When a marriage turns messy

On 24 May 2006 the House of Lords handed down its judgment on two family
cases, Miller and McFarlane. ‘Wives Win Out’, ‘Landmark Victory’, ‘Law
Re-Written’ have been some of the headlines. But all is not as it seems.

Alan and Melissa Miller married in 2000 and separated in 2003. Their marriage
lasted for 33 months. Alan was 39 and Melissa 33. They did not have children.
When they met Melissa was earning £85,000 a year. She gave up work shortly after
the wedding. Alan was a successful fund manager and his net worth was around
£30m.

Following their divorce, Melissa was awarded a one-off settlement of £5m to
adjust to single life ‘without undue hardship’. The court took into account
Alan’s conduct in having an affair, which ended the marriage. Alan appealed.

The Lords upheld the payment of £5m but made it clear that the affair was not
relevant and that, in future, courts should only take conduct into account where
it would be inequitable to disregard it.

In a separate case Kenneth and Julia McFarlane had been married for 19 years
when they divorced in 2003. They had three children and net assets of £3m. Julia
McFarlane had given up a career as a City solicitor to be a full-time mother,
and Kenneth McFarlane was head of corporate tax planning at Deloitte. They were
both 44. They agreed to divide their capital assets equally but could not agree
on the division of Kenneth McFarlane’s net annual income of £753,000.

The Lords ruled that Julia should receive annual maintenance of £250,000
during their joint lives, holding that courts must now look at the financial
needs of both parties.

Marriage is a partnership of equals and when it ends each partner is entitled
to an equal share of the assets of the partnership unless there is a good reason
to the contrary.

What is clear is that all family cases are considered on their own facts and
merits, and that no two cases are the same.

What is important, now more than ever, is to obtain legal advice as to your
rights and obligations both before marriage and also at an early stage of
separation.

Both men and women need to give serious consideration to entering into
prenuptial agreements and other means of asset protection. In certain
circumstances, such agreements can be extremely influential and it is important
to seek specialist advice before drawing one up.

In relation to both cases, the emphasis was on attempting to find a fair deal
for both parties. As we all know, fairness is an elusive concept!

Charlotte Ballard Scott is a partner at law firm Kingsley Napley