Beating the normal 50:50 split
Divorce is a complex and emotionally charged process, often accompanied by numerous financial concerns. When deciding on how to approach the question of splitting assets, the Court’s starting point under English law is that the assets are split evenly between the parties – the infamous 50:50 split. However, there are various factors and arguments that can be brought before the Court that can tip the scales in favour of one party and depart from this split. Vardags’ specialist family law team are highly-skilled and experienced in successfully arguing such points in front of judges in the Supreme Court and below.
How are assets divided upon divorce?
The Court is responsible for determining a fair division of matrimonial assets and has a wide discretion in making such a determination – meaning it is vital in such cases to instruct experienced and expert lawyers, especially where there is no agreement between the parties.
In order to be able to determine a fair division, the Court takes into account multiple factors when approaching financial remedy proceedings. Examples of the factors, which are set out in section 25 of the Matrimonial Causes Act 1973, considered include the following:
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Each party’s contribution to the family’s welfare;
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Whether there has been any ‘special contribution’ by virtue of one spouse’s exceptional skill and determination;
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The parties’ income;
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Marital and non-marital assets;
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The length of the marriage; and
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The future needs of both parties.
What qualifies as a ’special contribution’?
At its core, ’special contribution’ refers to extraordinary financial contributions made by one spouse during the marriage. These contributions can arise in the following situations:
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Exceptional financial success during the marriage;
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Portraying business or entrepreneurial genius; and/ or
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Possessing truly unique skills and talents.
However, understanding what constitutes a ’special contribution’ is anything but straightforward. In practice, these cases are extremely rare and complex to argue. In fact, there are just a handful of reported cases where ‘special contribution’ has been successfully argued.
In essence, it is not about comparing one party’s contributions to the other party’s contributions. Instead, the Court focuses on evaluating the contribution itself. To be deemed ’special,’ these contributions must possess an entirely exceptional and truly outstanding individual quality. These contribution should shine out as glaringly inconsistent with fairness if overlooked.
Deciding what counts as ’special’ largely rests in the hands of the judge. This means that there are no strict rules or clear-cut definitions, and the Court will consider the arguments made by lawyers in the case carefully as a result. The Court will only consider an uneven division if there is a compelling reason to do so.
Will my non-financial contributions be considered by the Court?
Under English law, non-financial contributions to the marriage are treated as equally important by the Court – and previous cases have established that there should be no discrimination as to contributions to domestic life versus contributions to finances. Contributing to family life by raising children, supporting your partner’s career, or taking care of the home will all be considered by the Court as making an equal contribution to the marriage when compared to a financial contribution, like going out to work. Ultimately, the Court’s aim is to achieve a fair outcome for both parties.
I have made a significant amount of money during my marriage; can I claim ‘special contribution’ ?
Whilst immense wealth alone might sometimes warrant special treatment, more often than not, individuals must demonstrate truly exceptional qualities – for example, coming up with a particularly lucrative invention. In cases regarding business or financial genius, simply benefitting from a sudden windfall will not be sufficient to satisfy the Courts. The party seeking special contribution must have actively driven their earnings with their unique qualities, effort and skill.
The Court carefully examines the circumstances of each case and applies a high threshold to determine whether a special contribution justifies departing from an equal division of the assets.
If I can prove that I have made a ‘special contribution’, what percentage of the assets can I expect to receive?
In cases where one party is able to successfully demonstrate that they have made a ‘special contribution’, they may receive a larger share of the marital assets. However, as seen from decided cases, the departure from equality largely ranges from 55:45 to 67:33.
‘Special contribution’ in case law
There have been various notable cases highlighting the complexities of ’special contribution’ claims in divorce proceedings.
In the case of Work v Gray [2017] EWCA Civ 270, Mrs Gray secured a victory against her husband, US businessman Randy Work on his ‘special contribution’ argument. Despite his substantial wealth and successful career, the Court ruled that Mr. Work’s contributions were not significantly greater than Mrs. Gray’s, considering the sacrifices she had made throughout the marriage, including her relocation to Japan and the fact that she had raised their children in a foreign environment.
The case draws parallels with the 2017 High Court Vardags’ victory, (Chai v Peng [2017] EWHC 92 (Fam)), where Vardags refuted a claim for ’special contribution’ successfully arguing that homemakers deserve equal remuneration upon divorce. Vardags’ client, Pauline Chai, was awarded £64 million from her former husband, the hugely successful business tycoon and entrepreneur Khoo Kay Peng, concluding a four-year divorce battle.
A further case that highlights the difficulties in ‘special contribution’ arguments is that of former Manchester United footballer, Ryan Giggs, who attempted to avoid paying his estranged wife half of his fortune on the grounds of his ‘genius’. Giggs held that his ‘special contribution’ to the matrimonial funds was such that it merited a departure from the normal starting point of equality between breadwinner and homemaker. The parties eventually reached an agreement in private and the details of their agreement were never published with the case being kept confidential. However, the lead up to the settlement, along with current case law on the topic, evidence that these types of cases are generally decided on whether the wealthier party’s work was of such a truly significant and special character as to set them aside in a notable and novel way.
Overall, judges are reluctant to award ‘special contribution’ merely due to exceptional wealth. The party seeking ‘special contribution’ must demonstrate something much more than the ‘usual’ to warrant a departure from equality. Having said this, this has not stopped parties in proceedings trying to assert their ‘genius’ and/ or ’special contribution’.
If you are currently navigating the complex waters of divorce and wish to explore and/or safeguard your interests in the context of ‘special contributions’, our highly experienced family lawyers and financial forensics team are skilled and well-versed in providing tailor-made advice to meet your needs and craft and/or defend these specialised legal arguments.
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