So, you think you’re a genius?
As Ryan Giggs seeks to convince the divorce courts that his ‘genius’ means he is entitled to more than 50% of the assets from his marriage, we look at the ‘yardstick of equality’ and consider Giggs’ chances.
There are many issues for a couple to disagree over when unpicking a marriage. However, in broad terms, the division of matrimonial assets is decided by the courts (in addition to the considerations of S25 of the Matrimonial Causes Act) following a principle known as the ‘yardstick of equality’. This means that matrimonial assets will normally be divided equally, irrespective of who earned them, and there needs to be a very good reason to depart from this. Although there can be disagreement over which assets fall in to which 50%, and many factors must be taken into account in reaching a final settlement, the governing principle of equality remains.
The ‘yardstick of equality’
Until as recently as 2001, the courts looked at the contributions made to a marriage very differently. Parties would receive such capital and income as was appropriate to meet their ‘reasonable needs’. Very often this resulted in the higher earner (usually the husband) retaining the lion’s share of the assets once the parties’ reasonable needs had been met. Fortunately, beginning with the House of Lords’ judgment in White v White [2001] 1 AC 596, and thereafter in the 2 appeals of Miller v Miller and McFarlane v McFarlane in 2006, the Lords injected clarity (some would say common sense) into the legal view of contributions to the marriage. The Lords introduced and clarified the concept of ‘fairness’ which became the overriding objective and was given the, now widely used, description of the ‘yardstick of equality’. The White case unveiled the recognition that contributions to a marriage are many and varied. It is wrong to discriminate between them, and irrelevant who built up the assets and earned the money. The House of Lords’ intention was to stop the discrimination between bread winner and home maker that existed in the pre-White era of ‘reasonable needs’.
Departing from the yardstick of equality – cases of ‘stellar performers’
Set against the backdrop of the ‘yardstick of equality’ there have been a small but significant number of high value divorce cases where the courts have been asked to depart from the principle of equality and award one party (usually the high earning husband) a greater proportion of the matrimonial assets. In the cases where such a ‘genius’ has been recognised such as Cowan v Cowan [2001] EWCA Civ 679, [2001] 2 FLR 192, the judgments refer to ‘genius’ ‘entrepreneurial flair’ ‘spark’ ‘skill’ but there is no formula by which this will be judged. As Peter Hughes QC explained in H v H [2002] 2 FLR 1021, rejecting an argument put forward by a City solicitor that he had made a ‘special contribution’:
“It is not easy to define what may amount to a stellar or really special contribution, but rather like the elephant, it is not difficult to spot one when you come across it”
The Court of Appeal held in the case of Lambert v Lambert [2002] EWCA Civ 1685; [2003] 4 All ER 342 that ‘discrimination is inevitable if the courts look merely at the size of the breadwinner’s fortune, as there is no equivalent way for a homemaker to demonstrate their success’.
Earlier this year, the Court of Appeal rejected an appeal by a US banker, Randy Work, that he was a financial genius and his contribution to the family’s £140 million fortune outshone that of his wife. Back in 2015, Holman J also rejected these arguments. He felt that the word ‘genius’ was more properly reserved for individuals displaying a talent or skill matching that of Mozart or Leonardo Da Vinci. Interestingly, particularly in the context of the Giggs divorce, back in 2015 when he gave his original ruling in the Work case, Holman J commented that:
“It may one day fall for consideration whether a very highly paid footballer, who is very good at his job but may be no more skillful than past greats, such as Stanley Matthews or Bobby Charlton, makes a special contribution or is merely the lucky beneficiary of the colossal payments now made possible by the sale of television rights.”
So, is Giggs a ‘genius’?
There will be many a football fan who would subscribe to the view that, on the football pitch at least, Ryan Giggs is a ‘genius’ – but will that read across into the view the court will take of his contribution to the marriage and the consequent division of matrimonial assets? As we’ve already mentioned, a brief look at the case law shows that the courts do not depart lightly from the principle of equality. Even when they do, the greatest range would be not less than 55%:45% or more than 66%:33% (Sir Mark Potter in the case of Charman v Charman). It is not yet clear what greater percentage Giggs is seeking in his case.
The point that Holman makes is a good one: without the enormous fees paid by broadcasting companies, would Giggs’ contribution been ‘special’ to the extent that he can claim more than 50% of the assets of the marriage? And can he, in the words of Bodey J in Cowan show that he has “…gone beyond what was expected and beyond what the other spouse could ordinarily have hoped to do for himself or herself had the parties arranged their family lives and activities differently”. While it might be hard for Giggs’ wife Stacey Cooke to argue that she could have made similarly astronomical financial contributions, has Giggs ‘gone beyond what was expected’ given his status as a premier league footballer turned manager – and is that due to his own genius or the external factors we’ve mentioned?
As Susi Gillespie, Family Law specialist and partner at Thomas Mansfield Family Law, comments
“‘Cases of special contribution are very hard to establish in law and the courts maintain an exceedingly high threshold on allowing such cases to succeed because doing so diminishes the principle of equal contribution and is in many cases discriminatory”
We will be watching closely as the Giggs case unfolds. While most divorces involve far more modest fortunes than those in this case, it is always interesting to see how the courts deal with the more ‘extreme’ cases, and to take on board any points of learning for the future. We’ll keep you posted!
