When splitting assets in divorce, the courts cannot discriminate between husband and wife based on their respective roles during the marriage. This has been the situation since the case of White v White in 2000. The role of the homemaker is considered equal to the role of a spouse working outside of the home.
Since that time however, a small handful of cases have allowed a spouse to claim more than half of the matrimonial assets based on an extraordinary contribution to the creation of wealth within the marriage. This has been referred to as a stellar contribution or a level of genius.
We look at how the courts split assets on divorce, the meaning of a stellar contribution and when this might be enough to allow an exception to the presumption of a 50:50 split.
How are Assets Split in Divorce?
When splitting assets in divorce, the courts will prioritise the needs of any children involved. Beyond that, they will aim to meet each party’s reasonable financial needs. In assessing these needs, the courts will take into account the following points, contained in section 25 of the Matrimonial Causes Act 1973:
- The income, earning capacity and financial resources available to each party, both now and in the foreseeable future
- The financial needs, obligations and responsibilities each party has, both now and in the foreseeable future
- The standard of living enjoyed by the parties during the marriage
- The parties’ ages and the length of the marriage
- Any physical or mental disability that either party has
- The contributions made by each party to the welfare of the family, including the contributions of caring for the home and children
- The conduct of either party where it would be inequitable to disregard it
- The value of any benefit that either party will lose because of the divorce, such as pension entitlement
In the case of White v White, The House of Lords said that all property was available to be divided in divorce and an award should be made using ‘the yardstick of equality’, with no distinction made between the roles of homemaker and breadwinner. This means that there is a presumption that the starting point for a division of assets is 50:50.
When Can You Claim a Stellar Contribution in Divorce?
On rare occasions, the court may be persuaded that the contribution of one party has been stellar or exceptional. This goes beyond simply working to accumulate large wealth and requires the individual to have done something remarkable in building up the assets involved.
This type of claim is reserved for cases where considerable wealth has been amassed. In considering the case, the court will look at:
- Whether the spouse claiming that they have made an exceptional contribution was a generating force behind amassing the assets
- Whether innovative vision was involved and acted upon to create wealth
- Whether the level of wealth is sufficient to be classed as exceptional
- Whether the spouse claiming stellar contribution has a unique skill or ability
- Whether it would be inequitable to ignore this contribution when dividing the matrimonial assets
The court will usually need to be satisfied on all of these points if it is to adjust the 50:50 split based on a stellar contribution.
Stellar Contribution Cases
While several individuals have tried to claim that they have made a stellar contribution, only a handful have been successful. The initial case in this area of law was that of Michael Cowen, who made a fortune of £12 million by introducing black bin bags to the UK and who owned a successful plastics company.
In 2001, the courts awarded his wife only 38% of the couple’s assets. He kept 62%, with the appeal court saying that ‘his contribution, in terms of entrepreneurial flair, inventiveness and hard work, was truly exceptional.’
In 2005, advertising guru Sir Martin Sorrell secured 60% of the joint assets of £75 million, with the judge saying that he was ‘regarded within his field and the wider business community as one of the most exceptional and most talented businessmen.’ Mr Justic Bennett went on to say that a ‘spark’ or ‘seed of genius’ was behind the success.
However, several claims have failed. In 2015, US private equity banker Randy Work tried to claim that he had made an exceptional contribution to the marriage and that he was therefore entitled to more than half of the couple’s £140 million fortune.
The court found that his contribution was not ’wholly exceptional’ and that he was not a financial genius. His wife was a ‘highly intelligent’ woman who had left her career to go to Tokyo with her husband where he had made a fortune during the Japanese financial crisis. The court of appeal said that it would be ‘unjustifiably gender-discriminatory to make an unequal award. This was a marriage of two strong and equal partners over 20 years.”
It was also noted that ‘A successful claim to a special contribution requires some exceptional and individual quality in the spouse concerned. Being in the right place at the right time or benefiting from a period of boom is not enough.’
Similarly, Laura Ashley's boss, Khoo Kay Peng failed to reduce his wife’s share of their assets to £9 million, with a court awarding her £64 million.
Financial Orders on Divorce
It is crucial to address the issue of the division of assets in divorce. Without a court order, there is no time limit for your spouse to make a financial claim against you, meaning that they could ask for assets to be split long into the future.
We provide expert representation for financial claims. We have a strong track record of success in securing substantial awards for our clients, including in complex and high-value cases.
Contact our Family Law Solicitors
Our family law solicitors have many years of experience in dealing with the division of assets in divorce. If you are facing the breakdown of a relationship, you will find our team to be supportive and helpful while taking immediate steps to protect your position and ensure that you secure the settlement you are entitled to.If you would like to speak to one of our family solicitors, email us at info@witansolicitors.co.uk or fill in our contact form and we will talk through your situation with you and discuss how we can help.
