The role of a Financial Director – a life in the spotlight
There was an audible sigh of relief across the divorce capital of the world last weekend when Mrs Justice Roberts delivered her decision on Cooper Hohn v Hohn — as the news sunk in that there is still much to fight about and “fairness” in all its subjective glory remains the ultimate test for divorces of the super-rich. We now know that one of the last principles supporting London’s dominance of the divorce wife market, a mandatory 50:50 split of all resources for the very wealthy, is still there for the taking.
Jamie and Christopher Cooper-Hohn met in court for ten days this July and Mrs Justice Roberts’ decision five months later divided the available resources of $1.5 billion so that Mrs Cooper-Hohn received 36 per cent, or about $220 million short of the prized 50:50 that many thought was in reach. With each percentage point being worth £50 million, this was a court battle that was always going to happen. Fortunately Mr Cooper-Hohn is reported as saying “I do not really care about money” and is said to be able to recover the loss of this settlement within about 12 months.
This was, in part, a rerun of the Charman divorce of 2007 when the Court of Appeal was asked to reconsider the financial pot available for division and the extent to which Mr Charman’s “special contribution” should impact on the overall division of assets - in that case a more modest £131 million. The appeal was dismissed and Mrs Charman’s award of 36.5 per cent of the assets upheld, a percentage that is beginning to sound familiar.
Statute compels the courts to consider “the contributions which each of the parties to the marriage has made or is likely to make to the welfare of the family, including any contribution by looking after the home or caring for the family”.
Mrs Justice Roberts was satisfied that Mrs Cooper-Hohn’s entire working day was devoted to “discharging her role in the home or working for the foundation” (a charitable trust established by the family). Her lawyers asked what more could she have done to qualify for equal treatment with the husband in terms of financial outcome? The answer appears to be very little because the judge found that Mr Cooper-Hohn had made a contribution over and above his wife, unmatched by her in terms of the joint endeavour of the marriage.
Mr Cooper-Hohn was found to be a “financial genius” and to the extent that he was, he passed the test of special contribution which led to the unequal division of the resources of the marriage. The judge gave no assistance to the genius, contemplating divorce who does not have extraordinary wealth, and ducked completely the issue of whether, by acknowledging special contribution (attributable usually to the husband) she was going against the policy objective of non-discrimination. This was put as “an argument for another day”.
Although divorce courts will continue to value resources of the marriage at the date of the hearing of the case, they are more likely from now on to consider, as a result of this case, only the resources accumulated pre-separation, where there is sufficient wealth.
For the wealthy there are now probably three categories of divorcing family. Those with wealth under £6 million to £10 million (subject to age and regional factors) where assets are likely to be divided on the basis of need, how much or how little you can get away with; those with wealth exceeding £10 million but under £50 million, regardless of genius, where assets are likely to be divided equally; and those above the £50 million mark where undoubtedly the special contributor (mostly husbands) will say that the bar has now been set at 36 per cent.
First published in The Times online on 18 December 2014.
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