When divorce doesn’t mean it’s over

They divorced in penury a quarter of a century ago. But a judge has ruled that the wife is entitled to £1.9m of her ex-husband’s new fortune. Can that be right? Simon Wilson reports.

What’s happened?

A remarkable court judgment against a wealthy businessman, whose ex-wife is seeking financial support from him decades after the relationship ended, has led to fears that it could be “open season” on rich ex-spouses.

Last week, the UK Supreme Court granted Kathleen Wyatt the right to seek £1.9m in maintenance from her ex-husband Dale Vince (pictured), the multi-millionaire businessman behind green energy firm Ecotricity – despite the fact that they separated in 1984 and divorced in 1992, when neither of them had a penny to their name.

When the pair married in 1981 (the groom aged 19, the bride 21) and throughout their marriage, Vince was a new age traveller and eco-campaigner; the pair survived largely on benefits. Only after the divorce did he begin to build up a green energy company that over the course of 20 years has earned him a fortune estimated at more than £100m. By contrast, Wyatt has remained on a low income.

How can she claim after so long?

Because she says there was no final financial settlement agreed at the time of the divorce. Vince disagrees: he reckons that there was a legal agreement, but that neither he nor the courts have kept the documents that would prove it. The pair also have different accounts of what support Vince paid towards his son, now aged 32, who has been living and working with his father since the age of 17.

Either way, over the course of four years of litigation, the lower courts had dismissed her case on the grounds that it was too “old” to proceed. The Supreme Court has now overturned that and ruled it must be heard.

The judges stressed that Wyatt is certainly not entitled to the full £1.9m she wants and said that the claim may yet be dismissed entirely. However, there is “a real prospect she will secure a comparatively modest award, perhaps of a size enabling her to purchase a somewhat more comfortable mortgage-free home”.

What was the reaction?

Vince, who has already had to pay Wyatt’s £500,000 legal fees, described the ruling as “mad” and “baffling”, and said it signalled “open season for people who had brief relationships a quarter of a century ago”. Some lawyers agree. James Brown, a partner at JMW Solicitors, told The Times he expected “many thousands” of people to explore whether they can make financial claims against former spouses in the light of the ruling.

Only a third of all divorces between the start of 2009 and last year involved financial orders, which have become known as “financial full-stops” – meaning that two-thirds of divorcees could be affected. “The fact that there is no limit on when someone can make a claim will arguably make it even more attractive. It doesn’t matter whether you divorce in your 20s and return with a claim when you’re 80,” he said.

Do all m’learned friends agree?

Of course not. William Healing, partner at Kingsley Napley, reckons the Vince case is too unusual to set much of a precedent. “It will be a long time before a budding entrepreneur is as laid-back or ill-advised, or just plain unlucky as this husband/father about their legal paperwork,” he said in The Independent. Another case to make headlines recently – that of Ian and Tracey Wright – offers more comfort to high-earning divorcees.

Last month a court agreed with Ian Wright, 59, a wealthy equine surgeon, that his 2008 divorce settlement was unfair: the £75,000 a year he pays his ex-wife will now be reduced as he approaches retirement, and Tracey Wright, 51, was told in forthright terms by the judge that she should find herself a job. Divorce lawyers say they now expect more men to go back to ask the courts to cut annual maintenance payments to former spouses who could work (see below).

Will this affect London’s ‘divorce capital’ status?

It’s unlikely. The headline-grabbing cases involving rich wives eager to divorce in London (due to English law’s treatment of the non-breadwinner) are “clean break” settlements where the wife’s future earning capacity is neither here nor there. One current case involves Malaysian fashion billionaire Khoo Kay Peng and his wife of 43 years Pauline Chai.

They have homes in five countries and have spent millions of dollars in legal fees wrangling over whether they should divorce in Malaysia (his preference) or England (hers).

“People are a lot more international than they used to be, and there’s just a lot more money sloshing around,” said Timothy Scott, the lawyer who represents Peng. So London is likely to remain an attractive location for non-breadwinning spouses mulling a break-up.

Ayesha Vardag, who represents Chai, has some simple advice for wealthy breadwinners with a choice of jurisdictions: “hop on the Eurostar and get over to France, where the laws are very different”.

England’s unusual rules

In England, maintenance is an open-ended lifetime commitment – a striking contrast with the rest of Europe, where it is usually time-limited (in Scotland it is generally limited to three years, after which the woman is expected to be independent). “Some women in a divorce have not wanted to maximise their earnings capacity in the past because of the maintenance issue,” lawyer Camilla Baldwin told the FT.

The Wright ruling has the effect of upsetting that calculation. “In other jurisdictions, it is the exception rather than the norm that women should be supported after divorce and there is a presumption that women will work towards early self sufficiency,” said lawyer Charlotte Posnansky. The ruling in the Wright case “is the first step in that direction here”.

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