Often separated couples are able to reach an agreement between themselves regarding what should happen with their family finances. Either sitting around the kitchen table or otherwise amicably discussing matters, they decide what should happen with the house, the money, their assets, without formalising that agreement legally.
They proceed on the misconception that if they obtain the ‘Decree Absolute’ then that will be the end of their financial relationship too – and any agreement they have reached in respect of the finances is somehow ‘set in stone’ by virtue of the Decree Absolute having been made.
However, there is no time limit in respect of making a financial claim from one ex-spouse to another, even after the final order of the divorce (decree absolute) has been granted. Even once you have the final order of the divorce – the Decree Absolute – it is still open for either of you to make a financial claim upon the other despite any informal agreement reached between you both, no matter how many years may have passed since your divorce (except where you have re-married, which limits the potential financial claims you can make).
The recent reporting of the case concerning Mr Vince, the husband and owner of Ecotricity Group Limited (valued at £57m) and his ex-wife Ms Wyatt, has again highlighted this perhaps surprising and often misunderstood aspect of divorce law.
The outcome of this case became public in June 2016: Wyatt v Vince  EWHC 1368 (Fam)
In the Supreme Court judgment in this case on appeal, Lord Wilson noted that:
“Consistently with the potentially life-long obligations which attend a marriage, there is no time-limit for seeking orders for financial provision or property adjustment for the benefit of a spouse following divorce. Sections 23(1) and 24(1) of the 1973 Act provide that such orders may be made on granting a decree of divorce “or at any time thereafter”.”
The Wife in this case chose to make a financial application against her ex-husband some 19 years after their divorce. The relationship had broken down some 31 years prior to the court hearing the application.
In the years that had passed Mr Vince had built an impressive business empire providing eco-friendly power, by way of wind-turbines.
Lord Wilson in his Supreme Court judgment noted the ‘formidable difficulties’ that the wife had in pursuing her financial application:
- The marital cohabitation subsisted for scarcely more than two years;
- The relationship broke down 31 years ago;
- The standard of living enjoyed by the parties prior to the breakdown could not have been lower;
- The husband did not begin to create his current wealth until 13 years after the breakdown;
- The wife has made no contribution, direct or indirect, to its creation.
The parties, after protracted and expensive litigation, eventually reached an agreement between them, which was then approved by the court.
They agreed that Ms Wyatt should receive £300,000.00 of her ex-husband’s assets – her original claim was for a fund nearer to £1.9m.
It must also be noted that both parties had clearly spent considerable sums on legal costs, which would be deducted from Ms. Wyatt’s lump sum once paid.
It would appear, perhaps, that Ms. Wyatt eventually compromised her claims, due to the mounting legal costs on her side, which would eventually have to be paid from any lump sum received. The husband on the one hand would have been able to cover any legal costs whilst the Wife was no doubt hampered by costs.
This is a paradigm example of the potentially negative implications of not pursuing a clean break financial order at the time of divorce.
It is only when you obtain a ‘clean break’ financial order, which is approved by the court, that you have that protection.
However, this is not to suggest that such an application is straightforward, as highlighted by Lord Wilson’s comments on the numerous legal hurdles Ms Wyatt faced, especially where an application is pursued so long after the end of the relationship.
A further overriding factor is that, to pursue a claim long after the relationship has ended and the decree absolute has been granted, for both parties it has involved, no doubt, considerable legal cost and, of course, the personal cost in terms of the stress, time and investment it takes to deal with protracted litigation, which took the parties at one stage, on appeal, to the Supreme Court. These effects are not to be underestimated.
In summary, for those whose fortunes have faired well since their divorce, it is a stark reminder that such claims remain possible against them.
For those considering a financial claim long after the divorce has occurred, it is clearly not an easy route, but in the absence of a clean break, it remains an option without any limitation of time.
Katy Zikking is a specialist family solicitor at Harbour Family Law Solicitors. You can contact her by e-mail at: email@example.com or by calling 01179 055141 or 01275 390458. Katy is a trained Collaborative solicitor. www.harbourfamilylaw.co.uk/methods
Katy has over 16 years experience of helping clients divorce – protecting their financial and emotional best interests.
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