In a year in which high-profile ‘special contribution’ divorce cases have hit the headlines, Spear’s Family Lawyer of the Year Emma Hatley explains how the argument has arisen and why it remains exceptionally difficult to establish.
Prior to the landmark House of Lords case of White v White (2000), financial relief upon divorce tended to be limited to ‘financial needs’, together with (where there was a surplus of assets) a capital cushion. White established for the first time that a claimant’s needs in ‘big-money cases’ – where resources exceed the needs of both parties – should not be the determinative factor.
In White, the House of Lords held that ‘equality should be departed from only if, and to the extent that, there is good reason for doing so’. It also held that when assessing each party’s contribution to the marriage, the wealth generator is no more valued than the homemaker or child carer.
The consequence of this landmark ruling was that divorcing couples in big-money cases had to resort to innovative arguments, such as the ‘special contribution’ argument, to persuade judges to depart from equality.
The argument has been successful on only a handful of occasions. In 2001, a bin liner entrepreneur persuaded the court that his contribution to the family finances was so exceptional that he should receive 62 per cent of the assets. In 2006, Sir Martin Sorrell successfully claimed it would be unfair to ignore his ‘genius’ as the generator of the family fortune through his media company, WPP, and was awarded 60 per cent of the £100 million marital pot. In Charman v Charman (2007), the court took into account the husband’s ‘remarkable’ abilities in the insurance world in awarding him 63.5 per cent of the assets. In Cooper-Hohn v Hohn (2014), the husband had set up a hedge fund and the court awarded him 64 per cent of the marital wealth of $1.5 billion.
Set against these, there has been a succession of cases in which special contribution arguments (usually advanced by husbands) have fallen short. In April 2017, multimillionaire American financier Randy Work failed to convince the Court of Appeal that he should be given credit for his ‘genius’ as an investor.
These unsuccessful claims demonstrate that amassing enormous wealth is not enough. An applicant must have demonstrated ‘exceptionality’ or ‘genius’ in generating that wealth and their contribution must have been unmatched by the other spouse’s contributions. It was hoped that the Court of Appeal’s judgment in Work would provide a financial threshold above which a special contribution would be self-evident, or would offer guidance as to what exceptional qualities special contributors must exhibit. In the absence of both, however, rich husbands (and wives) will continue to run the argument.
The original partner contribution in Spear’s can be found in the January/February 2018 edition.