SHARING OF WEALTH IN DIVORCE TO BE REVIEWED
Released On 3rd May 2023
Justice Minister Lord Christopher Bellamy has said that he plans to ask the Law Commission to examine whether the Matrimonial Causes Act 1973 needs updating.
The current law is, in the words of celebrated divorce lawyer Baroness Shackleton, “hopelessly out of date”.
This is hardly surprising, as the rules are 50 years old and were drafted at a time when it was generally accepted that the role of women was to stay at home after having a family.
England, and London in particular, has become known as the divorce capital of the world. This is because many ex-wives know they will get a more generous settlement in England than in other jurisdictions as is evident from a review of the significant sums recently awarded in several high-profile cases.
For example, Sheikh Mohammed of Dubai was ordered by the English courts to pay a settlement to his wife, Princess Haya, of £554 million last year – believed to be the largest ever divorce settlement secured in the UK.
The English courts are unusual in operating a system whereby a homemaker at the end of a long marriage might reasonably expect to share a full 50 of the other party’s wealth, as long as it was generated during the marriage, without having necessarily had to contribute directly to its creation.
In some cases, one spouse attempts to hide their assets from their partner, such as Farkhad Akhmedov, who concealed wealth to get out of paying his ex-wife Tatiana a settlement of £453 million.
Even if no wrongdoing is suspected, so-called “big money” cases justify the appointment of a forensic accountant to explain to the court what are often complex corporate or trust structures. Issues of tax and liquidity are often very important and need to be properly understood if there is to be a fair outcome.
Roger Isaacs, Forensic Partner at Milsted Langdon, said: “An increasing number of high-net-worth divorcing couples have financial affairs that involve a number of overseas jurisdictions.
“Forensic accountants play a vital role in helping the courts to understand these international issues especially as regards taxation. They can also shed light on which assets may be capable of being realised to fund settlements. In extreme cases, they can help enforce settlements in the UK and abroad by taking on the role of Court Receiver.”
