Landmark ruling may open floodgates to historical financial claims decades post-divorce

The Supreme Court has recently allowed an appeal which could make a lot of divorcees very nervous about their financial position, even if their divorce was finalised decades previously.

By Sarah McCarthy, Linder Myers.

The highest court in England and Wales ruled in March 2015 that a former wife could bring a claim for financial provision against her ex-husband despite the couple having been divorced some 20 years earlier.

The couple, who were new age travellers during their marriage, had divorced without securing an order from the court stating that neither party could make a financial claim against the other in the future.

The couple had little assets at the time but the husband went on to become a multi-millionaire with an estimated wealth into the tens of millions of pounds.

The judgement is likely to affect a significant number of couples who perhaps did not consider this important at the time of their divorce as they may have been very young at the time and in the early stages of their careers which later proved to be financially lucrative, or those who had not envisaged having any future wealth at the time of their marriage breakdown.

The Supreme Court ruling has increased public awareness that, unlike many other legal claims, there is currently no limit to making a financial claim against an ex husband or wife post-divorce if a full and final financial settlement with provisions for future wealth has not been agreed at the time of their divorce.

The implications for a potential floodgate of historical financial claims now being brought is eye watering and couples who may be vulnerable are advised to check that they have correctly addressed a full and final financial settlement with their ex- partner.

The number of divorcees who don’t have the benefit of a court order confirming how their financial assets were divided at the time of divorce, and providing for a financial ‘clean break’, is likely to increase given the growing number of individuals who are now representing themselves in divorce proceedings in the mistaken belief that a decree absolute means the end of the matter.

In a contradictory ruling, made in the Court of Appeal just three weeks prior to this case, a judge ruled that the ex-wife of a millionaire racehorse surgeon was not entitled to lifetime maintenance from her ex-husband following an 11 year marriage.

Both cases send a clear message to divorcing couples – make the appropriate financial provisions when your marriage breaks down both for now, and the future.

A decree absolute brings an end to a marriage, not the end of financial claims which can come back to haunt individuals long after they have moved on to pastures new, and maybe to new relationships. This can be in the form of applications for the sale or transfer of a property, lump sum claims and pension sharing orders and can have devastating effects.

Divorcing couples also need to be aware that if a consent order is not made dismissing any future financial claims being made against them, and their ex-partner subsequently decides to pursue this at a later date, the courts will look at the value of their assets at the time of the claim and not the value of their assets at the time of divorce. At the time of writing, the court hadn’t gone as far as to say how much the former wife of the multi-millionaire will be entitled to, but it certainly has a significant ‘nuisance value’.