What are Duxbury Calculations?

In divorce cases, the court and the couples ideally, want to achieve what we call a ‘Clean Break’; whereby you cut all ties with each other, emotionally and financially. However, this is not always possible. In a lot of cases, we see that there is a financially weaker spouse, more often than not as a result of a joint decision that was made during the marriage, i.e. giving up work to care for the children. In these circumstances, we may have to look at spousal maintenance (also known as ‘periodical payments’) in order to ensure that each individual’s needs are met, post-divorce. The maintenance could be paid as ongoing monthly payments over a period of time 9’the term’), or as a one-off lump sum payment (‘capitalisation’).

There are a few questions we should ask ourselves when approaching the maintenance issue: 

1. Is the case suitable for a Clean Break?
2. If not, should spousal maintenance be paid?
3. If the answer is yes to the above, how much and for how long? 
4. Is there money available to capitalise maintenance payments and should it be capitalised?

‘Duxbury’ calculations come into play at stage 4. of the test. The name comes from the case of Mr and Mrs. Duxbury (see below) which established this principle of how maintenance payments could be capitalised. To be clear, just because there is money available to capitalise the maintenance obligation, it does not mean that should happen. There needs to be enough for the couple to meet their own needs first, and in effect, that capital sum is surplus to what they require to purchase a property to live in, etc. However, in the event that the answer to question 2 is yes, spouses have determined the answer to question 3 and the answer to question 4 is yes, then the Duxbury calculation can be used to work out an appropriate lump sum for a better-off party to pay the financially weaker party, in place of periodical payments. This achieves a clean break. 

In Duxbury v Duxbury [1987] Fam 62, the Husband (H) and Wife (W) were married for 22 years and enjoyed a very good standard of living, with H being a millionaire and W not working. However, the marriage came to an end when both parties entered into extra-marital affairs. H agreed that W, who was cohabiting with her new partner in the family home, was entitled to a comfortable standard of living, as during the course of their marriage. H and W wanted a clean break. W had, no income and was in need , of maintenance. A lump sum payment was the obvious answer, which would multiply the sum that W needed annually by her statistical life expectancy, to provide W with enough income for the rest of her life. W’s accountant began creating a computer programme which could do this. The calculation also took into account other factors, such as, inflation and investment returns.  . In reaching a decision, the Judge decided not to attach any weight to W’s cohabitation and felt that he must instead consider W’s reasonable needs, and the sum of money required to meet those needs. Therefore, the Judge ordered a lump sum payment of £600,000 in addition to the transfer of the family home. H appealed the decision on two grounds: 

1.The Judge wrongly exercised his discretion because in reaching his decision he failed to take into account or to give sufficient weight to the fact that the W was cohabiting with a man who would benefit from the capital which H had been ordered to pay. 

The Judge held that it was wholly irrelevant how W decided to spend her money as the sum was assessed as being appropriate solely for her needs. This decision was upheld (decided to be correct) What are Duxbury Calculations?on appeal. 

2. The Judge wrongly exercised his discretion in that he ordered the H to make provision for the W wholly by way of capital whereby a more appropriate method of provision, having regard to the said cohabitation, would have been a smaller capital order with a periodical payments order.

On appeal, it was concluded that this was simply an ‘odd’ ground of appeal as it would achieve the opposite of what H intended but also, upon what basis would the reduction be made? When applying the law, section 25 of the Matrimonial Causes Act 1973, we are faced with a financial exercise, not a moral exercise. Conduct is not taken into account when calculating an appropriate financial settlement and so, this ground of appeal was dismissed. 

When would I use a Duxbury calculation? 

As above, a Duxbury calculation is best suited for spouses wishing to achieve a clean break, and they have the means to settle the case by way of a lump sum. If the paying spouse does not have the capital (money in the bank or savings) to pay a lump sum, then it is not a feasible outcome and therefore you will likely need to return to spousal maintenance payments.

The Courts are aware of the drawbacks of a Duxbury calculation. There are of course many variables when deciding on an appropriate maintenance figure. However, the Duxbury cannot be all-encompassing in every case. The Court will take a broad-brush approach, but also will consider what is fair and just in the circumstances of the parties. For example, such a calculation may achieve a far too generous sum for a young spouse who had a short marriage in comparison to that of an older individual who enjoyed a lengthy marriage. 

The problem with Duxbury is that it presumes that the ex-spouse will not remarry or die during the term. Re-marriage or death of the payee (person receiving the maintenance) automatically brings periodical payments to an end. So, in effect, the payer is taking a risk in capitalising maintenance. Duxbury awards can be for a short period of time; say five years, up until ‘joint lives,’ i.e. when one party dies, although these are far less common now.

The Duxbury calculations have now been reduced to ‘tables’ which are reproduced annually, considering any relevant changes. The tables can be found within the ‘Family Law: At a Glance Volumes’. It is of course important to appreciate that there can be no substitute for taking specialist advice from a Financial Advisor. In doing so, you will be able to ascertain the accuracy of the Duxbury calculation. 

If you require assistance in reaching a financial settlement with your to be ex-spouse, please do not hesitate to get in touch with a member of our team who will be happy to advise you as to the appropriate next steps and how Blanchards Law can help.