Something special?

Giggs has announced that it is his intention to argue that he is a “genius”, and that his footballing skills and 29 year career, which have led to his estimated £40m fortune, amounts to a ‘special contribution’ which justifies a financial settlement in his favour.

History of ‘special contributions’

The Matrimonial Causes Act 1973 sets out the factors to be considered by the court when making a financial order on divorce, one of which is “the contributions which each of the parties has made… to the welfare of the family” (s.25(2)(f)).

In the case of Cowan v Cowan [2001], a successful ‘special contributions’ argument saw a departure from equality in the husband’s favour, awarding him 62% of the ‘marital pot’. In that case, the husband’s development of his plastics business was regarded as “genius” by the court. The court’s view was that a ‘special’ contribution would be any contribution achieved by more than ordinary skill and effort. Rather than only occurring in the rarest cases the court observed that such contributions could be mapped along a spectrum from ‘ordinary’ to ‘stellar’. In other words, a contribution could be regarded as ‘special’ without being exceptional.

The courts have not maintained this broad approach, indeed this has been significantly narrowed. Nowadays, “special” contributions are rarely successful.

How “special”?

The elements of a ‘special contribution’ are not set in stone and continue to evolve as cases come before the courts. Initially the courts were reluctant to specify any test in order to discourage attempts to identify the precise extent to which skill and effort is ‘special’.

In Charman v Charman [2007], the Court of Appeal commented that a successful ‘special contribution’ argument was unlikely to lead to a split of the finances greater than 66.6% in one party’s favour. In SK v TK [2013] the court suggested that a contribution to the family’s financial success would be unlikely to qualify as ‘special’ if the individual had not generated “truly vast wealth”.

Recent cases have provided further guidance. In Cooper-Hohn v Cooper-Hohn [2014], Roberts J suggested that the following questions are asked to determine whether a contribution is ‘special’:

• Can it be said that the individual is the generating force behind the fortune (and the generating force is not, for example, having a great product or favourable market conditions)?
• Does the scale of the wealth depend upon the individual’s innovative vision and ability to develop that vision?
• Has the individual generated truly vast wealth, such that their business success can properly be viewed as exceptional?
• Does the individual have a special skill which is special to them and which stands out despite the partnership aspect of the marriage?
• Would it be inequitable to disregard the individual’s contribution, in all the circumstances?

The recent cases of Work v Gray [2017] and Chai v Peng & others [2017] both generated a significant amount of media coverage with the husbands in both cases contending that they had made a ‘significant’ financial contribution to the welfare of the family and should therefore receive more than the 50% share of the finances generally ordered by the courts on divorce.

Both husbands failed to convince the court that their contributions to the marital fortune should be reflected in the division of assets.

In Work v Gray, the court identified the following points to consider in relation to ‘special contribution’:

• The ‘special contribution’ approach should only apply in “wholly exceptional” circumstances;
• Such a contribution will only lead the court to stray from equal division where it would be inequitable not to do so;
• The amount of the wealth must be “so extraordinary that it is easy for the party who generated it to claim an exceptional quality”; and
• The amount will not be enough, there must be other exceptional elements.

The future – geniuses required?

Significant uncertainty still surrounds how ‘special contribution’ arguments should be treated by the court. The starting point for the court is fairness, which usually means equality. Successful ‘special contribution’ arguments are rare and can only be run in exceptional circumstances. It is presumed that such contributions will be financial (rather than domestic), yet, the law does not specify.

The family law community will wait for the outcome of the Giggs case with interest, to see whether the court will consider his contribution to the footballing world as so ‘genius’ to justify a settlement in his favour.

As Holman J said when considering the Work v Gray case at first instance in 2015: “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.”

This article first appeared on www.tltsolicitors.com on 14 September 2017.

For more information on financial settlements on divorce and separation, please contact me.