Does Hohn confirm that the family courts have lost their intellectual ability? - Kuits Solicitors Manchester
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Does Hohn confirm that the family courts have lost their intellectual ability?

Does Hohn confirm that the family courts have lost their intellectual ability?

29 Jan 2015

The highly anticipated Hohn judgement was delivered in full on 12th December 2014. Although it had been reported weeks earlier that Sir Chris Hohn had been ordered to pay his ex-wife £337 million following their divorce, neither the details of the financial settlement nor the reasoning behind Mrs Justice Robert’s ruling were provided.

Initially, it was reported that the couple had assets of more than £700 million, however no exact figure was given. Although it had been apparent early on that the size of the couple’s wealth was a source of contention, it was not clear how much of a sticking point this actually was, and we had been unaware how significant this factor had been to the size of Mrs Cooper-Hohn’s award.

The difficulty in assessing the couple’s wealth was caused by a dispute over which date would be most appropriate to use when calculating the available assets. Mrs Cooper-Hohn argued that it would only be fair to use the date of trial, which would mean that there would be $1.5 billion available; however, Mr Hohn suggested that in fact the date of separation should be used at which point the total assets were valued at $700 million. The huge discrepancy between these two figures highlights the impact using either would have had on the award and explains why the matter had to be considered so carefully by Mrs Justice Roberts.

Mrs Cooper-Hohn responded to her ex-husband’s suggestion by stating that using the date of separation (March 2012) would be unfair, as this date did not symbolise the complete end of their marriage, as they went on to attend counselling. It was only around November time that they totally abandoned attempts to save their marriage. Despite this, Sir Hohn argued that the excessively large sum of money that he had made following March 2012 should be defined as being ‘post-separation accrual’.

It is important to note that Sir Hohn was not looking to quarantine the post-separation accrual and instead simply did not believe that his ex-wife should be entitled to an equal share of it, due to their respective contributions during this period of time. His argument rested on the fact that following the couple’s separation he had spent his time drawing back significant losses that had been made in 2008 and this had resulted in him generating wealth on an exceptional scale.

The second main point for consideration was whether or not an alleged special contribution by Sir Hohn throughout the marriage should be considered under s25 MCA 1973. In relation to this, Mrs Justice Roberts found it imperative to clarify several times that there was no doubt that each of the parties had made a full contribution in terms of their respective roles. She emphasised that Mrs Cooper-Hohn could not have possibly done any more in terms of her input at home, work and within the couple’s charitable Foundation. Mrs Justice Roberts also stated that discrimination must not occur between the party’s fundamental roles as wife, mother and homemaker, and, on the other hand, as wealth generator. Despite this, however, she felt that it was obvious that Sir Hohn’s contributions had indeed been exceptional, querying that if he does not fit the necessary definition of genius, then who could?

With Mrs Justice Roberts having decided that consideration had to be given to both the post-separation accrual and the special contributions of Sir Hohn, the next and more difficult question was to what extent the award should depart from equality. Reading the judgement, one would assume that Mrs Justice Roberts was going to take an extremely technical approach, as she discusses every single detail of the party’s charitable foundations and talks so descriptively about the tax implications that surround the case. It is therefore somewhat disappointing that the judgement ends with her explaining that she had abandoned attempts of using a strict formulaic approach. Although she acknowledged that this decision would lay her open to criticism, she stated that she believed that her award is principled when assessed by the cross-check of overall fairness.
Although there may be truth to Mrs Justice Robert’s claims, without detailed reasoning one cannot help but assume that her award lacks the consideration it deserves. Sir Hohn had argued that his wife should receive 25% of the global assets; Mrs Cooper-Hohn disputed this stating she was entitled to 50%. An award of approximately 35%, which sits almost exactly in between both party’s suggestions, indicates that a broad-brush approach has been taken by a judge who is trying to appease both Hohn and Cooper-Hohn.

Commenting on the Hohn judgement, Kuits Family team state: “The problem with this judgement is that it appears to dumb down an extremely complicated financial distribution case. One would be forgiven for questioning whether the family courts have lost the intellectual ability to critically analyse complex cases.”

With needs being easily accommodated in high-net-worth cases, using only a small fraction of the couple’s wealth, it seems that the struggle kicks in when deciding how to divide the rest of the finances. Hohn is a perfect example, therefore, that high costs will not guarantee a high level of sophistication when it comes to the financial award; and, for this reason, it is fair to question whether couples of extreme wealth are being short-changed.

To find out more about divorce contact our Family Law team or call 0161 832 3434.

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