English Divorce Law in Turmoil

England is a forum of choice for spouses with less assets to sue their internationally-connected wealthier spouses for divorce.

Until 2000 the English courts divided a married couple’s assets in a way that would ensure that the “reasonable needs” of the financially weaker party — usually the wife — were met. It meant that the spouse who had more assets in his name than his wife was able to keep most of them.

Everything changed in the famous case of White v. White. England’s top court, the House of Lords, ruled that the lower appeal court, the Court of Appeal, had got it all wrong for 25 years. The House of Lords ruled that it was wrong to limit a wife leaving a long marriage to no more than was needed for her “reasonable needs.” From now on, everything was to be determined by “fairness.” The problem is that “fairness” is an elusive term.

Then a famous soccer star, Ray Parlour, was ordered to pay his wife one-third of his future earnings for at least four years, plus a large lump sum, two valuable mortgage-free houses and a large annual sum for child support.

And in a case that has caused an outcry in England, an (American) woman who earned a good salary before marrying an English multi-millionaire, received a payoff of £5m for less than three years of a childless marriage in her divorce last year. The House of Lords will hear that case, Miller v. Miller, on January 30th.

The surprising situation in England results from several peculiarities of the English system.

The first is that in England the “pot” of assets that is to be divided includes everything that the spouses own, including everything that they each had before they got married. This is in sharp contrast with most legal systems which say that whatever you have on the date of the marriage stays yours unless you take specific steps to give it to the marital partnership.

The second difference is that the English courts place one party’s inherited assets into the marital pot.

Third, the English courts allow fault to govern the fairness issue. This allows each party to assert that the other party was the “wrongdoer” who should be financially punished for breaking up the marriage.

Fourth, England is one of the few places where lifetime spousal maintenance (alimony) payments are routinely ordered by the courts in favor of the spouse with fewer assets or less earning capacity.

Fifth, England uses the concept of the ‘clean break’ as an ideal way to resolve financial matters. It is intended to mean that one ex should not have to continuously chase the other ex for money. It’s a very nice theory, but well nigh impossible to put into practice.

Finally, to make matters even more unpredictable, prenuptial agreements are not legally binding in England, so that it is difficult or even impossible for a wealthy person to provide himself with predictable protection if he is considering marriage.

Now divorce lawyers and wealthy individuals are looking to the House of Lords to provide some clarification and fairness.