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Has Scott v Williams succeeded? Survey reveals increase in s15 claims

Jay Shaw Jay Shaw

The latest Relationship Property Survey conducted by Grant Thornton New Zealand and the New Zealand Law Society indicates the decision in Scott v Williams [2017] NZSC 185 has significantly increased the use of s15 (economic disparity) of the Property (Relationships) Act 1976. At the same time, fewer practitioners now report s15 to be a problematic area of the law. Both are positive developments for s15, which, before Scott v Williams was generally not regarded as achieving its intended outcomes.

The decision in Scott v Williams found that, at the end of a long-term relationship where traditional division of roles has resulted in a significant difference in income, it is reasonable to presume economic disparity exists and should be compensated under s15. As a result, Scott v Williams appears to have opened the doors to more disadvantaged parties seeking compensation under s15, with a corresponding increased use of forensic accountants to prepare these claims.

In particular, the 2021 survey of family lawyers found the use of forensic accountants for calculating economic disparity rose to 60% in 2021 from 34% in 2017 when this issue was last surveyed (a result unaffected by the December 2017 decision in Scott v Williams). Section 15 is now the second most common use of a forensic accountant by family lawyers, behind business and share valuations. Given the relative complexity of this area often requires the use of forensic accountants, we consider it is also reasonable to infer from this finding an overall increase in the number of s15 claims.

This finding is consistent with the results of the 2019 survey when an increase in the number of claims was reported, as was an increase in the quantum of s15 awards. The latter may be due to the change in methodology under the new approach which remains complex, but less so, and generally results in higher calculated awards than under the previous approach.

Fewer practitioners also report s15 to be a problematic area of the law. While in 2019 nearly two thirds of respondents indicated s15 was no more workable in practice following Scott v Williams, in 2021 the number of practitioners who consider this area problematic reduced from 30% in 2019 to 19% today. This suggests practitioners have over time become more comfortable working with the approach in Scott v Williams, possibly through the increased use of forensic accountants.

The increase in s15 claims and of forensic accountants to perform these calculations is also consistent with a further survey finding that 65% of practitioners rank a good knowledge of relationship property law as the most important attribute for forensic accountants, an increase of 12% from 2017 when this question was last asked.

This knowledge is particularly important in s15 claims. A forensic accountant with a good understanding of the more streamlined framework established in Scott v Williams should be able to prepare a calculation efficiently and cost effectively to help counsel advise their clients when formulating a claim under s15.