the property had been generated by the wife”.

Mrs Sharp had been paid substantial bonuses during the marriage, which in turn had swollen the couple’s coffers, but the fact remains that some £5.5 million of their fortune was generated during the marriage, and would ordinarily be subject to the “sharing” principle.

Lord Justice McFarlane said that the facts of the case “triggered a plain exception” to the equal sharing principle. He continued: “Short marriage, no children, dual incomes and separate finances are sufficient to justify a departure from the equal sharing principle to achieve fairness between these parties.”

In England and Wales assets acquired before a marriage are not “ring fenced” – one of the reasons why London is often dubbed the “divorce capital of the world”. However, courts have the discretion to veer from a 50:50 share, particularly if the marriage is short, or if substantial wealth was acquired by one party prior to the marriage.  The difference in the case of the Sharps is that Mrs Sharp earned the wealth during the couple’s four-year marriage. The outcome may well have been different if the couple had had children and Mr Sharp had been the primary carer or on a low income.

This case is very much in keeping with the shift we have seen in recent years of courts looking at each party’s individual needs when dividing assets – even where there is substantial wealth.  The yardstick of equality is just the starting point for how money and property should be shared.

This ruling is likely to provide courts with even more discretion about how much to award each spouse in a divorce. Discretion ultimately means scope for uncertainty. Just imagine how much Mr and Mrs Sharp must have spent on legal fees!

For this reason, increasing numbers of couples are choosing to enter into nuptial agreements , either prior to or post-marriage. The great advantage of nuptial agreements is that the couple themselves can decide how they would wish to divide their assets in the event of divorce, and this can reduce or eliminate any disagreement were the marriage to end.

Nuptial agreements are a specialist area of family law, and anyone considering entering into such an agreement is strongly advised to speak to an expert family lawyer.

This article was originally posted on the Silk Family Law blog 16 June 2017, now part of Irwin Mitchell.