"Money Can’t Buy Me Love” – The McCartney Divorce: Fair or Foul?

On a day when stock markets across the world slumped, with the loss of millions of pounds, one person at least made a good return on her investment. The announcement flashed up online and on TV news programmes with all the fanfare of an international incident : - “Heather Mills-McCartney awarded £24.3 million by divorce court!”

For a marriage of just under 4 years, this equates (on the face of it) to £17,000 for each day of Heather’s marriage. Not a bad reimbursement, you might think. Pretty good for a woman who was acting without lawyers.

Except that Heather claimed £125 million, on the basis that she believed Paul’s assets were worth over £800 million. £24.3 million starts to sound paltry in that heady context. Compare it, for example, to the £48 million awarded to Mrs Charman in the London law courts in the recent past – or the basketball legend Michael Jordan who paid his wife £84 million to exit his marriage.

So what is the truth? Is the award a fair and sensible one, taking all the relevant factors into account, or on the “stingy” side when considered in the light of Paul’s enormous wealth?

The facts are these.

Heather and Paul met in 1999 and married in 2000. They didn’t enter into a pre-marital agreement which would have set out their financial expectations if they divorced (Heather says she offered to do a pre-marital agreement but Paul refused). Their relationship was over just under 4 years later, and produced a little girl, Beatrice. Both parties appointed “top notch” London lawyers and the case began, with both sides hoping for an amicable private agreement.

Alas, no agreement was reached. Heather parted company with her legal representatives, and decided to go it alone. The broad results were made public on Monday 17 March by Mr Justice Bennet who published them for all to see.

His robust findings indicate crucially that Paul’s wealth was not £800 million but £400 million. One doesn’t know on what Heather based her assessment of assets but in divorce cases, the courts look at real, “net” value (not a notional or “best case” estimate of value). Halving his worth would automatically reduce the financial award she could expect.

Mr Justice Bennet then said Heather’s financial needs were of “magnetic importance” in deciding the award . This is an important point; it was her reasonable needs which structured the amount, rather than a 50/50 (or any other percentage) approach to sharing Paul’s wealth.

Contrast this to the courts’ approach in recent years in big money cases after a long marriage. These cases gave large awards to wives on the basis that their entitlement to a share in the wealth accrued over a long period. Often the wife gave up valuable career years to bring up the family and to support the successful husband in his ventures. In those cases, one starts by considering if a 50/50 split of assets is fair, and generally speaking, the longer the marriage, the less relevant it is who had the stronger financial muscle.

The Mills-McCartney divorce reiterates a common sense approach - that after a short marriage, the crucial factor is the reasonable needs of the “poorer” party. Not, you will note, their “wants or wish list” but their reasonable needs, as objectively assessed by a judge.

Mr Justice Bennet awarded Heather a lump sum of £16.5 million from Paul. She already has £7. 8 million of her own assets (including property).

The judge’s logic is for Heather to spend £2.5 million of the £16.5 million to buy a house in London (so that Beatrice can have a base in the same country as her father) and that the remainder (£14 million) represents capitalised maintenance for herself. The figure of £14m came from the judge’s decision that Heather could a need for an income of £600,000pa and that £14m invested would produce this amount. In other words, Paul does not have to pay her spousal maintenance at all – she can invest £14m and live on the interest.

Paul need never fear Heather returning to court asking for some of his income in the future. She must use her funds to produce the best income she can for herself

The judge ignored the “conduct” allegations that both Heather and Paul appear to have made against each other, on the basis that such allegations were irrelevant. This is usual in most divorce cases. Bad behaviour has to be really extreme to have any financial repercussion. Heather’s public allegations about Paul’s character and actions do not appear to have earned her any brownie points in court.

Paul is to pay £35,000 pa in child maintenance for Beatrice plus the costs of her nanny and school fees. That sum, on the face of it, seems on the low side given Paul’s likely income, but child maintenance can be increased as a child grows and their costs multiply ; the judge clearly felt that for the time being, this sum would comfortably meet Beatrice’s needs.

You may think that £24.3 million is more than anyone could possibly “need”. Well, yes, to most ordinary folk, that level of wealth seems inordinate. However, context is everything. If Paul’s assets are worth £400 million, then £24.3 million represents a couple of drops in his wealth ocean. Had Heather and he stuck it out for 15 years, the announcement this week would have been of a very different nature and Heather might, perhaps, have emerged from court with fewer scathing comments about the legal establishment.

For further information or advice, contact Yvette Rooke

Published 19/03/2008. The author of this article is Yvette Rooke