Laws of Eve | When is a divorce settlement reasonable?
On July 8, 2016, BBC News reported that former model, Christina Estrada, was awarded a lump sum payment of £53 million against her former billionaire husband, Sheikh Walid Juffali. The settlement reportedly includes one million pounds sterling per year for clothes; and her evidence was that her 'needs' included five cars - three in London and two in the US - the ability to afford a luxury home in London and a countryside home in London-on-Thames.
Although the Estrada settlement appears to be extremely generous, there have reportedly been higher settlements in other cases. For example, Jamie Cooper-Hohn settled for £337 million when her marriage to a London financier ended.
Even under Jamaican law, 'reasonable needs' differ according to the circumstances of each case. For that reason, the parties' lifestyle during the marriage will indicate the standard of living to which they had grown accustomed and, therefore, establish one possible benchmark for a settlement. Of course, that is just one of several factors that a court would consider in determining whether a settlement is reasonable. Some of the other factors set out in the Maintenance Act to which claims for spousal support are ultimately referable are as follows:
- The parties' ability to support themselves
- The parties' likely future assets
- The parties' ages and the state of their physical and mental health, as well as their ability to find employment
- Any other legal obligation the respondent has to provide support for another person
- Any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account.
In order to assess the reasonableness of a settlement, it is important to not only know the expectations of the applicant, but the means and ability of the respondent to afford the amount that is being sought. In Estrada's case, for example, her ex-husband said that his net worth was £13.8 million while her lawyers estimated it to be £8 billion; and the outcome of that case is known.
FAIR, REASONABLE SETTLEMENT
In some cases, disclosure is requested while settlement discussions are in progress, so that the claimant can feel confident that what is eventually accepted is fair and reasonable. If that disclosure is only partial, it could result in future court action as occurred in two cases in England - Sharland v Sharland  UKSC 60 and Gohil v Gohil  UKSC 61.
The two wives in Sharland and Gohil successfully argued that their cases should be reheard because the settlement reached with their husbands were based on fraud, material non-disclosure or misrepresentation as to their husbands' finances. (I will review the details of those cases next week).
The important lesson from Estrada's case is that there are general guiding principles, but no real precedents that allow parties to accurately estimate what the outcome of a spousal support application will be. Instead, the facts of each case must be carefully analysed to determine what is fair and reasonable.