Divorce settlements: B.A.C.K.L.A.S.H.

D.I.V.O.R.C.E. may never be the same after high-profile claims last week. Even top lawyers are confused. By Steve Bloomfield
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The Independent Online

Speaking against a backdrop of legal battles by women for multimillion-pound shares of their husbands' fortunes, Liz Vernon, who represented the former footballer's wife Karen Parlour in a landmark divorce case in 2004, said the Law Lords' decisions could lead to the biggest changes in divorce law for 30 years.

As the Lords began their deliberations on Miller vs Miller and McFarlane vs McFarlane, lawyers who have represented clients in some of the most high-profile divorce cases in the past decade warned the decision could to "damaging social consequences".

Melissa Miller, 35, was awarded a £5m settlement when her marriage to Alan, a multimillionaire fund manager, ended after two years and nine months. Mr Miller, 41, has appealed to the Law Lords to overturn the settlement. He had left his wife for another woman, causing the marriage to end.

Ms Vernon's victory for Karen Parlour sent shockwaves through the legal system. The Middlesbrough footballer Ray Parlour was ordered to pay his former wife a third of his future income. Ms Vernon said the cases now being considered by the Law Lords could have an even more profound effect. If Mr Miller's affair was taken into consideration it would overturn more than 30 years of precedent, she said. "We have been told for decades that we should not be looking at conduct. It just means everyone sits there shouting 'He did this' or 'She did that'. It would be a heck of a retrograde step."

Sandra Davis, head of family law at the firm Mischcon de Reya, said: "If the Miller case is upheld, the social ramifications will mean those with money will think carefully about whether they commit. It may have the worst of all results. If those with money don't get married, that creates damaging social consequences for the future."

Resolution, the national association of family lawyers, warned that the financial consideration of divorce could put many people off marriage, regardless of their level of income. "You cannot overstate the impact of the big money cases," said Andrew Greensmith, the organisation's vice-chair. "The principles run through other cases lower down. They are relevant, just with not as many noughts."

The Lords is also considering the case of Julia McFarlane, who was awarded half of her husband's £3m estate and £250,000 a year after their 18-year marriage ended. The Court of Appeal ruled that the settlement could last for only five years. Mrs McFarlane, 44, is challenging that.

Rebecca Probert, a lecturer in family law at Warwick University, said the two cases could "completely change how divorce cases are dealt with in the courts".

The precedent-setting divorce ruling, White vs White, in 2000, established the concept of a 50/50 split of assets. Pamela and Martin White had been married for 33 years and had run a farming business. Mrs White was offered £800,000 but her lawyers said she deserved more. The Lords granted Mrs White £1.5m.

The goalposts appeared to shift again eight years later, when Karen Parlour was awarded a percentage of her former husband's future earnings as part of her settlement.

Family law experts believe that wealthy men will become less willing to get married. The Hollywood actor George Clooney has already said he will never marry again. Fellow film actor Sean Bean, who appeared in The Lord of the Rings and Troy, last week said he had had his "fair share" of marriage after three divorces, and had no plans to marry again.

The golfer Colin Montgomerie last week admitted he may remarry, despite reaching an out-of-court settlement with his former wife, Eimear, for an estimated £15m.

Although only the cases of the very wealthy tend to reach the Court of Appeal or the House of Lords, the impact of their outcomes is felt in all divorces.

Mr Greensmith said: "Cases like this highlight certain problems that are endemic in the divorce process at present. One is uncertainty: people go into the process and the outcome is inherently uncertain and difficult to predict. All courts have an enormous discretion about how they allocate funds and assets."

The number of divorces in the UK rose to 167,737 in 2004, the highest number since 1996. Some 306,000 couples got married, about one third of which were remarriages. Since the 1970s, the gap between the number of first marriages and the number of divorces each year has been rapidly shrinking. Some family law solicitors predict the gap will close completely within five years.

Unmarried couples who live together have little protection if they split up. Family law experts said most couples who live together are under the misguided belief that they are protected by "common law marriage".

Ms Probert said many couples do not realise they have no automatic rights to maintenance, property or pensions. "They will be sadly disillusioned if they do break up," she said.

The Law Commission is conducting a review analysing a series of proposals to give a level of protection to the two million unmarried couples in England and Wales. A consultation paper is to be published in April.

For those who do decide to go down the aisle, pre-nuptial agreements are becoming more common. Although such deals are not yet legally binding, more judges are taking them into account when deciding on settlements.

Raymond Tooth, Eimear Montgomerie's divorce lawyer, said: "It would be prudent for anyone bringing a lot of wealth into the relationship to have a proper agreement done before the marriage."

Ms Davis said more couples would now sign pre-nups. "Why would you risk this level of capital? Why would you enter into the most important contract in your life without some sort of contractual protection like a pre-nup?"

For some, even a pre-nup is not enough. "There is one big precaution a wealthy man can take," said Lisa Fabian Lustigman, a family lawyer at Withers LLP. "Don't get married. This is all so unromantic, but if you have serious wealth it is a serious consideration."

CELEBRITY COUPLES

Colin Montgomerie vs Eimear Montgomerie

He is: One of Europe's top golfers and worth more than £25m

She is: The law graduate who put a career aside to raise three children

Married for: 14 years, with a brief separation in 2001. Divorced 18 months ago

What she got: More than £12m, possibly as much as £15m. He will pay off the £2m mortgage on her new house

What he said: "I don't need a crystal ball to see Jo (his new girlfriend) and I have got a future together. I would love to make her my wife"

What she said: "My future as an independent person is assured and so is the future of our children"

Simon Cowell and Terri Seymour

He is: 46-year-old multi-millionaire music mogul and creator of TV talent show The X Factor

She is: TV presenter Terri Seymour, 31, who has appeared on shows including Wheel of Fortune

He is worth: Estimated to be at least £45m from his record deals and shows.

He says: "Why would I get married when - if it doesn't work out - I am going to have to hand over 50 per cent of my money? That's verging on insanity"

She says: "If I had a pound for every woman Simon had kissed since we've been together I'd be very rich"

Rod Stewart v Alana Hamilton

He is: ageing rocker with £60m fortune that includes a £17m house in Beverly Hills and a £3m home in Epping Forest

She is: Fifty-something Texan model

Married for: Married in 1979 and were together for five years. They have two grown-up children - Kimberley and Sean

What she got: Neither has gone public on the deal - once rumoured to be more than £12,000 a month

What he said: "I don't think anyone should get married - either sex - before 30, because everything changes and women change the most"

What she said: "I'm not at all one of these rich ex-wives who got a fortune"

Sean Bean vs Melanie Hill

He is: Sheffield actor who was in The Lord of the Rings, GoldenEye and Troy

She is: actress in BBC sitcom Bread and drama series Playing the Field

Married for: Spent 16 years together, seven years married. Divorced in 1997 after she tired of his infidelity

What she got: She took the children and moved out of the £2m family home into a smaller cottage. Assets were split

What he said: "I've had my fair share of that... I have no plans to get married"

What she said: "He is a very good and very special person. There was a time when I wouldn't have been able to say that about him but that was during the divorce and I just lost my mind a bit."

Divorce by the numbers

167,737 DIVORCES WERE recorded in the United Kingdom during 2004

£15bn DIVORCE BILL faced by the taxpayer in legal fees, court funding, counselling services and other costs each year

1857 MATRIMONIAL CAUSES Act gave ordinary people chance to divorce. Far more generous to men than women

£165,000 AVERAGE AMOUNT that divorcing couples split in assets when they separate

42.7 AVERAGE AGE at divorce for a man. The average age for a woman is 40.2

1969 DIVORCE REFORM Act allows divorce if couple separated for two years and both agree, or five years if only one in favour