A recent Supreme Court decision has potentially alerted thousands of divorcees to the possibility of making a financial claim against their former spouse, even if their marriage had ended many years before.
Kathleen Wyatt, 53, secured a judgment that allowed her to proceed to make a claim for a lump sum settlement from her wealthy former husband Dale Vince, even though the couple had divorced in 1992, their lives then taking very different courses, with Mr Vince acquiring all of his fortune years afterwards following the foundation of his ‘green energy’ company Ecotricity, whilst Ms Wyatt reported a struggle to bring up the parties young son on a limited income.
Although Mrs Wyatt’s total claim for £1.9 million (an estimated two per cent of Mr Vince’s total wealth) is thought unlikely to succeed, (her final award, if one is made, will be for much less) the judgment indicated that her claim was legally valid and re-enforced a long held but often misunderstood principle that there is no limitation period restricting a financial application on divorce (other than re-marriage or death).
Most people will, quite understandably, assume that the conclusion of a divorce itself and the granting of a decree absolute will not only end the marriage but also prevent all further applications either party might make against the other, such as a claim for maintenance or a claim against a person’s property or pension assets.
In fact this is not the case, and whilst a divorce will of course end the marriage itself, leaving the parties free to re-marry, unless there is a distinct and separate financial order made by the court, the possibility that one party might bring proceedings against the other remains a real risk.
The ruling in the Wyatt case means that there is no guarantee that a court will regard assets acquired after divorce and separation as ‘safe’ from any claim by a former spouse or civil partner.
Indeed, many people who may previously have thought that they had no such claim may now be considering their position in light of the publicity surrounding this judgment and deciding whether they too should make an application just like Ms Wyatt. It is estimated that only half of couples who divorce take any steps to formally settle their finances, leaving thousands of people vulnerable to an application from their former spouse years after they had thought that the divorce had ended the possibility of any such claim.
It is possible after the grant of a decree nisi of divorce to apply to the court for a financial order by consent, whereby both parties agree the basis of their settlement and ask the court to officially approve the order, making it legally binding on both parties.
A consent order will commonly include a stipulation that bars out any further claims either party may make against the other, (as will many final orders in the case where there is a contested financial application). This is not an expensive or difficult process, providing both parties agree. An order might even state that there are no particulars of any settlement, save that any future claims cannot be brought, allowing both parties to move forward with certainty that they have resolved all issues relating to their marriage once and for all and not ‘looking over their shoulders’ for the rest of their lives, however successful or otherwise those lives may turn out (as Mr Vince put it).
It’s best to think of a financial order as drawing a line in the sand meaning you can move on with your lives both emotionally and financially!
