Influence public, legal and political opinion
Take a test case to the
House of Lords followed by an appeal to the Court of Human Rights
in Strasbourg if necessary
Change the law relating to divorce
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A deceptiveley simple question. It appears to be generally accepted
that marriage is a partnership in the legal sense. If that is the case
then it must be arguable that when two parties enter into a
partnership, unless the terms of that partnership have been specifically
agreed it is implicit that the assets and goodwill accumulated by that
partnership relate to its implied scope. To take a specific example, let
us suppose that two men wish to enter into a partnership as solicitors
(wrecking and the slave trade having been made illegal).
They rent
premises, print stationery, buy equipment and employ staff. If one of
the partners in due course lands an extremely lucrative case then it
is totally
unacceptable if he attempts to put the proceeds from that case into his
own personal bank account. Clearly, these proceeds are
the property of the partnership. Let us suppose, however, that out of his
own taxed
earnings from the partnership he decides to buy a cottage by the seaside
which he duly purchases in his own name. After a period of twenty years
this cottage’s value vastly exceeds the cost of acquisition. Could
his partner, therefore, legitimately claim a share of the cottage? The
answer is categorically no. The same must logically apply to a marriage.
Specifically, if two parties get married, one of whom owns a business
then quite clearly the assets of that business belong to that person rather
than being part of the marriage partnership. What has happened in practice
is that the Courts (which arguably are the last bastion of socialism in
the UK) have decided that it would be "fairer" if the other spouse had
a share in this business. Why? Well, why not - he can afford it! But life
itself is unfair. Some people are born wealthy and good looking and some
are not.
Some people have the energy and determination to make money. Others prefer
to while away their lives down the pub or be parasites on those
who create wealth. What has fairness got to do
with it? Barclays Bank has lots of money - why can’t we all have a share
in that? Bill Gates is immensely wealthy. Wouldn’t it be nice if we all
had some of his money? Any sensible person knows that such arguments are
hopelessly naïve and idealistic and that no sensible person would put them
forward - except the UK divorce Courts, that is.
Firstly it should be pointed out that the law in Scotland is different
and we are only interested in England and Wales which are
covered by the Matrimonial Causes Act of 1973 ( as amended). The
division
of assets is set out in Section 25 of this act. There is a useful summary
of the main
principles applicable provided by Messrs Terry & Co, UK Solicitors, on their
website under
Matrimonial Causes Act
Subsequent to this the law has been modified by a decision made in
the White case which went on appeal to the House of Lords. This appeal
established the
principle that the starting point in the division of assets should be 50:50.
The circumstances of the White case were somewhat special. This was a
marriage where both parties had married without any kind of
significant assets or business and had together built up, over a period of
some 30 years, a business based round a farm. They also had a large
number of children. In the circumstances the Court decided, perhaps not
surprisingly, that this was a joint effort. The assets involved were in the
region of £4M or £5M and this does not appear to be an unfair
verdict.
The problem is that the courts subsequently have taken this as a
starting point for divorce cases of very different circumstances. This is
particularly unfair where one party is extremely wealthy, which brings us
to the Miller case. The husband appealed to the House of Lords in January
2006 and a decision has just been made (May 2006). The
headline
facts in the Miller case are that a man with a net wealth in the region of
say £30M married a young woman who was previously able to earn some £80,000
per annum and who lived in a rented flat. The marriage ended in less than
three years with no children. After an appeal to the Court of Appeal
the wife was awarded £5M which, as the Defence Counsel in the Lord's appeal
pointed out, amounts to some £5,000 per day for each day that she was
married.
Another case currently before the House of Lords is the MacFarlane case.
Ken MacFarlane, a partner with accountants firm Deloitte Touche Tohmatsu, is
appealing against the £250,000-a-year maintenance awarded to his wife,
Julia,
and the decision to divide their £3M family assets equally between them.
The House of Lords will have to set a value for Julia’s contribution to the
marriage as she evidently gave up her career to look after their three
children.
STOP PRESS
The House of Lords has now handed down decisions in the MacFarlane and
Miller cases. In each case they have turned down the appeal, i.e.
Melissa Miller will keep her £5M and Julia MacFarlane will receive
£250,000 a year for life or until the Court decides otherwise. Clearly
the trend towards favouring the less wealthy partner continues and,
as several lawyers commented after the case, the House of Lords is now
sending out an extremely clear message - “Do not even think of
getting married. If you do we will crucify you financially.”
There would appear to be a number of factors at play:
There has been a natural reaction against the days when
ex-spouses could be discarded relatively casually. Nobody
rational wishes to see a return to situation where people are
treated cruelly, but the current
situation, where people who have earned wealth purely through their
own efforts are ruthlessly exploited, is unacceptable.
If an ex-spouse is awarded a few million pounds then each lawyer
concerned may well collect £100,000 or so in fees. If payouts
were substantially lowered from wealthy estates then inevitably
the level of fees which lawyers could reasonably justify would
drop substantially. Nobody sensible is suggesting that there is
some kind of conspiracy here. Lawyers don’t meet together secretly
at midnight working out ways to increase their fees ( 8.00pm in a
bar is more normal), but more to the point, they most certainly
do not attempt to reach a situation where the general level of
payouts is reduced. Bear in mind that lawyers are hired guns and
any competent firm of divorce lawyers will be simultaneously acting
for a number of cases where they are, in effect, acting for different
sides of the argument. Quite literally, a divorce Counsel could
find himself in Court one day arguing that it was inequitable for
a wealthy spouse to pay out a large amount of money, and then the
next day arguing that a different wealthy spouse should pay out a
large amount of money! It is inevitable that this situation makes
it impossible for a lawyer to take an extreme partisan position.
One day they are outside throwing stones at the glass house.
The next day they are inside another glass house trying to protect
it from a different mob of stone throwers.
Although any number of wealthy (or post-divorce less
wealthy) spouses have grumbled bitterly against the system,
nobody appears to have made any kind of serious move to change it.
Like frogs being slowly boiled alive we sit there cooking rather
than jump out.
This is nothing to do with the gender of the protagonists. There
are many high earning women in the City and in other jobs and it is
totally iniquitous that in the event of their divorce they are expected
to pay out millions of pounds to men who have made no contribution
towards their success. Indeed, in the case of many women, they have
also taken on the burden of bearing children and bringing them up - so
they are facing a double penalty. Not only have they had the major
responsibility of bringing up a family but they are the major breadwinner
as well. This situation is especially inequitable.
Unfortunately it is a matter of fact that in the majority of high
value divorces it is the husband who has accumulated the wealth and so
inevitably, when people discuss a high value divorce they tend to think
in terms of “wealthy husband and ex-wife”.
Let us suppose for the sake of argument that an extremely wealthy
businesswoman marries a man of modest means. Prior to the marriage she
has run her company in a manner which suits her own personality and
objectives. She makes decisions, signs contracts and cheques, and
generally gets on with it.
So, when she gets married does anything change? Does the new husband
become a signatory on the bank account? Only if she wishes. Does
he take part in the decision-making process? Again, only if she
wishes. In other words, at the date of marriage, she is in control
of all her money and assets. So does that change during the course
of the marriage? The simple answer is it does not. Ten or twenty
years later, if they are still married, unless she chooses otherwise
she is still in exactly the same position. She can carry out
major transactions involving large sums of money. None of the
lawyers or counter-parties will demand the husband’s signature, nor
will they be the slightest bit interested in whether she is married
or not. Accordingly, on any normal understanding of English, it is
quite clear that even after a substantial marriage the wealthy party
is still in total control and ownership of the assets. If that were
not the case then in any significant transaction the other side’s
lawyers would demand the husband’s signature. So far so clear.
Let us now assume that the husband decides to run off with
a younger woman and also decides that it would be appropriate for his new
lifestyle to be financed by his previous wife. He rings up his lawyer
who tells him that this is an excellent idea and that he will receive
the full support of the UK Legal System in this venture. Accordingly
he sues for divorce. Suddenly it now appears to be taken for granted that
in principle half of his previous wife’s assets are his. So what
has happened?
What has happened is in fact quite clear. At the point of divorce,
the Legal System suddenly steps in and decides to confiscate a large
proportion of his ex-wife’s wealth. Let us not mince words here.
Divorce is about confiscation of assets from the wealthy party.
[Acknowledgments to Warren Buffet who was the first
person to ask the question, “If stock options are not a cost then
what are they?” The formulation of this question has brought about
a major US accounting change]
To explain this question let us set out the case as put forward by a
reader of this website.
“When I got married I had for many years owned and run a successful
business. My wife to be was a scientist of considerable ability who was
a well respected Professor of Chemistry at a major UK university. Sadly
our marriage ended and the Courts, as is their apparent wont, arbitrarily
decided that a substantial part of the assets which I had built up as a
result of my business activities should be awarded to my wife on the
argument that this was somehow a joint venture. This despite the fact that
my wife had no interest in the business and made no contribution to it.
Now, in the course of our marriage my wife had a number of major research
articles published which established her reputation as a major scientist
in her field. As it happened, I failed ‘O’ Level Chemistry but it seems
to me that the argument which suggests that my wife should somehow share
in the reward from my activities applies directly in the converse direction,
namely that I have just as much entitlement to share in the glory of my
wife’s scientific papers. Specifically, therefore, why cannot I request
the Courts that they order that the authorship of all her scientific papers
should include me as an equal contributor? The reason I am making this
point is that any sensible person reading this would realise that this
is a ludicrous request. Well, I would contend that it is equally
ludicrous that my wife should somehow share in the results of my many years
of hard work and ingenuity."
Quite!
Again, to explain this question let us set out the case as put forward by a
reader of this website.
"I understand that if I am enormously wealthy and get a divorce then my wife
may well be entitled to a large proportion of my assets even though she has
played no part whatsoever in acquiring them. In the event that I were to
get divorced enormously in debt, do I take it that my wife would be allocated a
large share of my debts? After all, if this is supposed to be some form of
legally constituted partnership then assets and liabilities should be shared
equably. Or is this just socialist redistribution of wealth?
You said it!
“A lawyer can steal more with a briefcase than 100 men with guns” The Godfather by Mario Puzo
Well, parting from somebody you have spent a long time with, even if you don't get on too well can be very upsetting. The process is made considerably worse by the conduct of lawyers who deliberately raise the temperature. They do this for a number of reasons:
If you are a divorce lawyer and you feel that this is a little unfair then
you will have a slight taste of what your clients experience.
Clearly, divorce legislation should be changed so that people who operate
in a sensitive, conciliatory and helpful fashion achieve better results
for their clients than those who operate at the extremes of human decency.
Divorce can be worse than bereavement for many people. In a bereavement
everybody is extremely sympathetic, you have fond memories of the
deceased and in time you can start to move on with your life,
although clearly this is extremely painful.
In the case of a divorce, however, you find that
not only have you lost the person whom you love and around whom your life
revolves, but this person has now become your worst enemy and, encouraged
by greedy and ruthless lawyers, is telling lies about you hoping to
discredit you in the eyes of the Court. As if that were not bad enough,
on top of that they are trying to destroy you financially and take away
assets which you have acquired purely through your own efforts and may
well indeed have introduced into the marriage in the first place.
FIDO's Objectives are to:
Influence public, legal and political opinion
Take a test case to the
House of Lords followed by an appeal to the Court of Human Rights
in Strasbourg if necessary
Change the law relating to divorce
FIDO's Proposals are:
There should be a cooling-off period during which a couple would be
encouraged to obtain professional help. During this period the
only permitted legal steps would be to ensure that both parties
can survive appropriately given their financial circumstances. If at the
end of that period one party still wants a divorce then so be it.
Marriage should be "financially neutral"
so that in the event of a divorce (after reasonable provision has
been made for any children) both parties would be put in the state
in which they could reasonably have hoped to be in the event that
they had not got married.
Pre-nuptial agreements should be made binding in the way that any
commercial contract is binding (ie the courts uphold the contract
unless it is overwhelmingly onerous but certainly do not arbitrarily
rewrite it to make it "fairer" with the benefit of hindsight)
This is not the intention! The reference to cranes, of course, refers to
the Fathers4Justice campaign which a senior QC has been quoted as saying
has had a substantial effect on the way that the law has been interpreted in
the courts. Accordingly there is no question that that particular campaign
has achieved at least part of its objective.
Our campaign is likely to start by finding
political and media figures who are able to influence public and legal
opinion. Clearly the results of the Miller and MacFarlane cases currently
being heard before the House of Lords will be material. We would hope to
inspire a steady stream of newspaper, magazine,
and other articles as well as radio and television programmes. If you can
assist with this process your help will be very much appreciated.
There are appropriate links in
information for applicants
Before one can appeal to the Court of Human Rights one must have exhausted
all of the appeal processes. To quote from the website:
“You must have used all the remedies in the State concerned that might
have been able to redress the situation you are complaining about
( usually,
this will mean an application to the appropriate court, followed by an
appeal, where applicable, and even a further appeal to a higher court such
as the supreme court or constitutional court, if there is one).”
In the UK this means an appeal to the House of Lords. The whole process could
easily take several years.
There are a number of legal grounds for believing that UK Divorce Law
contravenes Human Rights legislation and we believe that an appeal to
the Court of Human Rights in Strasbourg would be successful.
Apart from the legal arguments, anybody with experience of the law
knows that in practice courts invariably start from the premise that
they are there to administer justice and fairness and then make the law
fit round that framework. The European Court at Strasbourg is no exception
and appears to give surprisingly sensible decisions. Why is that
surprising? Mainly because we have all been brainwashed into believing
that "British Justice is the envy of the world". Well, it is if you
are a spouse looking for a meal ticket for life. Certainly our
law is the most extreme in Europe and "Harmonisation" would suggest that
our law should converge towards the average.
That may be true but it is my belief that the majority of normal,
decent people ( and I think an analysis would show that people who
vote are normal, decent people)
find the idea of undeserving spouses collecting huge sums of money
for no good reason repellant.
As for the assertion that Parliament will only change legislation
when there are votes in it, this may be excessively cynical. In the long
term legislation tends to move in a sensible direction and we hope that
this will prove to be the case with divorce law
Our objective is to introduce a
private member’s bill
to ensure that high value divorces are handled sensibly. Whether
MPs will vote for it and the attitude of the
Government are all matters for conjecture. Certainly we can try.
Back in the early eighties, I managed to get the law relating to the rating of
empty industrial and warehouse buildings changed and that was surprisingly
easy. I made my case to the relevant parties and within a few months the
law was changed in line with my suggestions.
The only people likely to start a campaign like this are people who are already in the process of getting a divorce or feel that it is likely that this may happen in the near future. Those who are unmarried, or happily married, are unlikely to even think of mounting such a campaign. Anybody in the middle of a divorce will undoubtedly be told by their lawyers (as I have been) that by mounting a public campaign of this nature they risk antagonising the Courts making their own situation worse. Having said that, somebody had to do it so I guess I drew the short straw.
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If you are a substantial political donor make
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( we all know, of course, that political parties are not
influenced by money but doubtless they will listen to what you
have to say )
Write to
your MP
Help us by using whatever skills and influence you may have.
I would be delighted to meet you either in the North West or in London
if that would help
By registering you are showing your support for our campaign and one
day this may save you a lot of money. We are not looking for charity and
sympathy but hard headed people who are prepared to help themselves. If we
do nothing, nobody else is going to help. We are on our own.
We will keep you in touch by Email and you will be able to use the forum
which should be operational shortly
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Fairness In Divorce Organisation
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Site revised on 30th June 2006
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