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Vanessa McMurtrie Family Solicitor
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The special contributions paradox - a guest blog by Helen Fisher

9/3/2014

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There  is currently being heard in Oklahoma what could become the largest ever divorce  judgment. Part of the parties’ assets is shares in the husband’s company which  are valued at $19 billion. The trial, which began at the start of August, is expected to last a further month. 

One of the main arguments in the case is whether, and to what extent,  the wealth has been built up due to the “special contribution” of the husband.
When the parties married in 1988, the husband’s wealth stood at $16 million. Has this very significant increase been a factor of market growth (his company is in the oil industry) or is it down to his business judgement and management skills? 

If this case were being heard in this country, Mr Hamm would be likely to argue that his contribution to the family’s wealth has been of a “wholly exceptional nature” (Miller v McFarlane, 2006) and that, as a consequence, he should be awarded significantly more than 50% of the assets. Mrs Hamm, in contrast, would be likely to argue that she has contributed equally, not to the growth in the company, but to the family, and that the increase in the value has been largely due to factors outside of her husband’s control (such as the rising price of oil). The “special contribution” argument is experiencing a downturn in the English courts, and the general position is that it is only in truly exceptional circumstances that there will be such a contribution so as to justify a departure from equality, especially when there has been a long marriage. For the argument to succeed, the fortune must be the product of the  exercise of truly exceptional skills or endeavour which is so great that it outweighs the contribution of the other spouse. It is high threshold – in an  English case, the judge said that whilst the husband had ‘undoubtedly worked diligently and successfully and over a long period to amass the assets’, there was ‘nothing special, exceptional or stellar’ about his contribution (H-J v H-J, 2002). 

Taking the above into consideration, one might sensibly expect Mr Hamm to argue that his contribution has been of such an exceptional nature. Not so in
Oklahoma. In an almost paradoxical situation, lawyers for Mr Hamm are expected to argue that the increase in value of his shares has nothing to do with his efforts and is the result of luck. It is Mrs Hamm who is likely to sing her
husband’s praises. Unlike the law in England, in Oklahoma any growth in the net worth of a married couple which derives from work efforts by either spouse is considered “marital wealth” and such wealth is subject to an “equitable”
division. It is not often that wife will compliment her husband to such extremes
in open court but this will be Mrs Hamm’s aim if she is to try to show that the
couple’s wealth has been amassed through her husband’s hard work. The difficulty which Mr Hamm will have is that his company has for many years portrayed him as an astute businessman and innovator. There will no doubt be some interesting legal arguments made on both sides and I would not envy the judge’s task.
Further blog to follow once the judgment becomes known.
Helen can be contacted at Mackrell Turner Garrett on 01483 755609 or by email at Helen Fisher (helen.fisher@mtg.uk.net)  
1 Comment
Vanessa McMurtrie link
9/26/2014 01:39:35 am

Now a recent article on our firms website

http://www.mackrell.com/legal-news/the-special-contributions-paradox/

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    Vanessa McMurtrie, Partner, Hart Brown. Over 20 years experience in matrimonial and family legal matters.

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