Earlier this year a UK court awarded one of the largest ever UK divorce settlements. It ordered that an un-named Russian billionaire pay his estranged wife £453m. But apart from this eye-watering amount, what does this case tell us about divorce settlements in the courts of England and Wales? Three important observations can be made. First, England remains the favourable jurisdiction for divorce settlements for the stay-at-home wife or financially weaker spouse. Second, it highlights the importance of having clear evidence. Third, it provides insight into how a proactive approach to divorce, or future planning, by parties can prove invaluable both in terms of the distribution of assets and amicability.
Before delving into these observations, it’s first necessary to gain some context. The case concerned a former oil and gas trader and his wife. They met and married abroad before moving to the UK in the 90s. They have two children together. The court was informed that, some years ago, the husband sold shares in a Russian company for £1bn. The woman had been a stay at home mother and looked after the couple’s children. During court proceedings, both accused each other of having affairs. Despite these doubts about fidelity during the marriage, it was clear that the couple continued their relationship for many years.
The UK as a “divorce capital” for the financially weaker spouse
The case goes much further than demonstrating that there is merely only hope for the financially weaker spouse when it comes to gaining a favourable settlement. Instead, it reinforces the oft-repeated claim that London is the “divorce capital of the world”, because financially weaker spouses flock here to start proceedings.
This became clear when Mr Justice Haddon-Cave, presiding over the case, showed little sympathy to the husband’s argument that he had made a “special contribution” to the creation of wealth, holding that the wife had made “equal contributions to the welfare of the family”. This, in turn, allowed the court to justify awarding the wife a significant proportion of assets.
What this shows is how non-financial contributions are not seen as subordinate to financial contributions in the courts’ assessment of the division of assets upon divorce. Rather, it demonstrates how the approach of the courts in England and Wales is underpinned by the principle that breadwinners’ and homemakers’ contributions are seen as roughly equal in determining the contributions made to a marriage.
The importance of evidence in divorce proceedings
Discussing cases can sometimes appear abstract. However, this case reminds us how concrete evidence is essential if a party is to be successful in proceedings. This is clear in Haddon-Cave’s judgment, where he found that there existed a “subsisting marriage” following the affairs because there was clear evidence demonstrating this. For example, thanks to the wife producing evidence to show that the couple continued to go on holidays, slept together, and how she had “unrestricted” use of her then husband’s credit cards
She also provided documentary evidence, such as emails to solicitors where the husband referred to her as “my wife” and evidence which demonstrated that she was actively involved in family matters such as assisting in the renovations of properties and purchasing works for their art collection.
It was all the above which led Mr Justice Haddon-Cave to conclude that, notwithstanding the fact that the husband contributed financially, construed as a whole, there were “equal contributions to the welfare of the family” by both parties which helped persuade the court that the case “should be subject to the sharing principle”.
This meant an approach which presumed an initial 50:50 split was appropriate. Indeed, even in light of the recent Sharp v Sharp case, this conclusion was ultimately unsurprising, particularly as the marriage was a long one of 20 years. Following consideration of evidence, Mr Justice Haddon-Cave said that the total sum of £453,576,152 was most appropriate for the wife, comprising “41.5% of the total marital assets” which he found was a “figure… justified in all the circumstances.”
A proactive approach to divorce can prove invaluable
What is notable in the case is how the wife initially sought £350m. However, because the two parties had not agreed a settlement she was subsequently able to claim a greater amount. This included their art collection, English home and Aston Martin car. This demonstrates how a more proactive approach to the divorce by the husband could literally have saved him millions.
The husband could have further sought to shield assets via a pre-nuptial agreement which the court would have considered. This is something which is often overlooked but is important to consider as one of the most difficult aspects for parties in a divorce, both financially and emotionally, is the subsequent division of assets.
Aside from the eye-watering settlement, an analysis of the case highlights a number of serious issues worth considering. In particular, the importance of the jurisdiction in which a case is heard, the importance of sound knowledge regarding evidence and the importance of a proactive approach to divorce and future planning.
Grayfords is renowned for its sound legal advice in each of these areas due to its unique approach, resources and experience.
Solicitor, Megan Bennier from Grayfords says:
“Today’s world is increasingly globalised and couples travel across the world together as nationals of one, or maybe even two countries, marrying in another and setting up home in yet another. This means they often have two or three places in which they might be able to start divorce proceedings. Before rushing into things, we often ask our clients to think about their prospects in other jurisdictions weighing up what they might obtain in a settlement against speed and convenience.
This case has a number of interesting factors, not least the husband’s argument that he had made a special contribution to the wealth of the family. This was most recently seen in the tabloid press when footballer Ryan Giggs asserted his “special genius” had swelled the family coffers. No doubt they had, just as the Russian businessman’s good deals had done so. But the key question for the courts comes in two parts: firstly, is there “special genius” at work, and secondly, does it justify giving the non-genius spouse less for their contribution to family life than they otherwise would have done so the genius can have more. It is very rare that the two-part question can be satisfied with two yesses and therefore the argument is made frequently but successful rarely.
As stated above, it’s clear there are two messages loud and clear in this case: homemakers’ and breadwinners’ contributions are just as valuable to family life, and that having a good business head and making good deals is not necessarily “special genius” when it comes to a divorce settlement.”