This is why billionaire wives no longer get all the cash and kids in a divorce

Ayesha VardagVardagsAyesha Vardag is one of Britain’s most prominent divorce lawyers.

Several high profile divorces, amongst the richest people in Britain, may signal that matrimonial law is tipped in the favour of the woman.

For example, multi-millionaire Ecotricity founder Dale Vince is being pursued by his ex-wife for £1.9 million ($US2.9 million) in a payout around two decades after they divorced.

Until his death in 2013, lifestyle broker for the world’s richest men Scot Young was pursued by his former wife Michelle for more cash, after she claimed her £20 million ($US30.1 million) settlement was a “mockery” in court.

It seems to hark back to socialite Ivana Trump’s famous saying: “Remember girls: don’t get mad, get everything.”

Elsewhere, oligarchs and international billionaires find themselves in British courts because London is known as the “divorce capital in the world” within law circles. This is because of the massive payouts a matrimonial separation can bring by making your claim in England and Wales.

For example last year, hedge fund billionaire Chris Hohn had to pay more than a third of his $US1.5 billion (£981 million) wealth to
his American-born former wife Jamie Cooper-Hohn, after a court battle in London.

However, one of Britain’s most prominent divorce lawyers, Ayesha Vardag, told Business Insider that the law has significantly changed from the “amiable chauvinism” from previous decades and now women no longer automatically get huge payouts from their husbands or gain automatic custody of their children.

Vardag, who celebrates the tenth anniversary of her law firm Vardags this month, has represented some of Britain’s most high profile cases from celebrities and members of royal families to high net worth and international individuals. The British High Court’s ruling on the German heiress Katrin Rachmacher case, which Vardag represented, also changed the recognition of pre-nuptial agreements in England and Wales’ law.

BUSINESS INSIDER: Women seem to get a better “deal” when couples divorce in the UK, is this a fair assumption?

AYESHA VARDAG: There is a huge shift away from the historical generosity for dependent women. It’s a wise move because the whole thing arose from fundamental amiable chauvinism of judges from paternalistic approaches towards wives.

There was this whole vision of women being “looked after” by their husbands and that women had to give up their careers once they were married and that, somehow, by being married the economic value of a women had diminished. That attitude is being whittled away and it’s becoming tougher and tougher for women to automatically receive huge payouts as people are constantly challenging these assumptions.

It used to be the gold standard for kids to go with their mother if there was a custody battle in a divorce case but that doesn’t happen as much any more. This is also down to looking at who can afford to look after the child and how much time they can devote to their child or children, as some women want to get back into full time work or already have a demanding job.

There is a still a lot of generosity towards dependent spouses and if the dependent spouse is a man, they do tend to get a lot less than if they were a woman. However, this is changing.

BI: How about the Dale Vince case? How is it possible for a person to claim money from an ex-husband when it has been decades after a divorce?

AV: If you don’t close off the financial matters in a divorce case, you technically leave that door open for your former spouse to get in touch and ask for more money, if you do happen to make a lot more in the future,” said Ayesha Vardag, the president of her own law firm, Vardags in London.

If there is a huge financial disparity between the two parties, even later down the line, the courts like to help with wealth distribution. Sometimes the courts want to do nice things like that but fundamentally, it was a technicality at the time that led to this case going to the appeals stage.

In divorce cases I have seen, some people will maybe pay a lot more money out in a divorce settlement in order to close off the ability for a former spouse to seek further financial compensation in years to come. Above all, you need to put a tick through that box to close off future claims in the settlement.

BI: Pre-nuptial agreements are becoming more and more commonly used, especially amongst the world’s wealthiest. But what are the misconceptions around the contracts?

AV: The biggest misconception is that pre-nuptial agreements are not legally binding in the UK or that they’re easily broken. But the Rachmacher case changed that.

[In 2010, the UK Supreme Court slashed German heiress Katrin Radmacher’s settlement to her ex-husband Nicolas Granatino to £1 million ($US1.5 million), from £5 million ($US7.6 million), after ruling their pre-nuptial agreement was binding.]

In the US, pre-nuptial agreements are vigorously applied, especially in New York, amongst the wealthiest but England is no less tough on upholding pre-nups than America.

England is looking to tighten up the legislation but the Supreme Court established a precedence with pre-nups after the Radmacher case.

BI: So why is Britain known as the “divorce capital of the world?”

AV: Generally the law in England and Wales is a very generous jurisdiction for the claiming spouse. Ireland and Scotland are different.

But it’s not a “free market.” You have to still adhere to having some form of residence here. But since London is such an international city, it has everyone from oligarchs, to the world’s wealthiest having a home here, whether a second, third or fourth home, and if a couple are going through a divorce, England is the most advantageous to file a claim.

England’s legal system is one of our greatest exports, if people want to use our courts, then maybe we should facilitate that.

BI: What have you seen as one of the most interesting trends in divorce cases over the last year?

AV: A few months before the General Election, everything went really quiet. But as soon as the results were in, we saw a big upsurge in people seeking a divorce. I suppose they were looking at who would get into power and how that party’s policies would affect their fortune.

Also, it gave people something to talk about. All everyone could talk about was the General Election but when that was over, some people maybe just realised that they had nothing in common and nothing to talk about.

Divorces cases for the wealthy don’t usually revolve around the boom and bust cycle of regular people.

Women, who are usually the initiators of a divorce, feel more comfortable in doing so if there is a prospect of economic prosperity and confidence that they will be financially stable. It’s a great step towards freedom and an easier way to exit a relationship knowing that there will be a good financial pay off.

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