£453million divorce pay-out highlights potential of family mediation and pre-nuptial agreements
A recent case judged in a private hearing is believed to have led to the largest divorce pay-out in the UK of £453million. Sarah Pennicott, Family Lawyer, here reviews the case and explains why it has an impact on not only high-net worth individuals, but all couples considering a divorce.
The case in question revolves around a 61 year old billionaire husband and his 44 year-old wife, who have been given the right to remain anonymous. The couple met and married in Moscow before moving to Surrey. The husband was an oil and gas trader who built up a fortune in a Russian energy business. Approximately five years ago, he sold his shares in the company for 1.3 billion US dollars, or £1billion.
Following this, he bought both of their sons’ flats in a luxury London development; one costing £29million and the other £7million. He was also very generous with gifts, buying his ex-wife jewellery worth more than £300,000, giving her unrestricted access to two credit cards as well as use of a yacht, plane and helicopter. Throughout the 20 year marriage, she had been a ‘housewife and mother’.
Equal contribution to a marriage
Throughout the process, the wife stated that the total net marital wealth was just over £1billion, and had been accrued through ‘equal contributions to the welfare of the family’. The husband however, argued that he was wealthy before the marriage and that he had made a ‘special contribution’ to the creation of the wealth.
The Judge in the case, Mr Justice Haddon-Cave agreed with the wife that there had been equal contribution to the wealth and so awarded 41.5% of the total marital assets; equating to £453million.
“When reviewing a financial settlement in a divorce, a Judge will look at not only financial contributions throughout the marriage, but also the means by which a husband or wife were able to accrue that fortune,” explains Sarah. “In this instance, it is true that the husband contributed financially to the marriage, but he may not have been able to do this without the support from the wife at home looking after the welfare of the family. There were no good grounds to deviate from this element of divorce proceedings, and therefore the Judge awarded equal contributions.”
Sarah continues, “It is interesting to see however that even though the Judge ruled that there was equal contribution, the total figure of £453million is in fact only 41% of the total worth, not 50%. The husband did initially contest the pay-out figure; however this has been dropped so the award stands. If the husband had in fact been wealthy before the marriage, as he stated, it would have been prudent for him to consider a pre-nuptial agreement, a legally binding document which would have secured his fortune in the event of a divorce.”
Sarah concludes, “Most couples marrying do not see the need for a pre-nuptial agreement, as they are more relevant for high-net worth individuals; however they can be important for couples with several properties or investments. If a couple choose to divorce, no matter their financial arrangements it will be a highly emotional and distressing time, and arguments over their finances can occur, as in this case. Family mediation is a highly effective way to come to a mutually beneficial arrangement in a neutral and calm environment, meaning that both parties can move forward in their lives.”
If you are considering a divorce or would like to discuss your options for a pre-nuptial agreement or family mediation, you can contact Sarah or the Family team on 02380 717431 or email firstname.lastname@example.org.
This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.