Client Affairs

Prominent Businessman Faces Possible Jail Over Divorce Payments – Reactions

Amanda Cheesley Deputy Editor London 1 August 2022

Prominent Businessman Faces Possible Jail Over Divorce Payments – Reactions

Wealth managers react after Sir Frederick Barclay was handed a suspended sentence this week for not paying his ex-wife’s maintenance and legal fees.

Sir Frederick Barclay, the businessman, could face a jail sentence after a High Court judge accused him of being in contempt of court for not paying his ex-wife £245,000 ($296, 000) in legal fees and monthly maintenance costs.

Lady Barclay, his wife of 34 years, said the 87-year-old had breached a judge’s order to pay her the money. He was able to pay it but did not, and she urged the judge to give him a jail sentence.

But the criminal standard of proof was not established for Barclays’ failure to pay his ex-wife the £100 million divorce settlement.

The tycoon was told to return to court in two weeks for sentencing when he could be jailed or fined.

Here are some reactions from wealth managers:

Emily Brand, partner at private wealth law firm Boodle Hatfield
“Sir Frederick should be under no illusion that failing to comply with the court order could lead to a prison sentence unless he pays his former wife the £245,000. It is relatively common for people to be imprisoned for contempt of court.”

“We are seeing more cases where estranged spouses are hiding assets with third parties and offshore holdings in order to deprive their former partners of a fair divorce settlement. These sometimes opaque financial arrangements prevent the court from having a clear picture of all the assets held, making it much harder to conclude a just settlement.”

“Where assets, such as businesses, are held by third parties it can be particularly difficult to enforce an order.” 

“Assets held in jurisdictions outside of the UK are much harder to pursue in divorce settlements, as the courts in the foreign jurisdiction may refuse to enforce the English order.”

“A freezing injunction can be used to prevent a spouse from moving assets overseas before a financial settlement has been determined or agreed. This may be the only option if there is a risk that assets will be moved and as a result the value of the "matrimonial pot" will diminish to the potential detriment of the financially weaker spouse." 

Susi Gillespie, partner and head of family team, mediator and collaborative lawyer, Thomas Mansfield Solicitors
“Thursday’s High Court judgment against British business tycoon Frederick Barclay demonstrates the clear and unambiguous enforceability of family law orders. If you fail to abide by the orders made against you, you may find yourself in contempt of court and criminal proceedings may ensue – regardless of the extent of your wealth. The tycoon has been ordered to pay £245,000 to his ex-wife by 11 August failing which he could be jailed for contempt of court for up to six weeks.”

“You are in breach of an order for payment of money if you have the means to pay but do not do so. The tycoon has argued that he cannot access his wealth which is tied up on various complex trust structures operated by his nephews. His case is that due to a family feud his nephews will not pay him the funds he requires to meet his obligations under the court order yet, startlingly, they are meeting his legal fees of around £1 million.”

“The court’s approach to the tycoon’s argument that he cannot access his funds in the trust was not accepted because the trust had “never refused to provide the tycoon with funds when he needed them.” The court went on to say that the sums he owed his wife for legal fees and maintenance were ‘relatively modest’ considering the funds available to him under the trust.”

“The legal approach is that the family court can look past trust structures and consider what really occurs when a beneficiary receives funds. If the trust always provides the funds upon request, then the trust can be considered a source upon which the beneficiary can rely. Orders can thus be made which require the beneficiary to draw on the trust.”

“Specialist legal advice is essential when divorce proceedings are likely to involve trust structures.”

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