By Sally Nash and Anna Watson
This week English Appeal Court judges have ordered a rehearing of Julia Hammans's case against her husband Nicholas Hammans.
Mrs Hammans, who was the director of high-end London department store, Dickson Jones, gave up her career to look after her children when she was pregnant with her first child. Throughout the couple's 21 year marriage Mrs Hammans stayed at home with their two children while her husband's career as an accountant flourished. Mr Hammans is now a partner in PricewaterhouseCooper who earns £800,000 per year and is worth £11 million. During their marriage the couple enjoyed a high standard of living on Mr Hammans's high earnings.
The couple separated in 2004 and their divorce was finalised in 2005. At the time of the divorce a settlement was agreed whereby Mrs Hammans would retain the family home, which is now worth £1.75 million, as part of a larger financial settlement.
In March this year Mrs Hammans sought a payment of a further £2.6 million from her ex-husband. Mr Justice Coleridge, sitting in the High Court Family division in England, ordered Mrs Hammans to sell the family home to fund her living expenses and awarded her £400,000. The judge ruled that she needed £80,000 a year to live on, which she could generate largely from interest on her £1 million savings and by selling the family home.
In October 2014 Mrs Hammans appealed the decision of Mr Justice Coleridge. She claimed that the division was unfair and that she is entitled to compensation from her ex-husband's earnings to take account of the working life she"sacrificed" which allowed Mr Hammans to advance his career.
This case brings to light issues in relation to economic advantage and disadvantage. The default position in Scots law is that matrimonial property should be shared equally unless there are arguments in favour of unequal division. One such argument is that one party has been economically disadvantaged and the other party advantaged by the marriage. As was the case with Mrs Hammans, giving up a successful career to look after children while the other party's career progresses is a situation which often arises in the cases that we deal with, and that can result in some cases in the capital assets being divided unequally in the disadvantaged party's favour.
Perhaps of more interest, however, is the basis upon which Mrs Hammans claims the decision of Justice Coleridge was unfair. In Scotland, even if it was accepted that there had been an economic disadvantage the perceived disadvantage would not be resolved by seeking to share in the other party's income going forward. A fundamental principle in Scotland is that the parties should have a clean break after divorce, and the Scottish courts seek to apply that principle. Mrs Hammans arguments that she should be compensated from her husband's ongoing earnings would be a non-starter in Scotland.
In keeping with that clean break principle, it is inconceivable that Mrs Hammans would be able to come back to court at this late stage in Scotland. Once a settlement has been reached there is no"second bite at the cherry". The parties are each bound by the terms of any agreement reached or award ordered by the court, and accordingly able to rely on same. This certainty is one of the many positive benefits of the Scottish system.
There are a number of financial issues which require to be resolved when a married couple separates, and if you would like any more information please contact a member of the Divorce and Family Law Team, who can advise on all aspects of family law.