What the Duxbury? - Duxbury Calculations; the peaks and pitfalls


Why were the Duxbury Tables established?

The Duxbury Tables were established in the case of Duxbury v Duxbury [1981] 1 FLR 7. The parties had been married for 22 years and wanted to achieve a clean break.

Mr Duxbury was the higher earner and it was agreed between the parties that a lump sum payment to Mrs Duxbury was the best way to achieve the clean break. The figure that was ultimately reached was based on Mrs Duxbury receiving a lump sum that would last until she died with nothing left over.

What does a Duxbury Calculation aim to achieve?

The aim of the Duxbury Tables is to produce an estimated calculation of a capital lump sum that would enable a spouse to receive an equal instalment over the course of their lifetime to meet their financial needs. If the calculation has been carried out perfectly, then all of the funds would have been used up at the exact date of death. The aim of these calculations is to affect a clean break between divorcing couples (which the Court has a duty to consider) as opposed to there being continued financial ties between the parties for years after they have officially divorced.

What does a Duxbury Calculation take into account?

A Duxbury calculation is based on the receiving parties age, required annual income need and their estimated life expectancy, together with allowing for considerations such as the rates of capital growth and inflation. Due to these factors being very much artificial in nature, these calculations can by no means be definitive and certain. The calculation is merely a starting point and a guide to assist with negotiations between parties, and as LJ Thorpe states, it is a ‘tool not a rule’.

However, there is only a narrow discretion for the court to depart from the mathematics of the Duxbury Table, and it will do so only in special circumstances. Of course, relying on the table can only be considered if there are sufficient capital assets available to make a capitalised maintenance payment in this way.

The Duxbury Paradox

There has been much criticism of the use of these tables from practitioners due to them giving disproportionate or unfair results, and the link between these calculations and the reality of what is actually achievable in real life is questionable. One of the most disproportionate outcomes is that a party who is older and has had a long marriage will receive a smaller fund than a party who is young and has only had a short marriage. As the calculation is based on the age and life expectancy of the receiving party, the figures will therefore be greatly disproportionate to the length of the marriage and do not take into account financial contributions made during the marriage by the receiving party, which may have been substantial. This is known as the ‘Duxbury Paradox’.

Other difficulties

As the payment is designed to maintain the receiving party for life instead of for a fixed period, it does not consider possible future changes in circumstances. For example, the receiving party, who may be younger, may be able to re-build their career and generate their own income to meet their needs on their own, or their income and housing needs may reduce after time when perhaps their children leave home. In these circumstances there is no option for the payer to reclaim any of their funds for overpayments made. There is also no recompense if the receiving party re-marries or dies, unlike with spousal periodical payments where payments will automatically end. On the other hand, should the calculation be insufficient, then there is no opportunity for the receiving party to seek a further order for further payment to be made to make up any shortfall.

Room for manoeuvre

There is, albeit very limited, some room for manoeuvre. When a periodical payment for maintenance is capitalised, it may be discounted to reflect the accelerated payment. The Court can also adjust the figure taking into account the parties’ standard of living throughout the marriage, the potential release of capital once the home is sold, the earning capacity of the receiving party and their eligibility for a state pension. A judge will decide based on all the statutory criteria and circumstances of the case as to whether an increase or decrease of the lump sum is needed to make sure the payment to be made is fair.

A word of warning

The intention behind the lump sum is that the fund will to be invested to create capital growth and income yield for the dependant party, and so specialist financial advice should always be sought to make optimal use of the fund in order to satisfactorily meet their future needs.

In summary

Despite the downfalls of the Duxbury Tables, the Courts view is that the severing of financial ties between parties justifies their use and emphasises that this is only a starting point when considering all the facts of the case in order to reach a fair result for all parties involved.  

Written by : Claudia Stachini (Solicitor)

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