Is all fair in love and credit crunch divorce?
In a court of appeal judgment today, eagerly anticipated by family lawyers throughout the land, Bryan Myerson failed in his attempt to rewrite his divorce settlement.
In February 2008 he agreed with his wife that he should receive some 43% of the couple’s £25m fortune, with the larger share (around £14m) going to her. Unfortunately for Myerson, he elected to take his slice in shares in his company PCH where he worked as a fund manager. The value of the shares plummeted. His fortune was wiped out. He asked the court of appeal to revisit the settlement, which no longer appeared to him to be fair.
“Fair” has been the watchword in divorce settlements for the last decade or so. Dealing with the case of two Somerset farmers back in 2000, the House of Lords castigated the rationale of judgments made over the previous 30 years which had required wealthy husbands to do no more than meet their ex-wives’ “reasonable requirements”. Their Lordships rewrote the rules to make “fairness” the overriding objective.
The collected judgments of the lower courts over the ensuing ten years have taught us just one thing. No one can agree on what fairness means. Take this example: I have two children, one is a high-flyer, the other a plodder. Does fairness dictate that I should provide for them equally on my death? Or does fairness dictate that I should have regard to their capabilities and provide additional money to the needier one?
Translating that into the divorce arena, is it fair to divide the matrimonial pot equally between spouses or should we compensate the economically weaker (usually the wife) by giving her more of the capital, knowing that the husband will make up the shortfall by earning more in years to come? That we might surmise, is why Myerson “only” got 43% in the first place.
Elsewhere, for example in continental Europe, there is another approach. He keeps what is his and she keeps what is hers. Not for nothing is London characterised as the divorce capital of the world – for wives! In this country the division of assets includes not only joint assets but also assets held in one party’s joint name.
Has the court of appeal been unfair to Myerson? Probably not. For all that he suddenly found himself to be an economic victim, it is hard to imagine that if his stock had doubled in value he would have rushed back to court to offer his wife an extra slice of his good fortune.
The Myersons have paid their solicitors and barristers a king’s ransom in legal fees. They were both represented by top-quality Queens Counsel and junior barristers. In fact, Bryan Myerson had not one, but two, juniors. Their combined legal costs will be in the region of £100,000.
The court of appeal is staffed by three Lord Justices (salary £180,906 per annum) and any numbers of clerks and ushers and other acolytes. It occupies a large slice of prime real estate in one of the most expensive corners of the globe. The expense of providing the services of the court of appeal is borne by the taxpayer. The contribution payable towards those expenses, the fee payable on lodging an appeal, is £400.
Is that “fair”?
This article first appeared on the Guardian website:
Jeremy Freedman: email@example.com