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Stellar Contributions in Divorce Settlements

Posted on 16th May 2017 in Family Law

Posted by

Ricky Noble

Paralegal
Stellar Contributions in Divorce Settlements

Something which is being reported more and more frequently in the media are high value divorce cases in which one party seeks to argue a “stellar contribution”.

Former Manchester United player Ryan Giggs will, according to the Guardian, argue that he should be awarded more than half of the £40m fortune he shares with his wife because of his special contribution or “stroke of genius”.

Very recently however, in an anonymous case, a family court judge has awarded the wife of an oil and gas trader over 40% of the total marital assets in the sum of £453.5m, despite the husband’s case that the wealth was amassed due to his special contributions.

In another recent case involving the Chairman of Laura Ashley, the Court of Appeal tried to provide some guidance about contributions that may be considered “stellar” which are as follows:

  • Only in the rarest of cases will a contribution be so special that one party will be entitled to significantly more of the assets than the other.
  • The contribution must be “wholly exceptional” in that it would be unfair to disregard it.
  • A “windfall” will not be enough. The party claiming a special contribution must themselves have done something remarkable to have built up the capital to be divided.
  • It is impossible to predict what is exceptional in any case and what is not.

The starting point in every case is an equal division of the assets built up during the marriage. The thinking behind this is that a marriage is a partnership of equals and equality of sharing produces fairness. There are bound to be exceptions to this rule where the parties have financial needs, such as housing, which must be met from the assets that are available. It is often the case therefore that this argument is reserved for the wealthy, rather than those who have just enough assets to meet both parties’ needs.

Despite the majority of these high value cases resulting in the party in the weaker financial position receiving an adequate (some might consider £453m to be more than adequate!) settlement, there does still appear to be a slight shift in the financially stronger party’s favour. For example, in the anonymous case above the husband received 58.5% of the assets and the wife received 41.5%. In the Laura Ashley Chairman’s case, the wife claimed the assets were worth at least £205m and she received £64m, around 31% of the total assets. Conversely, in another recent case, a former US banker husband was ordered to pay his wife 50% of the £140m asset pot.

Such contributions are therefore not going unrecognised however these arguments will generally be limited to cases involving very wealthy couples and there is no clear test for how much the “stellar contributor” will be awarded should their argument succeed.

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