01 June 2006

Family news - summer: S v S [2005] EWHC 1717 - special contributions


James Copson
Partner | UK

This landmark “big money” case involved assets exceeding £100m.  Following the breakdown of a 32 year marriage, where traditional roles had been adopted within the family, the wife sought 50% of the marital assets.  The husband was one of the most talented businessmen within his field. Almost the entire family fortune related to his interest in a public company. 

Each spouse had made a full contribution to the marriage, such that in the ordinary way would be likely to lead to an equal division of the marital assets after such a long marriage. The issue for determination was whether equality should be departed from and, if so, to what extent, on the ground that the husband's contribution was exceptional. 

The husband argued that the wife had no strict entitlement to half the assets and a 60/40 split in his favour was justified in light of his unmatched contribution.

Mr Justice Bennett talked of the law on “exceptional contribution” identified by the Court of Appeal in Cowan [2001] and reconsidered in Lambert [2002]. The wife submitted that Lambert introduced a new principle that in long marriages different contributions are deemed to be of equal value and that, for all practical purposes, the “special” contributor is an extinct creature.

The Judge held that Lambert preserved the concept of special contribution although the court should look at each case with a sceptical eye.  It was the husband's genius rather than the sheer size of the fortune accumulated by him that warranted the accolade. If the husband in this case could not bring himself within the concept of special contribution no one else in the field of businessmen and women would be able to.  It would be unjust not to recognise this. Fairness in the circumstances of the case demanded that there be a departure from equality and a clean break was ordered with the husband receiving 60% and the wife receiving 40%. 

Some practitioners have expressed concern that this would cause a re-emergence of a “special contribution” litigation industry.  This ignores that in cases such as Lambert (£20m), and later H-J (£2.7m), the court's ability to give due weight to the special contributions argument was hampered by the impact of fairness that such an argument, if successful, would have had on the division of the more modest assets available.  

The case confirms that special contribution remains a legitimate possibility albeit in exceptional circumstances. The only possible alternative was for the court to set the bar so high that no one would be able to clear it.  That cannot have been the intention of Parliament or the Court of Appeal in Lambert.

Emma Hatley and Gill Doran, Principals in the Family Department, advised the husband.

Category: Article