Millions affected by the divorce battles of the super wealthy

Two legal judgments that have changed the rules will not only have implications for the rich, says David Prosser

he number of marriages ending in divorce may now be as high as one in two - good news for family law solicitors, particularly after two legal rulings this week that could pave the way for more bitter court battles between husbands and wives.

The two cases were separate - they just happened to produce rulings on Wednesday - but both could have implications for millions of divorcing couples.

In the Miller case, the House of Lords upheld a previous judgment that Melissa Miller should receive a £5m divorce settlement from her husband, Alan Miller, who is thought to be worth more than £17m.

The case is significant because the couple had been married for less than three years. Previously, the divorce courts had ruled that with shorter marriages, spouses such as Ms Miller should be left no worse off than they would have been if the marriage had not taken place - but that they should not be entitled to a larger share of their partner's wealth.

In the McFarlane case, the House of Lords accepted Julia McFarlane's argument that she should be compensated for the loss of earnings potential she had suffered when giving up her job to look after the children. It said the maintenance her husband, Kenneth McFarlane, should pay her should not be based only on her financial needs, as courts have previously assumed. He will now have to pay her £250,000 of his £750,000 annual income

Though the sums of money at stake in these two cases are large, the judgments will act as precedents for divorcing couples with much more modest wealth. "This will cover a lot of ordinary people, not just the super-rich," says Julia Whittle, of Punter Southall Financial Management. "It may affect many professional couples, as well as divorces concerning older people, or cases where businesses are involved."

The courts will first consider the finances needed to put couples in the positions entrenched in law before these cases - so that a spouse in a short marriage is no worse off, say, or that a maintenance settlement covers needs. But if there is money left once these arrangements have been made, the Miller and McFarlane cases will be relevant.

Victoria Brandon, a matrimonial lawyer at Turner Parkinson, says a "significant number" of couples will be affected. "In the majority of divorces, there are not sufficient assets for these judgments to be relevant, but there are in many cases."

The courts remain reluctant to apportion blame when considering settlements. Previously, Ms Miller had argued that one reason she was entitled to a larger share of her husband's assets was that he had committed adultery. "As a result, many recent cases have cited bad conduct of one party as a reason for increasing the award," says Marc Saunderson, a partner in the family team at the solicitor Mills & Reeve. "The courts have wisely decided it is not their role to apportion blame."

Instead, Ms Miller won her case because the courts decided Mr Miller had earned large sums during the marriage and that she was entitled to think her financial position would last for life. "To be relevant, conduct would have to very serious indeed," says Barbara Simpson, a deputy district judge in the family courts. "The Lords gave Ms Miller £5m because £15m was earned by Mr Miller during the marriage and they had enjoyed a high standard of living."

In other words, the courts have now decided that even in the case of short marriages, the less well-off partner should not suffer a greater loss of standard of living.

Similarly, in the McFarlane case, the courts have decided there should be no distinction made between the partner staying at home and the partner going to work. By choosing to stay at home and look after children, Ms McFarlane's individual finances suffered - once her marriage broke down and she no longer shared a family income with her husband, she was entitled to compensation.

The rulings may seem unfair to spouses who have not done so well from divorce settlements in the past. But there is little prospect of reopening such cases. "These judgments are not retrospective," Brandon says. That means it is not possible to ask the courts to look again at divorces on which they have already ruled.

Should you sign a pre-nup?

* Pre-nuptial agreements are not legally binding contracts under English law. However, the courts can consider any agreement signed before the wedding and they can be an effective way to ring-fence any assets that spouses have accumulated before the marriage.

* More couples may consider pre-nuptial contracts following this week's judgments. Victoria Brandon, of Turner Parkinson, says: "For people with money, a pre-nup will protect both partners - not just the spouse with the larger wealth."

* Pre-nuptial agreements carry most legal weight with shorter-lived marriages, where couples' circumstances are less likely to have changed. Once couples have children, the courts put the children's needs first, irrespective of any agreement before the marriage.

* Couples can update a pre-nuptial agreement if the context in which the contract was signed becomes less relevant.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SThree: Talent Acquisition Consultant

    £22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...

    Recruitment Genius: Experienced Financial Advisers and Paraplanners

    Negotiable: Recruitment Genius: This extremely successful and well-established...

    Guru Careers: FX Trader / Risk Manager

    Competitive with monthly bonus: Guru Careers: We are seeking an experienced FX...

    Guru Careers: Investment Writer / Stock Picker

    Competitive (Freelance) : Guru Careers: An Investment Writer / Stock Picker is...

    Day In a Page

    How to stop an asteroid hitting Earth: Would people co-operate to face down a global peril?

    How to stop an asteroid hitting Earth

    Would people cooperate to face a global peril?
    Just one day to find €1.6bn: Greece edges nearer euro exit

    One day to find €1.6bn

    Greece is edging inexorably towards an exit from the euro
    New 'Iron Man' augmented reality technology could help surgeons and firefighters, say scientists

    'Iron Man' augmented reality technology could become reality

    Holographic projections would provide extra information on objects in a person's visual field in real time
    Sugary drinks 'are killing 184,000 adults around the world every year'

    Sugary drinks are killing 184,000 adults around the world every year

    The drinks that should be eliminated from people's diets
    Pride of Place: Historians map out untold LGBT histories of locations throughout UK

    Historians map out untold LGBT histories

    Public are being asked to help improve the map
    Lionel, Patti, Burt and The Who rock Glasto

    Lionel, Patti, Burt and The Who rock Glasto

    This was the year of 24-carat Golden Oldies
    Paris Fashion Week

    Paris Fashion Week

    Thom Browne's scarecrows offer a rare beacon in commercial offerings
    A year of the caliphate:

    Isis, a year of the caliphate

    Who can defeat the so-called 'Islamic State' – and how?
    Marks and Spencer: Can a new team of designers put the spark back into the high-street brand?

    Marks and Spencer

    Can a new team of designers put the spark back into the high-street brand?
    'We haven't invaded France': Italy's Prime Minister 'reclaims' Europe's highest peak

    'We haven't invaded France'

    Italy's Prime Minister 'reclaims' Europe's highest peak
    Isis in Kobani: Why we ignore the worst of the massacres

    Why do we ignore the worst of the massacres?

    The West’s determination not to offend its Sunni allies helps Isis and puts us all at risk, says Patrick Cockburn
    7/7 bombings 10 years on: Four emergency workers who saved lives recall the shocking day that 52 people were killed

    Remembering 7/7 ten years on

    Four emergency workers recall their memories of that day – and reveal how it's affected them ever since
    Humans: Are the scientists developing robots in danger of replicating the hit Channel 4 drama?

    They’re here to help

    We want robots to do our drudge work, and to look enough like us for comfort. But are the scientists developing artificial intelligence in danger of replicating the TV drama Humans?
    Time to lay these myths about the Deep South to rest

    Time to lay these myths about the Deep South to rest

    'Heritage' is a loaded word in the Dixie, but the Charleston killings show how dangerous it is to cling to a deadly past, says Rupert Cornwell
    What exactly does 'one' mean? Court of Appeal passes judgement on thorny mathematical issue

    What exactly does 'one' mean?

    Court of Appeal passes judgement on thorny mathematical issue