When dividing assets on divorce particularly in ‘big money’ cases, the starting point is one of equality, i.e. a 50:50 division of all assets, including properties and pensions. Other factors must then be considered to include the length of the marriage, the ages of the parties, the respective contributions to the marriage, the marital standard of living, the financial resources available to each party and the ongoing financial needs once the couple secure financial independence.
But what if one party to the marriage has made a stellar or special contribution? Can that party argue that their ‘genius’ should result in an unequal sharing of the family wealth, particularly if such wealth results from his / her endeavours?
The press is currently following the divorce of Ryan Giggs from his wife Stacey Cooke, primarily in relation to Mr Giggs’ instructions to his legal team to pursue an argument in Court that he should receive more than 50% of the matrimonial assets due to his ‘genius’ on the football pitch.
Whilst the precedent for such a legal argument was set and indeed established by the man who earned his fortune from introducing black plastic bin liners to the UK, the strategy is risky. A Court is often reluctant to overrule the principle of equality, especially when there are children involved. Inevitably, litigation is expensive and so it will be for the lawyers on a case by cases basis to determine whether the argument has genuine prospects of success.
In the case of Michael Cowan, the creator of black bin liners, the Court of Appeal decided that he could keep 62% of his £12 million fortune. The judiciary referred to his “entrepreneurial flair, inventiveness and hard work”. By way of a further example, insurance magnate John Charman was awarded 63.5% of the £131 million fortune because “the wealth created is of extraordinary proportions from extraordinary talent and energy.”
These cases however are very much a minority. Indeed, a good number of husbands have tried and failed to invoke the ‘genius’ clause. There is an evident reluctance by the Courts to quash the long standing principle that contributions made by the homemaker are as valuable as those made by the breadwinner. However, if you have a fortune of millions, you might consider taking the risk?!
Law Correct as at April 2017
Article Written by Kate Stovold