News

Many clients will have seen today's press reports concerning the barrister, David Vaughan QC, who has been ordered by the Court of Appeal to pay his first wife, Philippa Vaughan, a lump sum of £215,000, even though it is now 25 years since their divorce.  

The press reports have focused on Philippa Vaughan's own financial position (she reportedly lives in a four bedroom house worth £1m) and the fact that Mr Vaughan has since remarried. It has been presented as a case where an already wealthy first wife has been given a second bite of the cherry and awarded yet more capital, at the expense of the second wife.

In fact, the true picture appears somewhat less dramatic. David and Philippa Vaughan married in 1967, so the marriage lasted some 14 years before their separation in 1981 and 18 years before their divorce in 1985. It is obvious that David Vaughan, as a barrister, will have been earning significantly more than Philippa Vaughan, a charity worker, throughout the marriage. It is therefore not surprising that, on divorce, Philippa Vaughan had the benefit of a joint lives maintenance order in her favour.

Where there is a maintenance order in place, it is always open to either party to apply to vary it up or down, or to apply to capitalise it (i.e. replace the income stream with a capital payment). In this case, David Vaughan applied to cease the payments altogether on his retirement (despite having retirement income of £100,000 a year) and was initially successful. Philippa Vaughan argued that the total cessation of her income stream from him (which had been £27,175 a year), would cause her financial hardship and sought a capital sum in its place. The Court of Appeal agreed with her, considering that her maintenance should continue at the reduced rate of £14,000 a year and awarding her a lump sum of £215,000 in its place. (Whether it was worth her while pursuing the case, when her estimated legal costs are stated to be c.£200,000, is highly questionable!)

While much commentary so far has questioned how Philippa Vaughan's position can be described as "financial hardship" when she lives in a £1m house that could easily be sold and downsized, it needs to be remembered that, as with most cases that make the papers, this does not reflect average living standards and that such descriptions are used in the context of the wealth of the parties. For example, the Court of Appeal judgment states that David Vaughan is planning to sell his existing home and purchase a cheaper one for £2.25m. While the value is not given, clearly his current home is of significantly greater value than Philippa Vaughan's, which makes his argument that she should now sell her home, less attractive.

It is also established case law that the existence of a second wife does not trump the claims of the first, the Court taking the view that a husband's decision to remarry should not allow him to shirk his responsibilities to his first wife (and any children of that marriage).

This case is not therefore, as it has been presented, either new or particularly shocking. It is however a salutary reminder to husbands (or occasionally wives, if they are the wealthier party) of the importance of trying to achieve a clean break on divorce (or at the most, a term maintenance order i.e. of limited duration) or dealing with the issue in a prenuptial agreement, if at all possible, in order to avoid a lifetime of funding a former spouse, followed by an expensive capitalisation at a later date. Clearly a "joint lives" maintenance order sometimes means exactly what it says on the tin.

Click here to see the full Court of Appeal judgement.