£453 million divorce settlement

Special Contribution worth £453 million divorce settlement?

If you were to pin down the fundamental starting point for divorce law in this country, it would be this:

The breadwinner and the homemaker make equal contributions to the family’s wealth. Whilst the stereotypical husband might bring home the cash, he simply would not be able to do so if it wasn’t for the support at home from the stereotypical wife. Therefore, when dealing with a family’s capital assets, the starting point should be an equal division. Thereafter, consideration must be given to other factors (link: s25 factors) to argue whether that equality should be departed from.

As we have previously blogged (link), Ryan Giggs intends to have a shot at the argument that he should receive the lion’s share on the basis of his ‘special contribution’ to his family’s wealth, over and above that of his wife’s.

A recent judgment of the High Court, AAZ v BBZ, C Ltd and P ltd, awarding the eye watering sum of £453 million to the wife (the ‘financially weaker’ spouse in this case) can be seen as the latest step in the conversation on this issue.

Whilst £453 million is undoubtedly big money, it is still only around 41% of the fortune. There has, therefore, been a departure from equality in favour of the wealthier party.

Could this all be looking good for Mr Giggs and the rest of the wealthy husbands in this country, looking to argue their genius?

Well, in short, no. In making the judgment, Mr Justice Haddon-Cave ruled that both spouses had indeed made equal contributions to the family’s wealth. In this case, there were no good grounds to a departure from equality of the matrimonial property. The reasons for the quantification of the wife’s award are complex and would justify an entirely separate blog post.

On the relevant point in the ‘special contribution’ debate, this judgment is another resounding statement of the difficulties facing those trying to make that case.

Ultimately, for the financially weaker party in high net worth marriages, England and Wales is still the place to divorce.