Receiving compensation for clinical negligence or for injuries suffered in an accident has nothing at all in common with winning the lottery. A judge’s ruling in a divorce case revealed how very easy it is, in the absence of expert investment advice, to swiftly fritter away compensation that is supposed to last a lifetime.

A woman received £550,000 in compensation from the NHS after a delay in diagnosing a reoccurrence of cancer meant that she had to undergo further extensive treatment which had long-term physical and psychological consequences for her. She and her husband were not high earners and had up to that point lived modestly.

However, their spending thereafter rocketed. They bought a property in Spain, where they took frequent holidays; numerous substantial cash withdrawals were made and the woman purchased a high-end car. Within five years of receiving the compensation, all of it had been spent. By the time their marriage ended, the couple, aged in their 40s, had gone full circle. Both of them had substantial debts and had to manage their money carefully in order to pay their monthly bills.

Following their divorce, a judge found that the wife’s needs outweighed those of the husband and that she required a £180,000 lump sum. That was on the basis that she was not able to work at the same level she had before receiving cancer treatment and would not be able to increase her working hours, now or in the future.

Challenging that outcome before a more senior judge, the husband argued that it was unfair in that the wife had been awarded 99 per cent of the matrimonial assets. Her pension had not been taken into account and, whilst she had retained the assured tenancy of a four-bedroom property, he lacked the means to house himself. His appeal was allowed, principally on the basis that the district judge had taken into account evidence that she should not have done.

Re-making the decision, the more senior judge noted that the wife’s particular needs arising from her cancer treatment had to be weighed in the balance. However, her damages award formed part of the matrimonial assets and there was no legal presumption that her needs should outweigh those of the husband.

There were insufficient funds to meet all of their needs, but that did not mean that the needs of one should be wholly abandoned in favour of the needs of the other. The judge ruled that the Spanish property should be sold and the proceeds split 50/50. Overall, the matrimonial assets were divided 60 per cent to 40 per cent in the wife’s favour. No one could hear of the wife’s ordeal without feeling great sympathy for her, but that outcome achieved fairness between her and the husband.

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This article is provided for general interest and information only. It does not constitute legal advice. Whilst every effort is made to ensure that the content accurately reflects the law in England as at the date of its transmission, no liability is accepted for any loss or damage arising from any act or omission resulting from any information contained herein.