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  1. Wealth
June 28, 2016

Wyatt v Vince: why divorce settlements should not be delayed

By Spear's

The twenty-year battle is a stark reminder that divorcees should ‘wrap matters up’ at the time of divorce, write James Ferguson and Harriet Errington.

In March 2015, the Supreme Court made headlines when it ruled that Kathleen Wyatt, the impoverished ex-wife of Dale Vince, the self-made multi-millionaire founder of green energy supplier Ecotricity, could proceed with a claim for financial remedy in the family court, even though the couple had divorced twenty years earlier. The case was especially striking because Mr Vince had become a millionaire since the couple’s separation. Although they had lived hand-to-mouth in a caravan as new age travellers during their short marriage, twenty years on, Mr Vince’s wealth was estimated to be around £107 million.

The Supreme Court made the decision not to strike out Ms Wyatt’s claim, despite the delay in her application, because the couple had not expressly sought the dismissal of each other’s claims at the time of the divorce in 1992. Ms Wyatt’s claims against Mr Vince were therefore still open and to strike them out without giving Ms Wyatt the chance to put her case to the Court would be considered draconian given the ‘life-long obligations which attend a marriage’. The court ruled that there can be no strict limitation periods on bringing a claim for financial relief in these circumstances.

The parties’ lawyers started negotiations in March 2015, finally agreeing the terms of a consent order settling their claims against one another which was presented to the Court for its approval.  The agreed order provided for a lump sum payment of £300,000 from Mr Vince to Ms Wyatt – a sum which was not dictated to Mr Vince by the Court as the parties settled the matter before the case got to a final hearing. Ms Wyatt would retain the monies already paid to her by Mr Vince on account of her costs incurred as a result or Mr Vince’s ‘strike out’ proceedings in the amount of £325,000.

What the parties did not agree about were two distinct matters; first relating to whether the terms of the settlement should be published or not (Mr Justice Cobb was clear that it should) and whether Mr Vince should be ordered to pay Ms Wyatt’s costs in relation to a distinct aspect of the case (the Dean Summons), assessed by the Court at the amount of £1,000. The general rule in relation to costs in divorce proceedings is that each party should be responsible for meeting his/her own legal fees. However, the Court retains the discretion to make costs orders if appropriate because of the conduct of one of the parties.

In this case, although Mr Vince was ordered to pay two separate sums to Ms Wyatt in the context of his unsuccessful application to strike out her claim, in relation to the financial remedy proceedings each party was in fact responsible for their own costs. Ms Wyatt will now need to meet her lawyer’s fees herself in respect of these proceedings – which are likely to be substantial – from her lump sum of £300,000.

The lump sum agreed between the parties is modest considering Mr Vince’s wealth, the short duration of the couple’s relationship and the fact that Ms Wyatt made no contribution to the success of Mr Vince’s business; and rightly so. However, this case has attracted widespread media attention, mainly due to the extraordinary facts.

From a legal perspective though, the outcome is unsurprising and reaffirms that the position in relation to these sorts of applications which may be brought by either party no matter how many years have passed since separation if their claims against one another have not been dismissed. The case, which was finally concluded last week is a stark warning to divorcees who fail to wrap matters up comprehensively with their spouse at the time of the divorce: the powers of the family Court in England and Wales are extensive.

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James Ferguson is a partner and Harriet Errington a solicitor in the Family team at Boodle Hatfield.

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