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UK's wealthy may see win from new divorce rules
LONDON courts have long been home to some of the world's most expensive and acrimonious divorces. Celebrities and scores of wealthy bankers have been caught up in ugly courtroom battles that have - at least in part - been triggered by archaic rules that forced one spouse to blame the other for the breakup.
But the days when Heather Mills poured a jug of water over the head of Paul McCartney's lawyer during their divorce may soon be over. A proposed change to UK laws may make splitting up more attractive, and less painful, for London's wealthy.
A government proposal earlier this month will end the requirement that a spouse needs to blame their partner. Without the need to assign fault, wealthy individuals may file for divorce earlier and end up with a less emotional process.
"This moves it away from the blame game," said Pauline Fowler, whose law firm Hughes Fowler Carruthers represented private-equity executive Randy Work and other financiers. "People won't waste money on an argument that has no bearing on anything other than why the marriage broke down." The proposals introduced last week by Justice Secretary David Gauke replace the previous grounds for divorce with a simple requirement that a person says their marriage has irretrievably broken down. It creates the possibility of a joint application and removes the ability of a party to contest a split.
Most major changes to UK family law have previously come from court rulings, frequently involving London bankers.
The breakup of German heiress Katrin Radmacher and former JPMorgan Chase & Co investment banker Nicolas Granatino led to the acceptance of pre-nuptial agreements. A case involving another JPMorgan banker set standards for the dissolution of assets in civil partnerships.
The UK's latest shakeup won't make it any easier for the high-earning spouse to keep more of the assets, but it will help speed the process along.
The new no-fault rules may "help the rich banker because they make it easier for him to get a divorce", said Diana Parker, a partner who specialises in family law at Withers in London.
Under the current system, unless a couple is already separated for at least two years, the petitioner has to cite adultery, unreasonable behaviour or desertion as grounds for divorce. With a less burdensome process, spouses will be able to file without specifying such a specific reason.
The end of the finger-pointing - and the lengthy separation requirement - will likely cut costs, which are generally borne by the wealthy spouse. It may also end the incentive to drag out the process while the better-paid spouse picks up pay cheques or other financial perks.
The reforms won't be voted on until a gap in the parliamentary schedule, which is currently dominated by another breakup - Brexit. BLOOMBERG