'Super-rich' divorce cases to be tested in the House of Lords

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The Independent Online

The right of a wife to a fair share of her husband's wealth will be decided by the House of Lords in two multi-million pound test cases that begin today.

Two wealthy husbands have gone back to court to ask a panel of law lords to reduce the size of the divorce settlement that they were ordered to pay their wives.

The judges will have to decide on the fair division of the family assets and the value of a wife's contribution to the marriage.

Ken MacFarlane, 44, a partner with the accountants Deloitte, is appealing against a £250,000-a-year maintenance award to his wife Julia, also 44, and the decision to divide their £3m family assets equally between them.

Alan Miller, who is a City fund manager, is arguing that the £5m awarded to his wife Melissa by a High Court judge is unfair, and that his offer of £1.3m was generous on the basis that she was only entitled to be returned to her former position as a wage earner with a relatively high earning potential.

Mrs Miller, a 35-year-old American, who was living in a rented flat and earning £85,000 a year before she married, won a payoff of £5m for fewer than three years of marriage. Her husband's wealth was estimated at about £17.5m; he also had shares in his fund management firm, New Star, valued at between £12.35m and £18.11m.

Mr Miller's QC told the Court of Appeal that it would have cost him far less, at most £2m, if he had knocked Mrs Miller down with his car and caused her severe injuries, instead of leaving her for another woman. At the heart of the McFarlane case is what value the court should set for Mrs MacFarlane's contribution to the marriage by giving up her career to care for their three children.

Lawyers believe the McFarlane settlement will have a huge impact on the length of time during which wives of wealthy husbands can expect to continue to receive maintenance where there is not enough capital to achieve an immediate clean break on divorce. The case was overshadowed when it first went to court because it was heard together with the ground-breaking divorce of the Middlesbrough footballer Ray Parlour, who was ordered to pay his wife £406,500 a year for four years, at which point it will be reviewed.

Michael Gouriet, a senior solicitor at the matrimonial law experts Withers said: "This is the first time that the House of Lords has been asked to look specifically at the issue of the division of the husband's future income." The matrimonial law experts Addleshaw Goddard predict that if Mrs MacFarlane succeeds, wealthy husbands can expect, after a marriage of 20 years or more, to be paying for the upkeep of their former wives for the rest of their careers.

A backlog of divorce cases has built up ahead of the verdict from the House of Lords hearings, with separating couples eager to see which party the law lords favour before they attempt to agree their own settlements.

The law firm said: "If Mr MacFarlane is successful in restricting the number of years for which Mrs McFarlane will receive maintenance, professional women should be very wary of relinquishing their own careers to bring up children. If they still choose to do so, such wives would be well advised to consider making a mid-nuptial agreement."

Lawyers also fear that the Miller case, in taking into account the husband's behaviour in ending the marriage, could herald a return to old-style arguments over blame for a marital breakdown.

Addleshaw Goddard warns: "If Mrs Miller is successful, the basis on which a divorce is granted will have repercussions in financial proceedings and as a result, we are more likely to see an increase in defended divorces. In addition, the number of premarital agreements made each year will increase dramatically."

Only five years ago, wives who divorced super-rich husbands used to be restricted to their reasonable needs after the marriage breakdown which usually meant a house and maintenance, leaving the remaining assets with the husband.