The long-running divorce between Russian oligarch Farkhad Akhmedov and his former wife Tatiana Akhmedova has settled at last.

In 2016 the High Court ordered that Ms Akhmedova should receive the sum of £453 million, believed to be the biggest divorce award in this country. Since then, Ms Akhmedova has been attempting to enforce the award.

The latest round of this battle took place in the High Court in London recently, when Mrs Justice Knowles found that Mr Akhmedov had transferred money to various trusts, a company and the parties’ son Temur, with the intention of putting his assets beyond the reach of Ms Akhmedova. Accordingly, she ordered the trusts and company to make payment to Ms Akhmedova, and Temur was ordered to pay her some £75 million.

In the course of her judgment Mrs Justice Knowles described the Akhmedov family as “one of the unhappiest ever to have appeared in my courtroom.”

It has now been reported that the case has settled, with Ms Akhmedova agreeing to receive the sum of £150 million. Representatives for Mr Akhmedov said that he had agreed to pay her £100 million in cash and about £50 million in artworks. (The family assets include a modern art collection, which includes pieces by Andy Warhol, Mark Rothko and Damien Hirst, and which has been valued at £112 million.)

A spokesman for Mr Akhmedov claimed that Ms Akhmedova had ended up with “not a penny more” than she had been offered by Mr Akmedov six years ago.

It has also been reported that Ms Akhmedova has spent some £75 million on litigation funding and legal fees.

As far as we are aware Ms Akhmedova has not commented, either upon the settlement or the issue of her costs.

All of the above suggests, however, that Mr Akmedov may have got his way (although the settlement will still have to be approved by the court), and that Ms Akhmedova has lost out considerably, as a result of Mr Akhmedov’s failure to comply with the 2016 order.

That would certainly an unhappy message to take from this case, on top of the comments made by Mrs Justice Knowles.

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It may be thought that the idea of being imprisoned for failure to pay a debt belongs in the dark past of our legal history.

But anyone who believes that a debtor cannot now be sent to prison would be quite wrong.

Someone who is owed money under a court order, including a financial order made on divorce, can apply to the court for the debtor to be committed to prison for a term not exceeding six weeks, or until payment of the sum due. This procedure is known as a ‘judgment summons’.

And a recently published case is an example of this occurring in practice.

The case concerned a lump sum order made in February 2020. Under the order the husband was to pay to the wife the sum of £5,878,732. That sum was to be paid by instalments, the first instalment of £50,000 to be paid the day after the order was made, a further instalment of £647,732 to be paid by the 2nd of March 2020, and the remaining sum of £5,181,000 to be paid by the 2nd of March 2022.

The husband did not pay the first two instalments, and the wife applied for a judgment summons.

Before committing the husband to prison the court had to be satisfied that the husband had the means to pay the instalments, and refused or neglected to pay them.

The judge was not satisfied that the husband had the means to pay the second instalment, but was satisfied he had the means to pay the first instalment, and had refused or neglected to pay it. Accordingly, he sentenced the husband to the maximum prison term of six weeks.

However, the judge said that he did not want the husband to go to prison – he wanted the wife to be paid the money she was due. He therefore gave the husband 14 days to pay the sum of £50,000. If he did not pay that sum in full by then, he would go to prison for six weeks.

If you are owed money under a financial remedies order made on divorce then you should take legal advice as to how you may enforce payment. We can find you an expert lawyer that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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A recent Family Court case says at least two important things about sorting out finances on divorce. It also says a number of other things, but we will concentrate on two here: the perennial issue of depleting the available assets by running up excessive costs, and the age-old settlement method of ‘splitting the difference’.

The two things are, of course, closely connected: the best way to keep your legal costs to a minimum is to resolve the matter by agreement, and this may obviously entail each party settling for less than they were originally seeking.

The case concerned the division of assets of some £2.6 million, most of which had been inherited by the husband. Very sadly, in 2018 the wife had been diagnosed with Young Onset Alzheimer’s, which will have a significant effect on her life expectancy and medical needs during her remaining years.

We are told that at the start of the case the wife was seeking £1.2 million of the assets, and the husband proposed that she should receive £750,000, a difference of £450,000.

We are also told that the combined legal costs of the parties came to about £483,000, slightly more than the difference the difference between the two proposals. As the judge said:

“This is not a “big money” case by any stretch; the costs represent about 18% of the wealth, which is clearly disproportionate. To that should be aggregated the emotional toll which usually accompanies litigation of this nature.”

This is such an important message. So often parties to financial disputes drain the very assets they are arguing over, by running up excessive legal costs.

And in the end the judge ordered that the wife should have £953,000, which represented some 37 per cent of the assets. We will not go into the details of how he calculated this sum, but it is notable that, as in so many cases, the award ‘splits the difference’ between the parties’ proposals.

The lesson is clear: very often the answer to how a case should be settled lies quite simply between how much each party is proposing. This can surely not be unexpected, given that each party should set out openly what their proposals are. The court therefore knows the proposals before deciding the case, effectively setting an ‘upper limit’ upon what each party should receive.

Of course, this is not to say that the court will always ‘split the difference’. Sometimes, it may decide that it is fair to award a party all that they are seeking.

The ultimate lesson is to take expert legal advice, and to pitch any proposal accordingly.

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Divorce of course arises from past events that led to the breakdown of the marriage. But that does not mean that the divorce itself must be all about what has happened in the past.  

All too often divorcing couples become mired in arguments about the past, but all that achieves is more animosity, more delay and more legal costs.

Of course, it can be difficult to put the past behind you, especially when those events had such a significant effect upon your life. The temptation to raise past events in divorce proceedings can be overwhelming.

And it doesn’t help when one sees divorcing celebrities dragging up the lurid history of their marriage in the popular media every day. The idea that this is ‘normal’ behaviour by divorcing couples is a trap that is all too easy to fall into.

And many people going through divorce think that the past behaviour of their spouse will be of crucial interest to the court in determining what orders it should make.

But, save where there has been domestic abuse, the court is largely not concerned with past behaviour. The real concern of the court is what should happen in the future.

Let us look at the three main things involved in divorce proceedings: dissolving the marriage, sorting out arrangements for children, and sorting out finances.

It is true that at present if a person wants to get divorced before they have been separated for two years they will need to prove that their spouse has committed adultery or behaved unreasonably. But the court isn’t really concerned about these things, only that the marriage has irretrievably broken down. And findings of adultery or unreasonable behaviour will usually have no bearing whatsoever upon other matters, such as children and finances.

And when no-fault divorce comes into force, now expected to be next year, then it will not be necessary at all to show why the marriage broke down.

Arrangements for children are all about the future: deciding how best the children should spend the rest of their childhood. Of course, past events may be relevant to that decision, but in the vast majority of cases they do not change the simple position that children should continue to have as full a relationship as possible with both parents.

Lastly, sorting out finances on divorce is in most cases driven by the future financial needs of each party, not about what has happened in the past. In particular, bad past behaviour by one party will be of no relevance to the financial settlement, save in the most extreme of cases.

You can’t change the past, but you can change the future. Divorce is not about what has gone before, but about making a new start, and ensuring you have the best arrangements in place for that future, for yourself, and especially for your children.

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Maintenance for a spouse, usually the wife, is a relatively rare thing nowadays. But spousal maintenance orders are made, and sometimes they are for a purely nominal sum, such as five pence per annum.

But what is the point of such an order? The point is that, like any maintenance order, it can be varied (i.e. increased) at a later date. A nominal maintenance order of itself is meaningless, but it does give the court the opportunity to increase the maintenance at a later date, if circumstances require.

So what kind of circumstances may give rise to a nominal spousal maintenance order being increased? A recent family court case has shed some light upon this.

Before we look at the case we should say that the law essentially states that a maintenance order may be varied (i.e. increased or decreased) if there has been any change in the circumstances (in particular the financial circumstances) of either party.

But, as we will see, to trigger the variation of a nominal order, the change in circumstances has to be something significant, rather than just an increase or decrease in the income or outgoings of either party.

In the case the wife had a nominal maintenance order made in her favour in 2012. She worked as an airline pilot and, when the pandemic struck, she lost her job. She therefore applied to the court to have the nominal maintenance order increased, to cover the shortfall in her income.

The family court was not prepared to increase the order. The judge said that there was no causal connection between the marriage and the wife’s loss of employment, in these circumstances nearly a decade later. Further to that, it was probably the case that the wife would find new employment once the pandemic was over.

Putting it another way, the judge said that if the wife had, relatively soon after the end of the relationship, suffered a significant work-related disadvantage as a result of the marriage, then the court might be prepared to increase the nominal order. That is not, however, what happened here.

Accordingly, the wife’s application was dismissed.

If you or your former spouse are considering applying to vary a maintenance order, then you should seek the advice of an expert family lawyer. We can find you an expert lawyer that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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The Family Court has refused to publish in full the judgment in a financial remedies case involving the billionaire part-owner of The Daily Telegraph Sir Frederick Barclay. However, the judge did make part of the judgment public, to let the public know about Barclay’s ‘reprehensible’ behaviour.

The case concerned an application for financial remedies made by Barclay’s wife, in connection with their divorce. The case generated considerable media interest, and Barclay argued that no part of the proceedings should be published.

The media, on the other hand, argued that as Barclay is a public and political figure there was a public interest in the judgment being published in full, particularly as the judge, Mr Justice Cohen, had criticised Barclay for his conduct during the course of the proceedings.

Mr Justice Cohen said that Barclay had repeatedly ignored orders to produce documents and answer questions. He had also ignored an order to sell a yacht and produce the proceeds, instead applying the proceeds for his own use. Mr Justice Cohen described this behaviour as ‘reprehensible’.  

Mr Justice Cohen held that the judgment should not be published in full. The starting-point was that proceedings such as this were highly personal and should therefore be private. Whilst it was the case that Barclay had behaved badly, that behaviour was not sufficiently bad to warrant the publication of the entire judgment.

However, Mr Justice Cohen found that the public did have an interest in knowing about Barclay’s behaviour, and therefore he did set out details of that behaviour, in his judgment dealing with the issue of publication of the full judgment.

Lady Barclay was awarded lump sums totalling £100 million, payable in two instalments of £50 million. Barclay was also ordered to pay all of her legal costs, to the tune of some £1.8 million.

The moral of all of this is clear: you can ask the court to keep your financial affairs private, but do not expect full protection if you do not behave yourself in the proceedings!

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We have written here previously about the efforts of Tatiana Akhmedova to recover the divorce settlement she was awarded from her ex-husband Russian oligarch Farkhad Akhmedov – see, for example, this post.

To recap, in 2016 the High Court ordered Mr Akhmedov to pay to Ms Akhmedova the sum of £453 million, believed to be the biggest divorce award in this country. Since then, Ms Akhmedova has been attempting to enforce the award.

The latest round of this battle took place in the High Court in London in November and December last year, and the judgment of Mrs Justice Knowles has just been published.

Ms Akhmedova was alleging that Mr Akhmedov had done everything he could to put his money out of her reach, with the assistance of the parties’ son, Temur.

And Mrs Justice Knowles agreed. She said that Ms Akhmedova had “been the victim of a series of schemes designed to put every penny of the Husband’s wealth beyond her reach.” That strategy, she said, “was designed to render the Wife powerless by ensuring that, if she did not settle her claim for financial relief following their divorce on the Husband’s terms, there would be no assets left for her to enforce against.”

Temur had confirmed in his oral evidence that the Husband would rather have seen the money burnt than for her to receive a penny of it.

Temur, said Mrs Justice Knowles, learned well from his father’s past conduct and had done and said all he could to prevent his mother receiving a penny of the matrimonial assets. She found that he was “a dishonest individual who will do anything to assist his father, no doubt because he is utterly dependent on his father for financial support.”

Mrs Justice Knowles found that Mr Akhmedov had transferred money to various trusts, a company and Temur, with the intention of putting his assets beyond the reach of Ms Akhmedova. Accordingly, she ordered the trusts and company to make payment to Ms Akhmedova, and Temur was ordered to pay her some £75 million.

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It is sadly a feature of financial remedy disputes on divorce that couples expend disproportionate amounts of their assets on legal costs, arguing over who should have what. Sometimes, their legal costs even exceed the value of their assets, making the entire exercise somewhat futile.

Over the years family judges have often criticised couples for spending inordinate sums arguing over the division of their assets. We have written about this here previously, for example in this post in 2017.

And now another such case has been published. It is worth mentioning as a reminder of the folly of running up disproportionate legal costs.

And unlike so many of these cases, this one did not involve parties of great wealth. In fact, in the end they were arguing over negative assets.

The reason for this was that the parties’ assets were quite modest to begin with, and they ran up legal costs arguing over their division, greater than the value of those assets. The wife alone ran up legal costs in excess of £61,000. The end result was that their joint debts amounted to some £57,000.

And they did this despite the judge warning them at an earlier hearing that there was “a danger in this case that the cost of litigation and any final hearing will be disproportionately high relative to the asset base.”

The parties did, in fact, reach an agreement a few months before the final hearing, but they (in particular the wife) continued to argue over certain peripheral matters, with the result that the case dragged on to the final hearing.

In the end the judge made an order that was basically the same as what had been agreed previously. The husband therefore asked the judge to order the wife to pay his legal costs from the date of the agreement, amounting to some £29,000.

The judge found that both parties had been at fault in allowing the case to go to the final hearing, but also found that most of the fault lay with the wife. He therefore ordered the wife to pay £10,000 towards the husband’s costs.

All of the above led the judge to comment: “The level of costs in these proceedings has been ruinous to the parties. It is utterly disproportionate to the assets involved. To put the issue in context, the wife’s costs alone are just short of £4,000 in excess of the parties’ joint deficit.  Issues have been pursued which did not merit any significant expenditure of costs. Warnings as to the costs being incurred have gone ignored.”

The moral is quite clear: do everything you reasonably can to settle matters by agreement, always bear in mind the costs you are incurring, and always see the larger picture.

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The concept of ‘matrimonial property’ can be of great importance when considering the division of assets between husband and wife on divorce. But what exactly is ‘matrimonial property’, and how does this affect the division?

In simple terms, ‘matrimonial property’ is property that came into being in the course of the marriage, due to the joint efforts of the spouses. Accordingly, property owned by either spouse before the marriage is usually ‘non-matrimonial’, as is property acquired after the parties separated, or property acquired other than by the efforts of the spouses, such as gifts or inheritances.

The importance of the concept of matrimonial property comes from the basic idea that marriage is a joint venture, and therefore on divorce each spouse should be entitled to an equal share assets acquired during the marriage as a result of their joint efforts (whether those efforts involved actually acquiring the asset, or enabling the other party to do so, for example by looking after the home and bringing up the family).

But it should be noted that there is no absolute rule saying that on every divorce each party should get half of the matrimonial property, and keep any non-matrimonial property they own. The court has a discretion to divide ALL property as it sees fit, having regard to the circumstances of the case. Thus, for example, a party may be awarded more than half of the matrimonial property and, if the matrimonial property is insufficient to meet their financial needs, then they may even be awarded non-matrimonial property belonging to the other party.

The operation of the concept of matrimonial property was demonstrated by a recent Family Court case.

In the case there were assets totalling £54 million in value. These included a £5 million inheritance that the wife received, and £9 million in trusts established by the wife’s family.

On the face of it both the inheritance and the trust money was non-matrimonial, but the husband argued that because he had managed the trust money for some 16 years, that had the effect of ‘matrimonialising’ it. Accordingly, he said, he was entitled to a half share.

The judge did not agree. The trust money had not acquired a matrimonial character, either in whole or in part, as a result of the husband’s activities as investment manager.

The judge therefore held that only £40 million of the assets were matrimonial, and, there being no reason to depart from equality, each party was therefore awarded half of that sum.

The discussion of matrimonial property above is just a very brief introduction to what can be a complex subject. For more details, you should consult an expert family lawyer. We can find you an expert lawyer that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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A recent Family Court case acts as a warning to separating couples of the importance of finalising divorce financial agreements, and the perils of not doing so.

The case concerned a couple who separated in 2010. At that time they had various jointly owned assets, so in 2012 they agreed upon a division of the assets between themselves. Unfortunately, the agreement was never legally finalised.

In 2019 the wife commenced divorce proceedings, by which time the husband’s assets had risen in value considerably. This meant that the assets the wife received under the agreement represented only about 11 per cent of the total assets by the time of the divorce.

The wife issued a financial remedies application, seeking a significantly greater share of the assets. She was able to do so as the 2012 agreement had never been legally finalised, either by being put into a consent court order or, if there are no divorce proceedings, by being incorporated into a written separation agreement.

Both a court order and a separation deed really need to be prepared by lawyers, but the cost is relatively small, especially when compared to the cost of contested financial remedy proceedings.

The wife’s application was eventually dealt with by the court, and she was awarded a modest extra sum, although nothing like as much as she was seeking.

However, by the end of the final hearing the legal costs of both parties exceeded half a million pounds. This led the judge to comment “that an expenditure of perhaps a few thousands of pounds of legal costs in 2012 [on finalising the agreement] might well have saved and avoided the catastrophic expenditure of over £500,000 now.”

Obviously, separating couples should do all they reasonably can to resolve financial matters by agreement. However, they must then make sure that the agreement is legally finalised, so that there can be no come back later.

Family Law Café can find an expert family lawyer to help you both reach and finalise a financial agreement, working with you via our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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Family Law Café offers a modern, agile and compassionate approach to family law, giving you a helping hand when you need it and guiding you through the complexities of this difficult and stressful area. Family Law Cafe is your start-point for getting matters sorted with strategy, support and security.

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Last week the President of the Family Division Sir Andrew McFarlane announced that the new Financial Remedies Courts (’FRCs’) are now ‘live’ across all areas of England and Wales.

For the benefit of those who don’t know, the term ‘financial remedies’ refers to all family court proceedings relating to financial issues. These primarily consist of proceedings relating to the financial settlement on divorce, but also include other types of proceedings, including claims for financial provision for children.

Note that financial remedies does not include child support maintenance claims, which are dealt with by the Child Maintenance Service.

Until recently, financial remedy applications were all dealt with by the local family court. However, in 2016 it was suggested that a national network of specialist courts be set up to deal with financial remedy cases. A pilot scheme was then set up in 2018, to test the idea.

The pilot has now been successfully completed, and the President says that “the FRCs should henceforth be regarded as an established and permanent part of the Family Court.”

But what does this mean for anyone involved in a financial remedies case?

Well, the big thing is that word ‘specialist’. This means both that FRCs are particularly ‘geared’ to deal with financial remedy cases and, in particular, that the judges dealing with the cases will be specialists in financial remedy work.

This in turn should mean that financial remedy cases should in future be dealt with more efficiently, and with better, more consistent, outcomes. Such consistency should also make it easier for lawyers to advise clients, thereby making it more likely that cases can be settled without having to go to court.

Lastly, it should be noted that there are still two types of family-related financial cases that are not currently dealt with by FRCs. These are trusts of land cases (usually involving property claims following the breakdown of cohabitation) and Inheritance Act cases, where a claim is made against the estate of the deceased, often by a family member.

However, the President has expressed the hope that both of these types of case will, in due course, also be dealt with by FRCs.

Whatever type of financial remedy case you are involved in, you should seek expert legal advice. We can find you an expert lawyer that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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The biggest divorce news of the week is of course that Kim Kardashian has reportedly filed for divorce from Kanye West. This latest celebrity divorce has already filled huge numbers of column-inches in newspapers and magazines across the world.

Our fascination for celebrity divorce seems to know no bounds. But can we actually learn anything useful from them? Anything that may be of relevance to ‘ordinary’ people going through marriage breakdown?

Well, sometimes we can, especially when (to the obvious delight of newspaper editors) the divorce gets ‘nasty’. Hopefully, Ms Kardashian and Mr West’s divorce, if it goes ahead, will not fall into this bracket, but sadly many celebrity divorces do, just as do many divorces involving ‘ordinary’ people.

Watching the awful spectacle of a nasty celebrity divorce play out in front of the world’s media must surely act as a warning to all: don’t let this happen to me.

And you don’t have to let it happen. You are in control. There are many things that you can do to avoid an unpleasant divorce. We have given much of this advice here previously, but it merits regular repetition.

Put the animosity of the breakup behind you – Obviously, many marriage breakdowns involve considerable animosity, and a simple mistake that parties make is to carry that animosity over to the divorce proceedings.

This can take many forms, from making irrelevant allegations against the other party, to seeking unrealistic outcomes. All of which will, of course, simply add to the stress, cost and time that the case will take to resolve.

Obviously, it is easy to say that animosity should be left behind, but hard to do it. However, all parties should try.

Concentrate on what is important – The important things in a divorce case are firstly sorting out arrangements for any dependent children and secondly sorting out the financial settlement.

But all too often parties will get side-tracked by other matters, or by matters that they think are relevant to children or finances, but actually are not. And this is where our next point comes in:

Follow advice – Take the best legal advice you can, and follow it. Your lawyer will tell you what is important or relevant, and what is not, and will ensure that you concentrate on the issues that really matter.

We can find you an expert lawyer that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

Consider mediation – Lastly, remember that court proceedings are not the only way to resolve a family dispute. Try to resolve the matter by agreement, and if that is not possible, consider using mediation as a way of resolving matters.

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Family Law Cafe’s accessible team of legal experts from various disciplines expedites the customer’s case and keeps them informed and in control 24/7 through a unique and secure online portal. Family Law Cafe is your start-point for getting matters sorted with strategy, support and security.

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