In England and Wales there is no set way for courts to calculate financial orders when a couple gets divorced. Instead, judges apply a series of factors (the s25 factors) to reach decisions that are fair to both parties. In many cases, where assets are clearly defined and easily divided, this can be a relatively straightforward exercise. However it’s often the case that the matrimonial pot includes property that’s not so easy to value.
Pensions for example, will require actuarial or other expert analysis to ensure the correct value is attributed to them ahead of any settlement. The value of other assets – business interests, start-ups, crypto assets and shares – are also difficult to assess with accuracy. They may be so volatile that their worth could dramatically rise or fall after a settlement has been reached or a final financial order is handed down by the court.
Balancing risk
The question of how this risk should be shouldered by each spouse – and reflected in any agreed settlement of financial order – may therefore become a key element of discussions between the parties or in contested court hearings.
Over the years the courts have developed ways to allocate risk in such circumstances. Wells Sharing Orders in particular are useful when marital assets are illiquid. That’s to say when they can’t easily be sold or capitalised at their fair market price at the time of divorce.
Traditionally this type of order – while effective in dealing with assets of uncertain value – was seen as being of limited scope. Courts seemed willing only to use them as a last resort in proceedings. When they were used, courts would typically only apply Wells Sharing Orders to a minority proportion of the overall marital wealth. This approach has largely been debunked by the case of Culligan and Culligan (2026) which we discuss below.
How important are Wells Sharing Orders in Financial Proceedings?
Wells Sharing Orders are an important aid to courts dealing with situations where the marital assets can’t easily be converted into cash at the time of the divorce. Instead of ascribing a specific value to illiquid or risky assets, these orders help ensure that each spouse ends up with a fair share of secure assets as well as an interest in more risky assets.
The orders are geared towards avoiding a scenario where one spouse receives a cash lump sum and the other is left with a business or other asset of equivalent notional value that can’t easily be sold, and which may decline rapidly in value post-divorce. Under a Wells Sharing Order a spouse may, instead of cash, receive a percentage of shares in a company or a right to share in the proceeds of sale of a business when it is eventually sold.
Of course the drawback is that a Wells Sharing Order prevents a clean break divorce – which is often the preferred option of the couple and the courts. It’s perhaps one reason why such orders have been used more as a last resort – when other ways to split assets have proved unworkable. Following Culligan, however the position of Wells Sharing Orders appears to have strengthened considerably.
Culligan v Culligan 2026. A New Approach To Wells Sharing?
The Culligan divorce involved assets of around £30 million. These included:
- The family home, valued at £7million
- Shares in a private company (Colendi Holdings) valued at £14 million net of tax
What made this case appropriate for a Wells Sharing Order was the fact that the expert who attached the £14 million valuation to the Colendi shares could only do so using the latest round of funding for the company. The same expert indicated that the maximum amount Mr Culligan could currently take out of the business was ‘effectively nil’. (This was due to the company’s evolving financial situation and the nature of the husband’s shareholding.) Risk attached to the shares was also increased by the real possibility that no benefits in the form of dividends would be paid by Colendi for up to three years.
In the lower court the judge applied the sharing principle and sought to equally divide the assets. The way he allocated liquid (‘copper-bottomed’ to use the term from the original Wells decision) and illiquid, riskier assets however, was problematic – for the husband at least.
That’s because the husband was awarded 70% or a notional £9.6 million of the Colendi shares and £4.1 million in realisable assets. The wife on the other hand was awarded just 30% of the shares, valued at £4.1million. and £9.5 million of realisable assets.
This lower court decision was based on what the judge said was the established approach to Wells Sharing Orders: even where there were risky assets the orders should only be used as a last resort and should cover only a minority proportion of any financial settlement as a whole.
Left with what he said was a disproportionate share of risky investments, the husband appealed.
Culligan Court of Appeal decision
The Court of Appeal was clear in its judgment and allowed the husband’s appeal. Lord Justice Moylan took the view that, despite what the lower court judge had decided, there is no established principle that Wells Sharing Orders should only be made as a last resort or cover only a small portion of the total award.
Moylan LJ conceded that Wells orders should not be made routinely. They should not, he said be ‘common fare’. Chiefly this is because of the potential they have to undermine clean break settlements. If at all possible, parties should not be left linked financially for an uncertain period into the future.
With this in mind the Court of Appeal decided that the risky, illiquid shareholding in Colendi should be split 50/50 between the parties. This meant the wife’s share ownership (as awarded in the lower court) increased from 30% to 50% and her portion of the liquid assets (comprising mostly the proceeds of sale of the family home) was reduced accordingly. The husband’s overall asset share was also adjusted accordingly.
Comment
Ultimately, the question for the court is how to best divide assets fairly in the particular circumstances of the case. In cases like Culligan this will often mean looking at the nature and quality of the respective assets that each spouse will retain. For the Court of Appeal here, the difference in quality between a value attributed to the shares in Colendi on the basis of opinion evidence and a sum in hard cash derived from the sale of a luxurious home was obvious.
The decision is an important development, particularly given the increasing prominence of crypto assets and other evolving sources of wealth that may be difficult to accurately value for the purposes of financial remedy proceedings. While Wells Sharing Orders will still be approached with caution by the courts, it’s clear that, to achieve fairness, they are a useful and accessible way to appropriately allocate financial risk between divorcing couples.