High stakes mean that, despite efforts to make UHNW divorce less confrontational, the marriages of many still end in acrimonious legal battles. Emerging victorious often means fighting with the latest tactics – and on multiple fronts
Gwyneth Paltrow was celebrating her 38th birthday in Tuscany when she first realised that her 13-year marriage to Coldplay singer Chris Martin was doomed.
‘I tried to quell that knowing, to push it far down,’ wrote the actress and entrepreneur in an essay for Vogue last year. ‘I tried to convince myself it had been a fleeting thought, that marriage is complicated and ebbed and flowed. But I knew it.’
In an effort to make the split as painless as possible, the couple discovered an approach dubbed ‘conscious uncoupling’, a five-step process of divorcing in a positive, amicable way.
However, seven years later, as Paltrow pointed out recently, the concept has ‘permeated the break-up culture’. Although uttering the phrase ‘conscious uncoupling’ may still make non-LA residents cringe, Paltrow is right.
And the central philosophy – that ending a marriage should be as amicable as possible – has been one of the dominant themes in family law in recent years, reflected in the emergence of practices such as collaborative divorce, hybrid mediation, early neutral evaluation and a number of other forms of alternative dispute resolution.
Private client law firm Withers declared last year that it was time for divorce to ‘change for the good’ as it unveiled Uncouple, a new model for divorce designed to remove polarisation from the process through ‘outcome focused methods of evaluation’. The firm complemented its new offering with the launch of a successful podcast on modern relationships hosted by Mariella Frostrup.
Next April will see the introduction of no-fault divorces, thanks to a change in the law in England and Wales that removes the need to apportion blame to either party. It is yet another step towards a less adversarial divorce culture.
However, one need not look far to find examples of UHNW divorces that defy this trend.
The Daily Telegraph owner Sir Frederick Barclay was recently criticised by a High Court judge for ‘reprehensible’ behaviour during his divorce proceedings and was ordered to pay his estranged wife £100 million.
UK courts will also be the setting for a £5 billion showdown in the Russian Potanina divorce and will hear from the lawyers involved in the split between the Queen’s grandson Peter Phillips and his estranged wife, Autumn. Phillips, the first Royal of his generation to divorce, has not yet reached a financial settlement, despite the pair calling their separation ‘amicable’.
The hostilities relating to the divorce of Brad Pitt and Angelina Jolie, in which papers were initially filed in 2016, continue to rumble on. Pitt won joint custody of their six children in May, and is reportedly ‘on guard’ against further legal attacks.
These skirmishes pale in comparison to one of the least amicable UHNW divorces of modern times: that of Tatiana Akhmedova and her oligarch ex-husband Farkhad, a case rich in tabloid-friendly details involving everything from superyachts to art collections held in trust.
Tatiana, who has been represented by Fiona Shackleton of Payne Hicks Beach, was awarded a £453 million divorce settlement in 2016 – an estimated 41.5 per cent share of her ex-husband Farkhad’s fortune – but by 2020 she had reportedly only received £5 million and a rusting helicopter.
Dubbed a ‘feel-awful yarn for a feel-awful era’ by the New York Times, the saga continued when Tatiana sued her son Temur for helping his father to hide assets.
In April this year, High Court judge Justice Knowles ruled that Ms Akhmedova’s characterisation of her son as his father’s ‘lieutenant’ was correct and that considerable sums had been transferred to him.
Temur was ordered to pay his mother around £75 million, in a case that led Justice Knowles to quote from Tolstoy’s Anna Karenina.
‘All happy families are alike, each unhappy family is unhappy in its own way,’ said Knowles in her judgement. ‘With apologies to Tolstoy, the Akhmedov family is one of the unhappiest ever to have appeared in my courtroom.’
Indeed, Tatiana remains entangled in litigation with a number of trusts to which her ex-husband has allegedly transferred assets. But when it comes to UHNW divorces it often simply isn’t possible to play nicely, says Ayesha Vardag, founder and president of private client law firm Vardags.
‘It’s very difficult in very HNW cases – if there is no form of agreement already set up – to keep things really cosy and friendly, because the stakes are so high. People have such different perspectives on what would seem to be right and fair,’ she says.
A client’s decision to settle or fight also often hinges on a ‘commercial equation’, says Vardag.
‘If you’ve got that much money at stake between settling and fighting, you’re going to fight. The reality is that divorce can be a 50 per cent tax on your entire net worth, which for HNWs is quite a lot.’
Despite best intentions, collaborative processes and mediation can often play out to the advantage of one spouse at the expense of the other – particularly as ‘one person is often devastated and can’t really think straight’, says Frances Hughes, a senior partner at Hughes Fowler Carruthers.
Getting into scrappy litigation ‘isn’t good for anybody’, but Hughes adds that clients can end up with a ‘long time to regret it if [they] don’t get a decent financial deal’.
Once the decision to fight has been taken, things sometimes turn quite nasty, quite quickly. A prominent family lawyer tells Spear’s about a client who instructed his barrister to make his wife cry during proceedings. ‘It will be my pleasure, sir,’ said the barrister.
Some wealthy men, the lawyer notes, see divorce as a war of attrition in which they are likely to prevail. ‘They’ll say, “My wife won’t have the stomach for the fight.”’
Resilience, however, is just one of several factors that can decide the outcome of a split.
Another of the most important is money: anyone waging a gruelling campaign needs a war chest.
‘Equality of arms’ is crucial, says George Williamson, CEO and founder of litigation funder The Level Group. When it comes to UHNW divorce, there is often one party that is significantly financially weaker, and who may have limited access to funds.
‘The weaker party might have a share in a couple of homes,’ says Williamson, ‘but often they’re very limited on what they can actually draw down. The first step to freedom is having the financial resources to fight the litigation.’
Level provides funding to spouses embarking on divorces to help cover legal fees. In some cases, the company also helps with living expenses to prevent a client from ‘being starved into a weakened bargaining position’.
The firm, which was founded in 2017, recently received a £20 million investment from Guernsey-based investors 1818 Venture Capital – testament to the increasing prevalence of litigation funding in family law.
According to City law firm RPC, some £2 billion was held by litigation funders in 2021, double the figure of three years prior. It emerged last year that Tatiana Akhmedova’s pursuit of her divorce settlement was being supported by Burford Capital. (Burford will, somewhat controversially, take a portion of the settlement, rather than enter into a more straightforward lending agreement like most litigation funders.)
When it comes to cases with an international dimension, on top of the lawyers’ fees incurred on the way to the final hearing, more may be required to push for the enforcement of an order.
Most UHNWs lead international lives, with business and personal ties to several countries around the world. And, increasingly, the jurisdiction by which divorces are governed is a crucial battleground.
The UK has become a magnet for international big-money divorces thanks partly to a system that begins with the assumption that all assets will be split 50/50 between the two parties.
Recent history is full of examples of multimillion-pound awards from English courts – from the former wife of financier Khoo Kay Peng, who was awarded £64 million in 2017, to Jamie Cooper-Hohn, the former wife of hedge fund manager Sir Christopher Hohn, who was awarded more than £337 million. The Akhmedova award of £453 million is believed to be the largest of its kind in history.
In the context of other jurisdictions, these outcomes are significantly more favourable to the financially weaker spouse.
Before Brexit, divorces with a connection to the UK and another European country would generally be subject to a ‘first past the post’ rule, meaning the country in which proceedings were first issued took priority.
Following the UK’s exit from the EU, a divorce filed in multiple jurisdictions must now usually be heard in the country to which the parties are most strongly linked. This opens the possibility for further dispute.
Hatley and her client wanted to approach proceedings in as constructive a way as possible, but felt there was a risk that the client’s husband could go to France and file in a environment that was much more favourable for him.
Hatley was therefore compelled to issue and serve the petition in the UK before the wife had even informed her husband of her intention to split. The first time he heard about the divorce was when he was served with the petition – a situation that made the wife ‘extremely uncomfortable’, says Hatley.
‘It is upping the ante, and it’s creating these forum races,’ says Hatley of the Brexit fallout. ‘People are having to take decisions quite quickly in order to secure the best forum for themselves.’
But even if a divorce is heard in a specific jurisdiction and an award is made, this is not necessarily the end of the matter, as the Akhmedova case shows. ‘Is she going to see the awarded sum, do we know?’ says Vardag of the case, which she calls a ‘pyrrhic victory’ for Ms Akhmedova.
Often, it’s not a case of the headline figure awarded in a divorce, but the actual sum that one is actually likely to receive. ‘In these big international cases, sometimes it’s better just to do the best deal you can and be sure that you’re going to get the money,’ says Harper, author of a book entitled International Trust and Divorce Litigation.
The Akhmedova case is also remarkable because of how personal details from the combatants’ lives were scattered into the public domain.
Nothing was hidden: even a ‘draft message’ from Temur’s phone, in which he described his mother as ‘unfaithful, dishonest and not clean’, surfaced in proceedings.
Embarrassing – and potentially damaging – information always has a chance of ending up in the open, even if a party has ‘no public profile of their own’, says Dominic Crossley, a partner in the litigation department at Payne Hicks Beach and a Spear’s Top Ten reputation lawyer.
The act of leaking information to the press can also be used as a tactic to wound the other side.
‘Disgruntled partners are increasingly seeking to publish or threaten to publish information as a consequence of a relationship breakdown and – even though it may not appear in the tabloid press – circulation by social media, often by anonymous accounts, or even emails to friends and family can cause enormous distress.’
Social media opens up a new frontier for separated couples to do battle. Accusations do not need to be founded on truth in order to become widely shared across platforms.
The actress Amber Heard accused her ex-husband Johnny Depp and his lawyer Adam Waldman of deploying twitter trolls and Russian bots in an attempt to ‘interfere with her reputation, career and livelihood’ in a lawsuit last year.
Waldman denied the accusations, but the exchange illustrates how such platforms could be weaponised in an effort to influence proceedings.
He helps clients to plan for reputational risks in order to manage them when they arise. ‘The role that we take is to make sure, when this litigation is over, you’re in the best place you can be to move on with your life, whether you win, lose or draw,’ he says.
His ‘overriding view’ is that it is usually best for couples to keep things ‘very private’. Of course, there are instances where a ‘fire gets lit’, which can quickly get out of hand.
Such cases are about mastering the art of self-defence too – managing ones Google footprint and social media channels, for instance. When damaging accusations appear, action can be swiftly taken on grounds of defamation and libel.
Leach also recommends taking a ‘reality check’ about whatever surfaces. ‘Because if you start to really react, there is a great danger that you can make things worse and start promoting things that you would rather just disappear.’
The Akhmedova case is the ultimate cautionary tale. A ‘forever war’, with roots that can be traced all the way back to 2003 when Tatiana filed for divorce, it has shed light on so many facets of modern UHNW divorce.
But, amid all this hostility, there is a chance that overtly acrimonious UHNW divorces may soon become less numerous. A common factor in many of the hardest fought divorce battles is a lack of pre-existing financial agreements.
‘Divorce will continue to be hard-fought where it’s a big money case, except where people have a prenup, and then you can do things in a really civilized way,’ says Vardag, who notes a 480 per cent increase in monthly volume of prenup enquiries at her firm since 2018.
Where a prenup has been signed, a lawyer may only be required to ‘rubber stamp’ the arrangements, adds Vardag. ‘Nobody wants to see lawyers if they don’t have to.’
But it is an incontestable fact that breaking up is still hard to do. Not every couple can be like Gwyneth Paltrow and Chris Martin.
‘Some people,’ another prominent lawyer tells Spear’s, ‘just want to have a fight because of the nature of the dispute.’
As long as that remains the case, UHNWs may be best advised to view the dream of conflict-free, ‘conscious uncoupling’ with a pinch of scepticism. As the saying goes, ‘if you want peace, prepare for war.’
The 2021 edition of the Spear’s Family Law Index will be launched on the 7th of July at Spears500.com
This piece is the cover story from issue 80 of Spear’s magazine. Click here to order a copy and subscribe. .