Till Dosh Us Do Part by David Rowan

© 2005 The Sunday (London) Times Magazine

Reproduced under the Fair Use exception of 17 USC § 107 for noncommercial, nonprofit, and educational use.


 

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Dosh definition

Split personalities

 

Divorce settlements have become ludicrously expensive. So who'd ever want to get married? An imminent High Court battle — and a raft of similar cases — may make matters worse.

October 9, 2005 — Marriage came at a price for Alan Miller — £4,935.83 a day, to be precise. The 2 3/4 years the 41-year-old fund manager shared with his American-born wife, Melissa, did not produce any children, but she gave up her £85,000 job anyway, to divide her time between their newly refurbished Chelsea town house and the villa in the south of France. So when the Court of Appeal ruled this July that Melissa Miller, 36, should leave the short, ill-fated marriage with £5 million of her husband's wealth, a flurry of consternation swept through London's legal establishment. Why, demanded eminent Queens Counsels and £350-an-hour family lawyers, were the judges once again hammering a rich husband simply to fund an ex-wife's lavish lifestyle? What attraction would matrimony ever hold to high-earning men if even a brief, childless union could imperil assets accumulated well before they tied the knot?

The prospect of divorce has in recent years begun to terrify rich British men. In a series of landmark cases since 2000, the divorce courts in England and Wales have given nonearning divorcées expectations of ever-greater stakes in their husbands' fortunes. Not even American-style prenuptial agreements can protect them: despite the growing popularity of "prenups" over here, the courts are not obliged to enforce them.

For centuries, the divorce courts have favoured the man in his role as traditional breadwinner, awarding him the bulk of the marital fortune once the wife's "reasonable requirements" for day-to-day living have been met. It took a ground-breaking House of Lords judgment five years ago to challenge this historic bias. The case did not, as you might expect, involve celebrities slugging it out over the rights to ownership of yachts or villas. Instead, it focused on an extraordinarily low-profile couple who had built up a dairy farm.

As a result of this judgment, equality would be the new yardstick in divorce settlements. The nonworking homemaker and child-rearer would have as much right to the family wealth as her husband. Since then, senior judges have issued increasingly wife-friendly rulings, forcing husbands to cede ever-larger stakes in their future income, and encouraging wives' lawyers to target even the man's inheritance. Independently wealthy women, too, face greater uncertainty about what happens to their money after divorce. But almost all the significant cases to have reached court so far have focused on just how much the husband will have to hand over.

These high-profile judgments are redefining divorce law in England and Wales, establishing constantly shifting rules for the thousands of "big money" break-ups that settle quietly out of court. (The law differs in Scotland and Northern Ireland.) The lawyers, meanwhile, are constantly seeking to test the boundaries to optimize their clients' financial position. As a result, large numbers of cases are being thrashed out in court.

Now some of our most senior family lawyers are speaking out. The new judicial mood, they suggest, threatens to weaken the institution of marriage itself. If ambitious, high-earning men see the legal odds stacked against them as never before, why, the lawyers ask, will they ever risk marrying in the first place?

As Alan Miller sees it, he has been the victim of legally sanctioned burglary.

"It's as if someone's come into your nice home, taken away a lot of its contents, and then the police have come round and said, 'We've found the thief, but sorry, you're rich, so there's nothing we can do.' This is so ridiculously unfair and discriminatory."

Not that Miller cannot afford a £5 million payout: as manager of a large City hedge fund, he earns up to £3 million a year, owns a £6 million house in Chelsea, and in March 2000 received £20 million following the earlier sale of Jupiter, a previous employer, to Commerzbank. Then there were the 200,000 shares he received on joining his current employer the following January, potentially worth a further £20 million. But these windfalls, he says, were negotiated well before the wedding in July 2000, and owed nothing to Melissa's contribution as his wife. Only a "gross injustice," he adds, could explain how she could leave the marriage after just 1,013 days with his former £2.3 million Chelsea house and a £2.7 million lump sum. That, the court calculated, would give her a lifelong annual income of £98,000 tax free, enough to "live to a very tolerable standard."

"It's ridiculous that a third of my assets at the time of the marital breakdown, which were all earned prior to the marriage, should be given to my wife," Miller protests at the Park Lane office of his solicitor, Raymond Tooth, in his only interview since the Court of Appeal ruling. Tooth is seeking to challenge this ruling in the Lords.

Lord Justice Thorpe, in the appeal court, recognized that Miller's wealth had afforded his wife an unusual degree of luxury: previously, Melissa had lived in a one-bedroom rented flat while working for a pharmaceutical company in Cambridge. But through marriage she gained "a legitimate entitlement to a long-term future on a higher plane of affluence," the judge ruled.

"Yes, we went on expensive holidays, and she enjoyed buying expensive clothes or shopping for antiques in the south of France," her former husband recalls. "I never realised that if it didn't work out there would be a financial penalty for my being generous."

"She worked for half of the marriage and had a relaxing time for the other half, spending much of her time shopping for the house I bought in France." He shakes his head, and sighs in cynical exasperation. "You know, her e-mail address starts off with 'Must-do-lunch-Melissa.' And she's never bothered changing it."

This is, of course, just one interested party's account. Melissa, approached through her solicitor, did not respond for this article, but the judge in the initial court hearing, Mr. Justice Singer, was in no doubt that her husband was at fault. Miller's "irritation" with his wife's personality and behaviour had, the judge said, reflected "more his lack of adaptability than any shortcomings on her part." By pursuing an adulterous relationship, with a woman whom he has since married, Miller was found "largely if not entirely" responsible for the marital breakdown, a factor that boosted his wife's award. This in particular raised concern in legal circles. It seemed to revive the long-abandoned notion that "blame" should be taken into account when determining a financial settlement.

But of greater concern, according to Tooth, is the repugnant message he believes the judgment delivers to unmarried women. "It's a gold-digger's charter," he says furiously between cigar puffs.

"Any attractive woman will now say, 'Why should I work, when I can go down to Tramp, find a likely candidate, and seduce him?' She'll annoy him sufficiently that he'll probably go off with someone else. But then she'll be able to say he was responsible for the marital breakdown, and will obtain enough to live the rest of her life in luxury. Is that the state to which the law has now descended?"

It took the bitter divorce of two Somerset dairy farmers to challenge centuries of financial discrimination against the wife in wealthy marriages. Until the House of Lords pronounced on the case of Pamela and Martin White five years ago, the courts would normally award the husband the bulk of the marital assets once the wife's "reasonable requirements" had been met. Whatever her contributions to the marriage — raising children, maintaining the home, even earning an independent income — the wife could expect to leave it with far less than her husband.

In most divorces, this would never be an issue: once the maintenance of the wife and any children have been accounted for, there is rarely any remaining capital still to be fought over. But in 35 years of marriage, the Whites had built up a farming business worth almost £5 million. As an active partner in the business — while also bringing up three children — Pamela White was determined to leave with what she considered her due. So when a judge in 1996 decided that her future "reasonable" needs could be met by a lump sum of just £800,000, Mrs. White began a fight for justice which continues to this day.

The Court of Appeal raised her award to £1.5 million, but, with neither party satisfied, the case of White v White went to the Lords. On October 26, 2000, five law lords, led by Lord Nicholls of Birkenhead, delivered their ground-breaking judgment. The £1.5 million payout, by now largely eaten up by legal costs, would stand. But in future, "equality" should be the yardstick, and only with "good reason" should the courts discriminate financially between husband and wife. "If, in their different spheres, each contributed equally to the family, then in principle it matters not which of them earned the money and built up the assets," Lord Nicholls declared. "There should be no bias in favour of the money-earner and against the homemaker and the child-carer."

The ruling radically improved the wife's legal position. Only three years earlier, Lady Conran, the cookery writer and Habitat founding force, had been awarded £10.5 million of Sir Terence Conran's £80 million fortune after 33 years of marriage, at the time the largest publicized court settlement between a British couple. This unusually generous award resulted, as the judge put it, from Caroline Conran's "outstanding contribution" to both the business and the family — even though Sir Terence had argued that "all she did was cook a few dinners." Yet had the case been heard after White v White, Caroline Conran could have expected to receive tens of millions of pounds more of her former husband's money.

The White judgment has brought little satisfaction to Pamela White herself — or Pamela Greenslade, as she is today, having reverted to her maiden name. Now 70, she is currently petitioning Europe after almost a decade of litigation, to redress what she considers the "gross injustice" of her case. "I didn't set out being a feminist, though I seem to have been turned into one by the legal system," she says, with a degree of bitterness, from the small Somerset beef farm her "inadequate" settlement has afforded her. "I don't mind if my case helped other women," she reflects, "but for me it did nothing."

White v White has also left many outstanding questions for the English courts to thrash out. What if the husband made a "stellar" financial contribution through his particular entrepreneurial or sporting gifts? What if the marriage was short, as with the Millers', or if one partner had inherited rather than earned the marital fortune? And if a lump sum fails to satisfy a wife's demands, to what extent should she benefit from the husband's future income? The law lords offered no answers, prompting a string of divorce appeals in the past five years, all of which rely on the precedent of White.

Some senior lawyers believe the courts are making marriage an unattractive prospect to financially ambitious men. Of course, the husband is not always the higher earner: when the wealthy fund manager Nicola Horlick recently settled with her former husband, Tim, there were whispers in legal circles that she too had ceded an unreasonably large share of her self-made fortune, at one stage estimated at £20 million. But mostly, for all women's economic progress, the husband still expects to be the main marital breadwinner.

"The killer in the present law is uncertainty," a prominent family solicitor says. "And since the Miller case, we've had no idea whether one partner's conduct should be used when determining a settlement. It's a conundrum." In the meantime, cases are stacking up before the courts — including an imminent High Court battle between the advertising-industry entrepreneur Sir Martin Sorrell and Lady Sorrell, his wife of 33 years, over a fortune estimated at more than £110 million.

The judges initially called on parliament to clarify the law. When the Court of Appeal raised Jacqueline Cowan's divorce settlement from £3 million to £4.4 million in May 2001 — her husband, the bin-liner entrepreneur Michael Cowan, was said to be worth £12 million — Lord Justice Thorpe said there was "a pressing need for legislative review" to clarify three decades of "judicial tinkering" since the 1970 Matrimonial Proceedings and Property Act. The government had other priorities, however, and the appeal court continued to tinker. By November 2002, when he awarded Shan Lambert half of her husband Harry's £20 million newspaper fortune, Lord Justice Thorpe was firmly of the view that the husband's "hard work, determination and acumen" should give him no greater financial claim than the nonearning homemaker's. And that implied a 50-50 split.

The financial markets are having to take note. Although matrimonial settlements are generally private matters, a number of high-profile businessmen have lately had to sell large chunks of their companies's hares to fund a divorce — among them Mark Dixon, founder of the Regus serviced-office firm, and Rod Aldridge, executive chairman of Capita. When the French Connection founder, Stephen Marks, sold shares worth £36.5 million last year — thus ceding control in the business — he propelled his former wife, Alisa, into The Sunday Times Rich List. She finds herself in good company: Pamela Morgan Bell has made the list, thanks to her reported £100 million divorce from the Redrow construction founder Steve Morgan, as has Sally Croker-Poole, first wife of the Aga Khan.

But it is the social implications of recent judgments that concern senior lawyers. "If you're a well-off man, or are likely to achieve wealth in the future, you'd be absolutely bonkers to get married from a financial point of view," says James Turner Queens Counsel, who represented Pamela White in the Lords and has been instructed by Alan Miller in his attempt to take his own appeal there. Turner is also acting for Janan Harb, former wife of the late King Fahd of Saudi Arabia, who is seeking a share of his £32-billion family fortune.

Many wives, Turner says, absolutely deserve half of the family capital, if not more, if the wealth has been built up by joint effort and the man retains a vast earning capacity. "But many lawyers think the pendulum has gone from one side — being too pro-husband — to swinging wildly the other way. It's a disincentive for a man to get married," he says, shaking his head, "a disincentive to work hard, and, I suppose, it is also a disincentive to tell the truth about his resources."

For a corporate lawyer earning £450,000, Charles Ashton has a surprisingly weak financial incentive to stay on the treadmill. That is because, for the rest of his professional life, Ashton, 46, is legally bound to pay his ex-wife, Helen, a large proportion — currently around half — of everything that he will ever earn.

Three years ago, after an increasingly unhappy 15-year marriage, Ashton left the family home in East Sussex to live with his current partner, Sarah Yockney. As a solicitor, he knew that he would be expected to give his nonworking wife a 50% share of joint family assets, in line with principles established by White v White. What he did not expect was to receive a mere 30% share of the family capital, a £250,000 legal bill, and a continuing obligation to pay his wife and two daughters roughly £130,000, including school fees, of his after-tax income of £270,000. "I feel as if I've been given a life sentence," Ashton says.

The order, made by a district judge, relies on an increasingly controversial aspect of matrimonial law: the use of a breadwinner's "surplus" income, long after a divorce, to provide a continuing benefit to the non-earning former spouse. Ashton expected to continue paying a fair sum for maintenance: after all, his wife had day-to-day responsibility for their daughters, aged 9 and 13, and as the main carer she had sacrificed her own earning power. But after calculating the "reasonable requirements" of all four parties, the judge also decided to award Helen Ashton half of all the income that remained. In addition, she kept the mortgage-free £730,000 family home, in exchange for a £180,000 payment to her ex-husband. The result, Ashton's barrister argued in court, was to give his ex-wife a "first-class meal ticket for life." Mr. Justice Singer, who made the original order against Alan Miller, dismissed an appeal by Ashton, and the Court of Appeal has refused to let him take the case further.

"I can afford it now, but what if the wheels come off?" Ashton says. "If things go wrong, she can go for everything I've got, everything I inherit, and, if we marry, everything that Sarah has."

His face falls. "It's hugely depressing. It seems to be part of this culture that men are useless, women can do everything, and the divorce laws just reinforce that."

Helen Ashton declined to be interviewed, and asked her solicitor, Michael Rowlands of Cripps Harries Hall, to respond on her behalf. "Mrs. Ashton, like Mrs. Miller, did not expect to be divorced," Mr. Rowlands says.

"When she found herself in that position, after a long marriage, her objective was to ensure that the divorce had as little impact upon their children as possible.

She does not recognise a pendulum swinging in her favour, but does believe that the courts, in her case, arrived at a fair conclusion. Fairness, she considers, can be measured by the fact that she and her children remain in the home that they love, and enjoy a reasonable standard of living, and that Mr. Ashton and his new family have a similar home and income."

Helen Ashton would have accepted a smaller award, Rowlands adds, in order to avoid the court battle that "has sadly proved so expensive" for her former husband.

But as Ashton sees it, the lawyers themselves have a vested interest in fighting to the end. "Every attempt I made to discuss matters was rejected out of hand by my wife and her legal team, who clearly felt that her interests would be best served by battling it out in court," he says.

"She was advised to appoint a Queens Counsel for the very first court hearing. How much better it would have been for the family if we had been compelled to go through a mediation process, possibly with the £250,000 that was finally spent on legal costs being put in trust for the children."

Exactly how the courts will settle a big-money case is increasingly difficult for lawyers to predict. The judges' wide discretion is causing a worrying degree of uncertainty and, family lawyers suggest, a wholly inconsistent set of rulings.

When, for instance, the Deloitte tax partner Kenneth McFarlane and his wife, Julia, divorced after 16 years, the court split their £3 million savings equally and awarded Julia McFarlane a third of her former husband's future income, then £753,000, for five years. Last year, the Court of Appeal cut her share of this income to £180,000, a figure she is now challenging in the House of Lords. On the same day, the appeal judges awarded Karen Parlour, former wife of the Arsenal and England footballer Ray Parlour, a 37% stake of his estimated £1.2 million income for the next four years, and an equal share in the capital. Although there were three children, they had been married for just three years, having previously lived together for three years.

The Parlour verdict, and a subsequent ruling that gives another England player's wife 40% of his future income, has provoked intense concern in the sporting world. "It's definitely on the radar now," says Colin Gordon, agent to professional footballers including David James and Chris Kirkland.

"Younger players in relationships are now asking how they can protect themselves — but they know prenuptials don't stand up in court, and it doesn't send a great message out, putting a prenup in front of your fiancée's nose."

Karen Parlour's solicitor, Liz Vernon, at the firm Clintons, insists that her client's media portrayal as "a money-grabbing, bitter and vindictive ex-wife" was grossly unfair. She says the judgment simply relied on four years of future income in place of a larger capital sum as a means of giving both partners the legally required clean break. It was merely maintenance in another form, which Karen Parlour must use to save for her future — and thus "not such terrible news for high-earning husbands".

But more widely, Vernon notes that the trend of post-White judgments is changing social behaviour. "You're going to see more couples staying in unhappy marriages, rather than have the husband risk the costs of a divorce," she says. "I'm already seeing evidence [of this] — more sudden 'reconciliations' when I'm acting for the wife, after the husband's been gone forever and a day. I can't help wondering if that's because he's had the appointment with his lawyer."

There is also the legally sanctioned incentive for wealthy men to cohabit rather than marry. The proportion of cohabiting couples continues to rise, with four babies in 10 now born to unmarried parents. Yet despite a popular misapprehension, the notional "common-law wife" has had no legal right to her partner's assets since 1753. "That's patently unjust," says Richard Sax, at the law firm Manches. "The problem is that men would rather cohabit than get married, and that creates a lack of stability. We're definitely in a mess." Another concern is the uncertain legal status of prenuptial agreements. Although demand is soaring, they are still not strictly enforceable in English and Welsh courts, though judges may taken them into account. "It would help to have prenups enshrined in the legislation," says Sandra Davis, of Mishcon de Reya. "You wouldn't get a builder in without a contract, so why would you enter the most important relationship of your life with no protection?"

Not every lawyer shares these concerns. One eminent Queens Counsel, who has represented the wife in a number of high-profile cases, insists that English courts are simply catching up with the rest of the world. "Since White v White, the law's become pretty straightforward, actually," he says.

"The old way of dealing with these cases was condemned as unfair and discriminatory, but since then the overarching criterion has been fairness. I don't think the law is in a particular state of limbo — we find it easier to advise than in the old days. If they've made a bit of money during the marriage, it's 50%. That puts the law here on the same footing as it is in jurisdictions such as Scotland, New Zealand, Canada and Europe."

The "limbo" arises in unusual cases where wealth or earning power has been generated before the marriage, or if the marriage is short — "and in those areas, we're still exploring what fairness should mean," the barrister continues. "It's a slightly tabloid view that recent developments are acting as a deterrent to marriage. People get married for sentimental reasons, don't they?"

Back on the romantic front line, Britain's more eligible bachelors appear to be warier than ever. "I'm meeting gold-diggers all the time," says Brian Johnson [not his real name], a 34-year-old software multimillionaire from north London, who has been looking for a while to settle down. With around £10 million to his name, he says he cannot trust the single women he meets in the private members' clubs and restaurants where he spends his evenings. He will now date only women he knows have their own independent wealth, such as those who come pre-vetted by Seventy Thirty, a dating agency restricted to "millionaires and high-net-worth individuals."

"With these women in the clubs, you can see their attitude change once they find out I'm loaded," Johnson says.

"And you're thinking, before the divorce laws changed, they might have taken me for half a million, maybe a million, which is still bloody good work for a couple of years. Now, not only will they get half my assets, and a lot more if they've got a clever solicitor, but they'll also get a big chunk of my future earnings.

"I'd love to get married," he says, lowering his voice. "The truth is, I feel so lonely it's unreal. But tell me one thing: for all this government's talk of promoting family values, how on earth does the law protect the man at all?"


 

Dosh: slang for a reasonable amount of spending money, for instance enough for a "night-out." Almost certainly and logically derived from the slang "doss-house," meaning a very cheap hostel or room, from Elizabethan England when "doss" was a straw bed, from "dossel" meaning bundle of straw, in turn from the French "dossier" meaning bundle. Dosh appears to have originated in this form in the United States in the 19 th century, and then re-emerged in more popular use in the UK in the mid-20 th century.


 

Split personalities

Top

1. Fiona Shackleton comes with an unbeatable royal pedigree: she represented the Prince of Wales in his divorce, and remains his solicitor. Other clients include Princes William and Harry, and the Aga Khan. Known for her discretion and aversion to publicity, she nonetheless shared with Vogue magazine the secrets of her wardrobe — 36 suits, 24 dresses, and 85 scarves.

2. Nicholas Mostyn, Queens Counsel, has represented the wife in many landmark cases, including the Parlour and Miller cases. He won Shan Lambert half of her husband's £20 million fortune, and was retained by Zoe Rowland in her fight for part of the reported £690 million family fortune of her ex-husband, the City financier Jonathan Rowland. He is known for his flamboyant performances in court.

3. Raymond Tooth (aka Jaws) is an aggressive big-hitter who has represented celebrity wives including Patti Boyd, Sadie Frost, and Cheryl Barrymore. Matthew Mellon II, the American banking and oil heir, also took him on during his divorce from Tamara Mellon, who built up the Jimmy Choo empire.

4. Barry Singleton, Queens Counsel. Singleton's clients have included a former wife of the late art collector Baron Hans Heinrich von Thyssen-Bornemisza and, more recently, Julia McFarlane, ex-wife of the Deloitte tax partner Kenneth McFarlane. He also advised Paloma Picasso against her former husband, Rafael Lopez-Cambil. Renowned in the profession for being a bruising opponent. Singleton is less of a showman than Mostyn, and is known for a somewhat abrupt courtroom manner.

5. James Turner, Queens Counsel, is another key player in a number of recent high-profile cases. He represented Pamela White in her Lords appeal, and has been instructed by Alan Miller in his attempt to overturn the £5 million payout to his ex-wife. He is also acting for Janan Harb, former wife of the late King Fahd of Saudi Arabia. His specialities include crime and medical negligence. Known as the "matinée idol and dish of the Family Bar," according to the Chambers UK law guide, he is separated from his own wife "but never got around to divorcing."

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Added January 25, 2006

Last modified 7/20/12