A landmark Supreme Court decision could have major implications for lawyers advising clients with an ex-spouse whose financial situation has greatly diverged from their own since the divorce.
In Wyatt v Vince, the court ruled that the ex-wife of energy supplier Ecotricity’s founder could proceed with a claim against her former husband even though it is more than 20 years since they divorced. He is also required to pay her legal costs.
The ruling appears to pave the way for anyone without a completed financial order to bring a claim against an ex-spouse regardless of how long ago they divorced. But lawyers appear to disagree on whether it will lead to a flood of historic cases being reopened.
Elizabeth Hicks, head of Irwin Mitchell’s London family law team, said: ‘While any good divorce lawyer should ensure that all financial matters are finalised and immune to future claims, it is crucial that any divorcees who don’t have financial orders in place review their situation as they may now face claims based on wealth acquired after the divorce.’
Dale Vince married Kathleen Wyatt in 1981 when they were both penniless travellers living a ‘new-age’ lifestyle. They divorced in 1992. In 1995 Vince founded Ecotricity, now one of the UK’s biggest green energy companies. He is said to be worth £107m.
Wyatt took Vince to court 22 years after they divorced seeking £2m, claiming he rendered her destitute while he grew his business.
The High Court ruled that her claim should be considered but this was overturned by the Court of Appeal after Vince argued it had been lodged too late.
Jo Edwards, chair of family lawyers group Resolution, said: 'The Supreme Court has made it clear that the draconian power to strike out family proceedings simply does not exist, but stress that the court will consider the merits of such applications on a case-by-case basis.
'If Ms Wyatt had lost her appeal, Resolution was concerned that people without access to legal advice as a result of the legal aid cuts would have been at risk of having their applications struck out without proper consideration simply because of delay, along arbitrary lines.'
She added: 'But it’s also important that people who have become wealthy over time are not exposed to potentially opportunistic claims many years after a marriage has broken down. We want to see reform of the law around financial provision on divorce. Part of that is a desire for greater clarity and a clearer intention to get couples to financial independence sooner.'
Mishcon de Reya, which acted for Ms Wyatt, said: ‘We are pleased that the Supreme Court has found in favour of our client Kath Wyatt and that her application can continue. We have always believed that our client has a strong case, and we welcome the clarity of this decision by the Supreme Court.’
Richard Hogwood, a partner at Stewarts Law, commented: ‘Leaving the door ajar to Ms Wyatt to make a financial claim against wealth built up by her ex-husband in the 20-plus years since they divorced will surely raise fundamental questions about fairness in the family justice system. The bitter pill delivered by the judgment will no doubt be even harder to swallow for Mr Vince as he has to provide her with the funds to pursue it.’
He added: ‘This is a salutary reminder that financial claims can linger long beyond the point of a divorce if not dealt with properly.’
Michael Gouriet, partner in Withers' family law team, stressed that the extraordinary circumstances of the case mean it will not open the floodgates on historic claims being reopened and appealed.
He said: 'The judgment merely stresses that Ms Wyatt is entitled to be heard and the key resulting question is whether she will now get any retrospective award in recognition of her contribution for raising their son. The judgment warns of the "formidable difficulties" she faces in this regard, but [a] hint at fairness indicates that she may not leave empty-handed.'
However, Moore Blatch disagreed, arguing that the judgment would indeed 'open the floodgate' for tens of thousands to claim against spouses where no financial order was created at point of divorce. The number of divorces with no accompanying financial remedy application (financial order) has been steadily growing over the past decade, it pointed out, to 50,000 in 2012 alone.
Resolution's Jo Edwards said it will now be interesting to see how the court approaches Wyatt’s substantive claim, with clear indications from Lord Wilson of the likely limits of her claim in view of the facts of this case: 'If she had pursued her financial claims at the time of separation, there would likely have been a capital clean break at that point and no ability to come back and claim more now.
'It seems unlikely that she will be able to sustain a needs-based claim. She is more likely to succeed on the basis of her contributions through caring for the children after the marriage breakdown, but her delay in bringing a claim may well dictate otherwise.'
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