<i>Charman</i> Judgment

22 MAY 2007

The judgment in Charman v Charman was handed down by the Court of Appeal on Thursday 24 May. The appeal, which was dismissed, was by John Charman against the award made by Mr Justice Coleridge to Beverley Charman in Charman v Charman [2006] EWCA 1879; [2007] 1 FLR 593. The appeal was heard by the Court of Appeal over the course of three days at the beginning of March 2007. Insurance magnate John Charman was challenging the decision to award his former wife £48m of their £131m fortune which was built up entirely over the course of their 27 year marriage. That award had been justified by Mr Justice Coleridge sitting in the High Court on the basis that some departure from equality of division was appropriate as a result of the special financial contribution made by Mr Charman to the matrimonial assets.The details of the appeal can be seen at May [2007] Fam Law 450. A summary of the Court of Appeal judgment and a copy of the transcript can be found under Cases below.

James Freeman, solicitor at City law firm Speechly Bircham LLP, comments:

'John Charman's team, which numbered five counsel including two QCs, have clearly tried every argument they could come up with in order to reduce on appeal the largest financial award on divorce in English legal history. His wife's equally formidable phalanx of legal advisors have, however, succeeded in repulsing his assault.

In order to succeed, Mr Charman was always going to have to bring down, or at least dent, one of two bastions of the law in this area. One is that all resources available to the parties, including assets held in trusts, should be taken into account. The other is that, in coarse terms, where there is more wealth around than the parties actually need, the approach is '50/50 or why not?' In the event both remain unscathed. In fact the concept of equal sharing seems now to be strengthened from a 'yardstick' to a 'principle'. The fact that such shades of meaning require debate in the higher courts may itself be of no small concern to litigants. Nonetheless, Mr Charman's staggering wealth generation during the marriage ranked as a special contribution, justifying a departure from equality.

Where there are trust interests, even huge ones as in this case, it is more and more clear that where a party can probably rely on the trustees to ride to his assistance laden with funds, the court will include those funds among the parties' resources. Indeed I would ask how the Court could possibly effect justice between the parties were this not the case.

The most interesting aspects of this judgment may be those found in comments as to the future direction of the law. There is a candid admission that London is now viewed as the 'divorce capital of the world' and it is an open question whether this is desirable in a jurisdiction keen to attract wealth from around the world. Perhaps because of this there is also strong support for prenuptial agreements. Even though at this point they are influential rather than binding, it is increasingly obvious that no wealthy, engaged and sane individual should be without one.'

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