Ex-wives' claims for millions are backed in landmark legal rulings

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The Independent Online

Thousands of divorced women who gave up high-flying careers for the sake of their marriages could qualify for millions of pounds in compensation after a House of Lords ruling in favour of ex-wives.

The judgments, delivered yesterday, considered two divorce cases involving super-rich husbands and set down new principles for the fair division of a married couple's assets. They are expected to trigger more claims from wives who still receive maintenance payments from their husbands but feel they have not been properly compensated for giving up lucrative careers.

Julia McFarlane, who was married to a senior tax partner at Deloittes earning more than £750,000 a year, was awarded £250,000 a year for life, not just for the five years decided by the Court of Appeal. In the second appeal, the law lords decided that Melissa Miller was entitled to keep the £5m awarded out of her ex-husband Alan's £17.5m fortune.

Mrs McFarlane said she gave up a high-earning career when she married 18 years earlier. Her lawyer, James Pirrie, described the judgment as "ground-breaking" and said: "Until today, maintenance for stay-at-home mothers was going to be based purely on living expenses. Now judges must consider, as well, contribution and compensation. For people like Julia, this is only fair."

The judgment takes account of Mrs McFarlane's sacrifice and recognises that marriage should regarded as a partnership. She had come to a joint decision with her husband, Kenneth, to give up her career to raise their children, which enabled him to increase his earning power.

Emma Hatley, of the family team at the solicitors Withers which represented Mrs Miller, warned that ex-wives might now want to return to court to challenge maintenance orders: "The judgment creates uncertainty and will encourage litigation by those who can afford it," she said.

Lord Nicholls of Birkenhead, who gave the lead ruling, said courts in the past had based awards on the duration of marriages, relying on the principle that it was "fundamentally unfair" that someone who had been in a marriage for a short time should receive the same as a party who had made domestic contributions for more than 20 years.

He said: "This approach would mean on the breakdown of a short marriage, the money earner would have a head start over the home maker and child carer."

For the same reasons courts should be "exceedingly slow" to make a distinction between family assets and business or investment assets. "The equal sharing principle applies to the former as well as the latter," Lord Nicholls said.

Mrs Miller, whose husband lost his appeal, said she had been told by her lawyers from the start of the litigation three years ago to expect £5m from the settlement. "Although this has been a long and exhausting process, it is a wonderful result that leaves me delighted with my legal team," she said. Mr Miller challenged an earlier order that he pay his ex-wife the £5m after their brief marriage failed.

The Millers, who lived in Chelsea, were married for two years and nine months and had no children when they separated.

In an interview with the Jewish Chronicle to be published tomorrow, Mr Miller, 42, a chief investment officer at New Star Asset Management, delivers a damning criticism of litigation in the divorce courts.

"It seems to me I have been penalised for the high standard of living I gave my wife during our short marriage, and that the law lords have not given enough weight to my long career that pre-dated the marriage during which my earning capacity was built," he says.

"There should be a fair compensation for the breakdown of a marriage, but surely this should not equate to a meal ticket for life after a short, childless marriage."

He adds: "The impression of the system I was left with was one which discourages the parties from talking to each other, driving still greater wedges between them. The interests of the parties become subservient to the massive egos of the solicitors and barristers involved... The family law system in this country is a shocking disgrace."

Alan & Melissa Miller

Melissa Miller, 36, gave up her highly paid job as a PR executive when she became Alan Miller's third wife in July 2000.

The couple first met in 1995 shortly after she arrived in Britain from her native America to work for a pharmaceutical company in Cambridge.

She refused to cohabit with him unless he promised to marry her.

It was four years before the couple became engaged, a fact that appeared to persuade a Court of Appeal judge last year that Mrs Miller had been committed to the relationship.

Before the marriage, Mr Miller, a City fund manager, bought what was to become the matrimonial home at Elm Park Road, Chelsea, for £1.8m.

Just before the wedding, Mr Miller also received £20m due to him from the sale of Jupiter to Commerzbank, a considerable boost to his fortune.

Mr Miller, 42, said he was quite happy for his new wife to stop working for what he considered "mere play money" to live the kind of lifestyle he "could well afford". She planned and oversaw the refurbishment of their lavish home in France and both were hoping to have a baby, until Mr Miller "sensed" the start of a relationship with the woman for whom he eventually left his wife. Mrs Miller later had a miscarriage.

Mr Miller petitioned for divorce and the couple separated in April 2003.

Mr Miller cited his wife's unreasonable behaviour, but by consent they went ahead on the wife's cross-petition alleging adultery. The Court of Appeal upheld a decision that Mr Miller should pay a £5m settlement.

Lewis Marks QC, who represented Mr Miller, told the judges his client would have been better off if he had knocked down his wife in his car.

Kenneth & Julia McFarlane

Julia McFarlane, 45, gave up her career as a solicitor in the City to support her husband, Kenneth, 44, a corporate tax accountant, and their three children. The couple met as students at Durham University. They moved in together when they were 23.

Their careers flourished and Mrs McFarlane, a trained teacher as well as a solicitor, worked for City firms and earned more than her husband, a corporate accountant.

She continued to work after the birth of their first child, a son. But after the birth of a daughter in 1991 the couple decided that Mrs McFarlane should give up work to raise their family at their home in south-west London.

The couple then had a second daughter, now aged nine. Mr McFarlane's career flourished and they bought homes in south-west London, Salcombe, Devon and a flat in Clerkenwell, central London.

Mr McFarlane had become a successful a partner in Deloitte, earning in excess of £750,000 a year.

But in 2001 their 18-year marriage broke down and they began divorce proceedings. They agreed on an equal split of their capital, £3m, but could not agree on what she should take from his income.

Initially a district judge awarded Mrs McFarlane £250,000 a year for life, but her ex-husband, who has since remarried, appealed and the High Court reduced the amount to £180,000. It was reinstated by the Court of Appeal, but for only five years.

By the time the case reached the House of Lords the positions of the two parties had become more entrenched. So although Mrs McFarlane was out of work for 15 years, her husband's barrister described the time as a mere "career break".

He said: "Thousands of women take several years off when they have children." He said: "She elected with him, to have the pleasures of being at home."

Mrs McFarlane was yesterday awarded £250,000 a year for life.

Changing legislation

* Divorce was first legalised in 1857. Prior to that an Act of Parliament was needed.

* The 1857 Matrimonial Causes Act permitted divorce for the innocent party where their spouse had committed adultery.

* In 1937 grounds for divorce were widened to include desertion, cruelty and incurable insanity.

* The 1969 Divorce Reform Act restated the three existing fault grounds of adultery, desertion and cruelty (widened to "unreasonable behaviour") and added the two "no-fault" separation grounds. These are that the couple has lived apart for two years and they both agree to divorce. Where one of the parties objects to the divorce separation has to be five years.

* In 1996 the Conservative government tried to bring in no-fault divorces where it was possible to be granted a quicker legal separation - one year - without citing a matrimonial cause and where there was no agreement to the divorce. In 2001 Derry Irvine, as Lord Chancellor, threw out the proposals after a sustained campaign from sections of the media which characterised no-fault divorces as an attack on marriage.

* In Scotland, the Family Law (Scotland) Act 2005 dramatically reduces the amount of time required for a divorce on the grounds of separation. The five-year period where one party does not consent has been reduced to two years. Where both parties consent the time period has been reduced from two years to one. The Act also abolishes desertion as a ground for divorce; thought adultery and unreasonable behaviour remain.

* 2006: There are now renewed calls for the re-introduction of no-fault divorce, but with strict conditions attached so that a divorce can only be granted after the couple has shown they have made proper arrangements for their children and their finances.