Lords rule in favour of ex-wives
Wednesday 24 May 2006
The Law Lords ruled in favour of ex-wives today in a major legal ruling on two big money divorce cases.
The House of Lords held that Melissa Miller can keep the £5 million she was awarded out of the £17.5 million fortune of her husband Alan and that Julia McFarlane is entitled to £250,000 a year from her husband Kenneth for life rather than just for five years as decided by the Court of Appeal.
The judgment, which lays down guidelines for the courts on how to split the assets between partners in multi-million-pound settlements, has taken on added significance since the separation of Heather Mills McCartney and Sir Paul McCartney, whose personal wealth is said to exceed £820 million.
Outside court Mrs McFarlane's lawyer James Pirrie said: "We are delighted for Julia. It is a ground-breaking ruling.
"Until today maintenance for a stay-at-home mum was based purely on her living costs.
"Now judges must consider contribution and compensation for people like Julia.
"This is only fair. The judgment recognises her sacrifice and that marriage is a partnership."
Another member of Mrs McFarlane's legal team, Bradley Williams, said she was pleased with the outcome but disappointed that it had taken five years to get there with the consequential effects on her family life and children.
He added that Mrs McFarlane had given up her promising career as a city solicitor in 1991 with her husband's agreement so she could bring up their children.
During this time his earning levels accelerated with her support and by 2002 his total net income exceeded £750,000 a year.
On leaving court Mrs Miller said: "Obviously I am very happy."
In their divorce settlement Mrs McFarlane, whose husband was a senior tax partner at Deloittes, received the £1.5 million family home in London comprising one half of the family's capital assets.
A judge awarded her maintenance of £250,000 a year for life, but Mr McFarlane appealed and that figure was reduced to £180,000 for life.
Mrs McFarlane went to the Court of Appeal who reinstated the figure of £250,000 but imposed a five-year time limit during which she was expected to save money to provide a lump sum to support a clean break.
In Miller v Miller, the Court of Appeal upheld the decision that multi-millionaire fund manager Alan Miller should pay a £5 million settlement to his former wife after a union that lasted a little under three years.
The judges were told that she had been living in a cramped, rented flat in Cambridge when she married Mr Miller in July 2000.
He complained at the hearing that he would have been better off if he had knocked her down in his car.
But the Court of Appeal said that, by marrying her, Mr Miller had given his wife an expectation of a significantly better standard of living.
The judges also said it was significant that the marriage had broken down because Mr Miller left her for another woman, whom he had since married.
Today, the Law Lords dismissed Mr Miller's final appeal.
Commenting on today's ground-breaking ruling, Andrew Greensmith, chairman of the 5,000-strong family lawyers group Resolution, said: "These judgments have a major impact for those involved in family law.
"A previous House of Lords case, handed down five years ago, confirmed an equal share of assets as a general rule. These two cases make other issues clear.
"Behaviour should not be an issue when assets are divided, and this judgment confirms that, which is very welcome.
"It clarifies that the starting point for division is a fair share of what has been built up during the marriage, provided basic needs are met. As a result, we expect that, where people bring assets to a marriage, they are more likely to think seriously about making a pre-marital agreement."
Mr Greensmith said the McFarlane judgment tackled the tricky issue of fairness when couples split.
"It makes clear the value of the home-maker role and gives reassurance to career professionals who take a career break to raise children," he said.
"As marriage is a partnership of equals, the earning ability of one, based on the career sacrifice of the other, should be shared, even if the relationship ends. Of course, this only applies where there is a surplus beyond needs.
"The reality is that, for most couples, making ends meet remains a major challenge."
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