The case of the multi-millionaire ex-hippy

For many years, it was assumed that failing to make a financial claim after a divorce would eventually lead to a kind of unofficial financial clean break. Sooner or later, the point would be reached where it was too late to make a claim and the court wouldn’t entertain it.

Last year, this notion was blown out of the water by the Supreme Court in the case of Wyatt v Vince. The parties had divorced in the eighties and as far as anyone could tell, no financial order had been made at the time; there was almost no documentation remaining from the divorce. When they divorced, Mr Vince and Miss Wyatt didn’t have two pennies to rub together. However, after the divorce, Mr Vince went on to become a New Age Traveller and invented a wind turbine which grew into the business now known as Ecotricity, whose charging points you may have seen at motorway service areas. He became rich beyond the dreams of avarice.

Mr Vince claimed that his wife Miss Wyatt had left it too long. Miss Wyatt argued that she had not, and that she ought to be able to claim against Mr Vince’s assets. He argued that his wealth had been built up in the years after the marriage and that she should not be able to claim against it; she argued that during those years, she had been primary carer for their child and therefore had made a contribution for which she wanted £1.9 million.

Mr Vince, who clearly now has very deep pockets, fought it all the way. He lost the original trial in the High Court, then the Court of Appeal found in his favour, but then the Supreme Court found for the wife. It indicated that she could expect a modest award and sent it back down to the High Court to deal with her application. There was nothing in the rules that barred late applications, even ones brought twenty years later.

Mr Vince reacted to this decision with displeasure, and argued loudly in the press that such claims ought to be banned. By this point he had spent a fortune on legal fees (including a chunk of his wife’s fees too) and at that time I wondered whether he had considered that it might make more sense to offer his ex-wife a lump sum rather than keep spending it on lawyers, not least because he was ordered to pay his wife a costs allowance of £200,000 so she could afford lawyers when she appealed to the Supreme Court and had already been ordered to pay her costs of £125,000 at a hearing in December 2012. His solicitors would no doubt have pointed this out to him, but the very rich do not always have the same aversion to expensive litigation that normal people have.

Once the thorny issue of whether Miss Wyatt was time barred from making a claim was sorted out, my view was that she was likely to receive something to reflect her non-financial contribution as the main carer for their child in the years following their divorce. That, to me, did not seem a particularly difficult argument to run. Section 25 of the Matrimonial Causes Act 1973 says that the court should have regards to, amongst other things, “the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family”. Miss Wyatt seemed to have made a very significant non-financial contribution by bringing up their child while he was building his fortune. I blogged at the time that my view was that Miss Wyatt was likely to get a lump sum of a few hundred thousand pounds, enough to buy a house.

A deal has now been done and had been approved by the Court. Mr Vince has agreed to pay Miss Wyatt a lump sum of £300,000. There’s a fascinating blog by Marilyn Stowe here about some of the other stuff that happened, including a lot of stuff about Mr Vince trying to persuade the court to ban publication of any details about the agreement, which given his willingness to talk to the media last year, seems inconsistent to me.

This case is somewhat unusual to say the least; there aren’t many people who became incredibly rich after they divorce. However, what is not unusual about is that it features a couple who divorce and don’t get a financial clean break order from the court. If you fail to get the order, you are exposed to the risk of a future financial claims being made against you by your ex.

Even if that claim fails because (unlike Mrs Wyatt), there is no real argument about contributions, it will still cost you thousands of pounds in legal fees (probably hundreds of thousands if you are as rich as Mr Vince).

When faced with a divorce financial claim, it is always worth bearing in mind the costs that will be incurred. Mr Vince has to pay his wife £300,000. He has already been ordered to pay her a costs allowance of £200,000 (which she has been allowed to keep) and was ordered to pay costs of £125,000 when he lost the original trial in the High Court in December 2012, and £1,000 when Miss Wyatt recently had to apply to the court for a Dean summons to make him go ahead with the agreement when he tried to add a new clause about confidentiality.

In addition, he will have to pay his own legal fees. Heaven knows what they are; I suspect that his solicitors will have spared no expense, but let’s assume that they’re at least the same as Miss Wyatt’s; i.e. £326,00 (albeit that I suspect that they may be much higher). So, if he’d offered her £300,000 at the outset, he might have avoided at least another £326,000 expense.

Miss Wyatt may also have been overambitious; she was seeking £1.9 million, which always struck me as beng too much. Although Mr Vince has been ordered to pay costs, these don’t cover all of her costs, which will have to be paid out of her £300,000 lump sum. Again, if she’d been more realistic, she might have had a much lower bill.

Many people who do their own divorces do not realise that it is essential that you also get a clean break order. Just getting divorced is not enough.

12 June 2016