Posted on 8.9.14
A recent article in Reuters has caught my eye as what is being billed as potentially the biggest divorce case ever, highlighting some material differences between divorce law in the States and in this country.
It concerns a nine week hearing which has just started in Oklahoma County Court between Harold and Sue Ann Hamm. Mr Hamm’s shareholding in Oil Company Continental Resources (in which he is CEO and founder) is valued at about $19 billion. This is $12 billion more than when the couple married 26 years ago.
Apparently under Oklahoma law if the increase in value of his shareholding in the company during the marriage is down to Mr Hamm’s work efforts it will be classed as “marital wealth” and likely to be divided 50/50, but not if the increase in value is due to market factors outside of his control, such as the rising price of oil.
Therefore Mrs Hamm is likely to argue the surge in value is down to Mr Hamm’s prowess as a businessman, and Mr Hamm to downplay his business acumen.
The position is very different in English divorce law. Here the Court can depart from sharing assets equally in favour of one spouse, if their contribution to the family’s wealth is so significant to justify giving them a greater share of that wealth on divorce.
This notion has been christened the “stellar contribution”. Granted the Court is only likely to apply it in cases where there are multi millions pounds worth of assets to fight over.
It is interesting however that in those limited cases the English Court will order the “stellar performer” a greater share of the assets; whereas if the assets have only increased in value because of passive growth (an increase in oil prices say, to go back to Mr and Mrs Hamm’s case) the Court will be less likely to depart from sharing the assets equally.
This is the exact opposite of Oklahoma law. So if Mr and Mrs Hamm were facing each other across an English courtroom he would probably be the one extolling his leadership skills and business vision and she would doubtless be downplaying his commercial virtuosity.
Personally I prefer the English court’s approach to rewarding someone’s particular contributions in those circumstances, as having a more logical appeal than the method used in Oklahoma.
The Oklahoma approach strikes me as counter intuitive – I can almost picture the hushed Oklahoma courtroom this week listening to Mrs Hamm asserting in her evidence “You were a wonderful businessman darling, we owe all our wealth to you” and Mr Hamm’s response “Shucks I was just lucky”.