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October 8, 2009

Splitting the Difference

By Spear's

Divorce law relating to financial settlements has long ceased to be a laughing matter. That is because UK law is so obviously antiquated, barbaric and unfair

WHEN JOHN CLEESE left court after being ordered to give his ex-wife £8 million in cash and assets which include an apartment in New York, a £2 million mews house in Holland Park, and half a Santa Barbara beach house, he joked that ‘it’s going to be very, very expensive, but it will be worth every penny.’

But divorce law relating to financial settlements has long ceased to be a laughing matter. That is because UK law is so obviously antiquated, barbaric and unfair. When Cleese met his third future ex-wife — who was represented by Fiona Shackleton — she was living in a third floor council flat in London. Yet, absurdly, the settlement will make Ms Faye Eichelberger richer than him. No wonder Cleese has gone into hiding to write a one man show called ‘Alimony Tour Year One’.

Spear’s has consistently argued that it is time that pre-nups and post-nups are recognized in English law. It is madness that consenting adults — especially those who have been financially burned by a previous divorce — cannot decide for themselves how they can split up their assets in the event of a marriage not working out. Obviously, nobody should be left with nothing, but the whole point of pre-nups is that they are only valid if they make a fair and reasonable provision for both parties.

For many years the more progressive political element of the legal system argued against divorce law reform, saying that splitting assets 50:50 was the ‘fairest’ way, despite the fact that it actually amounted to a Golddiggers’ Charter allowing women (or a man) the right to take half a spouse’s wealth after the briefest of marriages — a famous case in point being that of hedge fund manager Alan Miller (interviewed on page 42) who appealed to the High Court — and lost — after a judge ordered him to pay his ex-wife £5 million after just three years of marriage.

Yet miracles do happen proving that the law is not always an ass. Earlier this year Katrin Radmacher, a German heiress, succeeded in overturning an earlier UK court decision to award her former banker French ex-husband £5.8m of her £100m fortune despite having a pre-nup agreement. Appellate judge Lord Justice Thorpe said he believed it had become ‘increasingly unrealistic’ for courts to disregard pre-nuptial agreements. ‘It reflects the laws and morals of earlier generations,’ he said.

This U-turn came after last year’s unexpected ruling by the Privy Council to give legally binding status to post-nups, which are drawn up during a marriage (although one can imagine it being a tricky subject to bring up over the apple crumble at Sunday lunch) in the same spirit as a pre-nup. Instead of going to war, which is invariably what happens when lawyers get hired, couples can focus more on whether they really do want to get divorced. This rarely happens when there is no pre-nup or post-nup in place.

Spear’s welcomes both rulings, bringing England’s divorce law into the twenty-first century – and about time too.

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