from : The Times Online 24 May 2006
[PICTURES OF TWO WOMEN]
Melissa Miller, left, who walks away with �5 million and a Chelsea home, and Julia McFarlane, whose sacrifice of her high-flying job was rewarded (PA)
The House of Lords ruled in favour of two ex-wives today in a landmark judgment that will strike fear into the heart of millionaires across the country - including, perhaps, the former Beatle Sir Paul McCartney.
Divorce lawyers said Sir Paul, who separated from his wife last week, could face a record payout of up to �200 million after the law lords rejected an appeal from Alan Miller, a City fund manager, against a settlement that handed his wife �5 million after less than three years of marriage.
In the other case, Julia McFarlane, who gave up a high-flying legal job to become a stay-at-home mother, was awarded alimony of �250,000 a year in recognition of her contribution to her husband's career as wife and mother of their three children.
The law lords wrapped up the two cases in a single judgment that rewrites divorce law in England and Wales and is expected to have a knock-on effect in the Scottish courts, where wives are traditionally treated less generously.
For most couples contemplating divorce, the McFarlane ruling is the more important of the two since it examines the contribution made by a wife during a long marriage that produces children and establishes that the settlement should not just reflect the wife's immediate needs but, for wealthy couples, compensate her for her losses.
But the celebrity divorce lawyers will be focusing on the case of Miller v Miller, which sees Melissa Miller walk away with �5 million in cash and assets, including a house in Chelsea.
The lords ruled that Mr Miller's conduct - his ex-wife had accused him of adultery - need not have a bearing on the case. They also knocked down another aspect of the original settlement, that Mrs Miller had a "legitimate expectation" as soon as she married a wealthy man that she could expect to live "on a higher economic plane".
But in his leading judgment, Lord Nicholls of Birkenhead still said that the judge had been right to regard the "high standard of living" enjoyed by the couple as a key feature in the case.
Lord Nicholls based his ruling on the fact that Mr Miller's wealth had increased hugely during the marriage, however short, because of a rise in the value of shares he held in New Star, a fund management company he helped set up and which took off during the period of his marriage. Given that wealth, the award represented at most one sixth of Mr Miller's fortune.
Divorce lawyers said that it was the focus on the increase in Mr Miller's wealth that opened the door to more big money settlements.
Stephen Foster, head of divorce at the London law firm Stewarts, said: "If you have built up your career before meeting your partner, you have done your spadework, and shortly after your marriage your earnings curve increases dramatically, then even if it turns out to be a short and childless marriage it could, as Mr Miller has found out, be a very expensive one."
That aspect of the Miller judgment could also have an impact on an eventual McCartney settlement, if the couple go to court, since Sir Paul is generally thought to have greatly increased his already considerable assets since he married the former model Heather Mills in 2002.
Patricia Hollings, a divorce specialist at Finers Stephens Innocent, added: "Heather Mills McCartney can feel a lot more confident about her future on the basis of the Miller ruling - there are a lot of parallels and, even better for her she actually has a child from this marriage.
"If I was arguing for Heather Mills McCartney and relying on Miller, and assuming he's worth �800 million, I would say, 'Starting point: �200 million'."
Emma Hatley, a family law partner at Withers, which represented Mrs Miller, said that the key lesson from the Miller case was that "all marriages are to be treated as a partnership of equals" with an equal entitlement to sharing the "marital pot".
She added: "The House of Lords has said you no longer have to earn your 50 per cent by doing time in a marriage of 15-20 years. Any length of marriage may justify a 50/50 split - at least of the wealth arising during that marriage. The longer the marriage, the less relevant it is when and how that wealth was acquired."
Mrs McFarlane, whose husband is a senior tax specialist with the accounting firm Deloittes earning some �750,000 a year, was originally awarded �250,000 a year but that was reduced to �180,000 on appeal. Mrs McFarlane had given up a legal job in the City in 1991 after agreeing to stay at home and look after the couple's children - freeing up her husband to develop his career.
The Court of Appeal reinstated the original payment but set a five-year time limit on the settlement during which time she was expected to save money to provide a lump sum to support a clean break.
But, in another setback for the Court of Appeal, the lords rejected its argument that Mrs McFarlane should use her alimony payment to finance a "clean break". Lord Nicholls wrote: "The wife's claim for compensation stands differently. Her compensation claim is not needs-related, it is loss related."
Outside the court, Mrs McFarlane�s lawyer, James Pirrie, said: "We are delighted for Julia. It is a ground-breaking ruling.
"Until today maintenance for a stay-at-home mum was based purely on her living costs. Now judges must consider contribution and compensation for people like Julia. This is only fair. The judgment recognises her sacrifice and that marriage is a partnership."
Commenting on the case, Michael Gouriet, of Withers, said: "The decision in McFarlane will have significant implications across the City and for all those high earners where their income exceeds the needs of the family.
"In effect, the husband�s earning capacity was treated as a fruit of the marriage since it was enhanced as a result of the parties� joint endeavours at an earlier stage of his professional career. Many high-flyers will find this judgment a deterrent to marriage without a pre-nup."
Comment :
If a man supports a woman for years, or even decades, most people would say that the woman is beholding to the man. Even more beholding if she has enjoyed a high standard of living. Even more again if she has never had to work in that time. In other words, the woman owes the man something.
The senior judges of the UK however, think that the man owes the woman something. Are they mentally deranged ?
A separate issue is that of fault. If the men in question had defaulted on their marriage vows (e.g. adultery of desertion) then most people would say that the women should be protected. That may mean that they should be put back into the position they were in before the marriage.
The senior judges of the UK however mainly ignore fault, and in any event place the women in an extremely advantageous situation compared with that before marriage. Essentially the judges think that the advantages of marriage should continue. And this applies even if the woman was an adulterer or deserter.
A euphemism :
The judges refer to the fact that the woman didn't not need to work as "sacrificing her career". Most people would say that they "avoided work" for years. Those on benefits who could work are usually referred to as "shirkers" or "scroungers", but women who obtain support money from a husband are "sacrificing" something apparently.
An analogy :
If a man had a regular drinking friend, and for whatever reason (e.g. his friend was made redundant) bought his pal beer over a period of years, most people would say that the friend owes back the money. If the two were to fall out, most people would say that the friend owes the beer money back to the man. To our judges, the man would be required to keep on buying the beer.