Posted: Monday 2 April 2012
How much is a child worth?
I read an article the other day which stated that a former client (Mr Smith) of a large London firm has claimed they acted negligently when advising him in relation to child maintenance payments. While the firm was acting for him, he agreed to pay maintenance of £7,000 per month to his ex-partner. The couple were unmarried, and had separated before the birth of their child. He has apparently subsequently been told (by a second firm) that the CSA would only assess his liability at a total of £8,000 for the whole year.
On the face of it, you might agree with his apparent view that he struck a bad deal. But actually, without considerable further details (which will no doubt be considered if the legal case proceeds) it’s impossible to tell whether the original deal was reasonable or not.
That’s because the CSA is only part of the story when it comes to assessing what level of child maintenance is appropriate.
In both England and Scotland, the parent with care can claim a “top-up” on the sum assessed by the CSA via the Courts. That means that parents with high (or sometimes even mid-level) salaries can end up paying a lot more than the basic CSA rate.
In both England and Scotland, parents can apply to the Court for an additional payment where:
- The non-resident parent earns more than £2000 per week; or
- The application is for school fees and educational expenses; or
- The application is for expenses relating to a child’s disability.
The legal remedies in the English and Scottish courts however take quite different forms.
In Scotland, the “top up” application is made under the Family Law (Scotland) Act 1985, which can only award monthly maintenance payments. Such applications are fairly infrequent. A former cohabitant could also apply for a lump sum under the Family Law (Scotland) Act 2006 to cover the economic burden of care for the child, but only if the cohabitant suffered economic disadvantage in the interests of the other partner or the child. There have been few cases under the 2006 Act to date, and it is difficult to predict exactly what award the parent would receive.
In England, the application is made under Schedule 1 of the Children Act 1989, and it seems likely this was what was considered in Mr Smith’s case. The English court can award a monthly payment, or a lump sum of capital, or a transfer or settlement of property (although the property will generally revert to the paying parent when the child reaches majority). The Court has to consider the income, earning capacity, property and other financial resources of the parents and the child; the financial needs of the child; the financial needs, obligations and responsibilities of the parents; and the manner in which the child was being, or was expected to be, educated or trained. Such an application can be made regardless whether or not the couple were married, although it is frequently used by an unmarried parent to claim financial provision from a wealth ex-partner – usually significantly less financial provision than would have been awarded on divorce. If Mr Smith wants to look on the bright side, he might want to remember that!
