London could lose its reputation as the divorce capital of the world, lawyers have warned after details of a High Court judgment involving the largest settlement of its kind were published last Friday.
City financier Sir Christopher Hohn (pictured) was ordered to hand over $530m (£339m) from available assets of just under $1.5bn (£958m) to estranged wife Jamie Cooper-Hohn. Cooper-Hohn had argued that she was entitled to half of her husband’s assets, while he proposed she receive only a quarter.
Describing Hohn as a ‘financial genius’ in his field, Mrs Justice Roberts acknowledged the need to ensure Cooper-Hohn’s contribution to the marriage was reflected in the share of assets she received, but said she could not ignore ‘the extent of the very significant post-separation accrual in this case’.
‘That factor, taken together with what I have found to be a special contribution on the husband’s part during the marriage, leads inevitably to a departure from equality of outcome,’ she said.
While the award is believed to be the highest of its kind made by a judge in England, Rayner Grice, head of the Birmingham family law team at Clarke Willmott, said the departure from a 50-50 split will lead couples to look more carefully at which jurisdiction in which to issue divorce proceedings.
‘Some eight years have passed since the court recognised the principle of special contribution as justifying an award of 36.5% in Charman,’ she said.
‘Prior to that the courts had ensured the absence of discrimination between the wage-earner and the child-carer by recognising non-financial contribution in the case of White. This led to London gaining a reputation as the “divorce capital” because of its generous awards.
‘This means that England may, perhaps, be less enticing to the homemaker as the jurisdiction to determine awards, as the ability to raise arguments to depart from equality have resurfaced after many years of the yardstick of equality being the overriding principle.’
Marilyn Stowe, senior partner at Stowe Family Law, said it was ‘distasteful and distressing for any wife who has put her all into the marriage for a court to find her contributions do not match those of her husband’. She added that it is ‘inappropriate to make such a distinction in the 21st century, no matter the net worth’.
‘Marriage in the eyes of the law should be a partnership of equals, irrespective of their individual characteristics and abilities. It is marriage which should have the greater value in the eyes of the law, not eye-watering sums of money.’
The judgment could lead to greater use of arbitration, Grice suggested, ‘to look at resolving specific issues such as special contribution, without having to go through lengthy hearings’.
‘People get put off because they have to pay for arbitration,’ she added. ‘But if you can identify and deal with a specific issue at an early stage, it may be cost-effective in the long term in terms of what you’re paying in legal costs.’