Pump Court Chambers

BC v SC [2023] EWFC 307 (B) – Jennifer Lee acts in significant case concerning the court’s approach to critical illness payments in financial remedies application

News 7th June 2024
Jennifer Lee

Jennifer Lee, led by Judith Murray KC, acted for the Applicant in BC v SC [2023] EWFC 307 (B). In a rare decision, the court considered whether critical illness insurance proceeds were matrimonial property.

The parties had married in 2002. Their divorce was finalised in October 2021. In May and June 2021, the husband received two payments totalling £1.4 million, being the proceeds of critical illness insurance policies.

The Court noted that there was no direct authority as to how critical illness payments should be approached. Were they non-matrimonial, or matrimonial property?

Applying the approach in Wagstaff v Wagstaff [1992] 1 W.L.R. 320, [1991] 11 WLUK 232, the court determined that the proceeds of critical illness insurance policies, which were paid out months prior to the finalisation of a divorce, were matrimonial property and divided 70:30 in favour of the husband. Per Butler-Sloss LJ: “In general, the reasons for the availability of the capital by way of damages had to temper the extent of, and in some instances might exclude the sharing of, such capital with the other spouse”.

The judgment can be found on BAILII here and on Practical Law (with subscription) here.

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