Balance in divorce settlements shifting? - May 07

Rickerbys Solicitors, the leading south west law firm, comment on recent high profile cases and potential outcomes of divorce settlements especially for the wealthy.

The recent shift of settlements from women tends to be based on divorces where wealthy individuals are able to make substantial clean break settlements and as a result avoid a continuing financial commitment by way of spousal maintenance, according to Helen Cankett, a solicitor in Rickerbys Family team. “These are still comparatively few and therefore it seems to be a pattern affecting only substantially wealthy people.” Rickerbys takes issue with some national pundits who foresee a radical turnaround in the balance of settlements. “It still seems to be the case that wives tend to be the primary carer of the children and if those children are still dependent at the time of the divorce, the Court's first consideration is to their needs.

“If it is the position that the wife will remain the primary care giver, her needs will be linked to the children's needs and may result (if the assets are insufficient to achieve fairness through a clean break) in a disproportionate split of the assets in the wife's favour. This can then give the impression the wife has fared better in the final financial settlement, when in reality the children's needs require this to be the case.”

The UK has to-date been recognised as the most female friendly place for divorce in Europe, however recent cases have prompted a number of judicial comments which the legal profession is taking as an indication of a change in divorce rulings which Courts will take into consideration. Fear of large settlements to wives is thought to have prompted billionaire Roman Abramovich to seek his divorce in Russia.

Gloucestershire ranks as one of England’s ‘wealthy hot spots’ with a number of famous names in the national rich lists. Rickerbys is recognised as one of the Cotswold’s leading law firms, handling a number of high profile divorces involving wealthy individuals.

Referring to recent cited national cases, a wife who did not have a job was refused £1.5 million compensation for loss of her banker husband’s future pay.

Mrs H, a former teacher, whose 20 year marriage had broken down, was awarded £13 million in cash and assets by the High Court, but was told that she was not entitled to a share in her spouse’s ongoing income.

Two other cases which have received much press and judicial attention were also mentioned in the case of Mr and Mrs H. However, in one of these cases, Mr and Mrs Miller, the couple were married for less than three years and had no children. As a result, the Judge who decided the case for Mr and Mrs H commented that the Miller’s case did not assist him.

The other well-known case is that of Mr and Mrs McFarlane. They were married for a long time and still had dependent children at the time of the divorce, which is similar to Mr and Mrs H, however there were insufficient assets to achieve a clean break for the MacFarlanes.

According to Helen Cankett, “In this instance, Mrs MacFarlane was entitled to receive maintenance. This maintenance also included an element of ‘compensation’ as she had given up a career as a solicitor, which would have brought its own financial rewards, to bring up the children and therefore had sacrificed her ability to realistically pursue this well-paid career after the divorce. In contrast, Mrs H was a teacher and could not therefore argue the same position. However, the idea of “compensation” is nothing new. It is simply a different way of financially evaluating a contribution by either spouse to the marriage. It is also only likely to affect high earners where it is possible for a higher level of maintenance to be considered. This may exceed the receiving spouse’s needs, but which is commensurate with their contribution both during the marriage and thereafter. The element of fairness is still an overriding factor.”