Barclay case a warning to those who fail to pay divorce settlements

A case involving the former owner of the Ritz hotel demonstrates what can happen to anyone who fails to comply with a financial remedies order.

In March 2021 Sir Frederick Barclay who, with his deceased twin brother Sir David, built a business empire that included the Ritz hotel, was ordered by Mr Justice Cohen to pay his ex-wife, Lady Hiroko Barclay, lump sums totalling £100 million, to be paid as to £50 million in 3 months and the remainder in a little over one year.

It was one of the biggest divorce settlements ever in this country.

But it has not been paid.

And now Sir Frederick, who is aged 87, is facing the possibility of being committed to prison, after Lady Barclay issued contempt proceedings for non-payment.

However, before Sir Frederick is committed to prison Lady Barclay will have to show that Sir Frederick has the means to pay the lump sum, and that he had wilfully refused or neglected to pay it.

Sir Frederick argues that he does not have the means to pay, as his fortune is all held in trust for his daughter and nephews, and his nephews had blocked his attempts to access his funds.

And at a hearing in July Mr Justice Cohen ruled that Lady Barclay had failed to prove that Sir Frederick has the means to pay. He did, however, make clear that this ruling did not in any way reduce Sir Frederick’s liability.

But Sir Frederick may yet face prison for his failures to comply with court orders. Mr Justice Cohen did find him in contempt for failure to pay a sum of £245,000 in legal fees and delayed maintenance, and gave him six weeks to pay that sum.

At a further hearing this month it transpired that Sir Frederick had paid that sum, with the help of a loan from his daughter. His nephews had also been helping him with his legal fees. Accordingly, he avoided being sent to prison.

But the original lump sum and legal fees now amounting to more than £1 million, as well as further maintenance payments for Lady Barclay, are still outstanding.

Mr Justice Cohen gave Sir Frederick a further three months to pay, saying that he wanted to hear of real progress in the payment of the lump sum.

And Mr Justice Cohen also rebuked Sir Frederick and his nephews for failing to pay a penny of the divorce settlement. He said: “It should be a matter of shame for Sir Frederick and his nephews that Lady Barclay is left with next to nothing by way of financial resources for the future … It seems to me extraordinary that every member of the family is prepared to put their hands into their pockets to help Sir Frederick avoid prison but will do nothing to help assist the greatest victim in this, namely Lady Barclay.”

The case is a demonstration that everyone, no matter who they are, must comply with court orders. As counsel for Lady Barclay said: “There is a real public interest that men in Sir Frederick Barclay’s position, captains of industry, media moguls, knights of the realm, like anyone else in this country, ignore court orders at their peril.”

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Photo by Elena Theodoridou on Unsplash