March 13, 2015

Rags to riches – delayed divorce payout ruling is cautionary tale

By Peter Jones, founder and partner

Could a landmark Supreme Court ruling allowing a woman to make a claim for financial support from her ex husband 20 years after their divorce open the floodgates for similar claims?

The unanimous decision by five Supreme Court judges to allow Kathleen Wyatt to seek a payout from her former husband multimillionaire Dale Vince is unprecedented.

Ms Wyatt and Mr Vince were penniless New Age travellers with a small son, Dane, at the time of their divorce.  Dale Vince made his fortune years later after founding the successful green energy company Ecotricity and was awarded an OBE. While Mr Vince is said to be worth £107m, his former wife lives on a limited income.

Many family lawyers and media commentators doubted that Kathleen Wyatt would win her case after such a long time lapse. I was not surprised as I had been involved in a not dissimilar case at the Court of Appeal some years earlier. The judges disagreed and they ruled that because there was no financial order in place at the time of the divorce – and no time limit in family law on making such orders – Ms Wyatt could apply to the Family Division of the High Court to make a claim for financial support.

There is no guarantee that Ms Wyatt will receive a substantial payout from the family court. However, the Supreme Court ruling is a timely reminder to all separated couples to have an order in place when they divorce to ensure that there will be no financial claims in the future.

Without this ‘closure’ either party could, like Kathleen Wyatt, come back with a claim for financial support from their ex many decades later. This can apply to husbands just as much as wives.

Although few people are likely to amass millions like Dale Vince, there are many of more modest means who could find their finances looking healthier some years after a divorce.  For example, an inheritance or a lottery win could change someone’s financial status substantially. Without a financial order an ex husband or wife could make a claim on that windfall.

The only way to ensure that future wealth and assets are protected is to seek legal advice when you are considering divorce. However, the demise of legal aid means that many thousands of divorcing couples are denied access to the expert advice they need.

Droves of couples are now undertaking DIY divorces and may not have considered the need to have robust financial orders in place which will give clarity and certainty to avoid delayed claims coming home to roost. Many may come to mutual agreements not endorsed by a court and which could come back to haunt them in the future. Whilst that may seem to be fine it is a recipe for disaster many years later.  No one should have to return to the court years later with all the anguish, stress and cost risking damaging a new relationship.

Dale Vince has described the court’s decision as “mad”, but his rags to riches tale should be a salutary lesson for all divorcing couples.

If you have any questions or concerns about financial orders, or any aspect of separation or divorce, please leave a comment below, drop us an e-mail or tweet us @helpwithdivorce