The UK Courts are known for granting large settlement pay-outs in divorce cases. So it may come as no surprise that former model, Ms Christina Estrara has made history as she was awarded £75 million in a divorce settlement from her former billionaire husband Walid Juffali of 12 years. This is the largest ‘needs’ based settlement granted in the history of English Courts, greater than the previous largest recorded settlement between Sir Paul McCartney and Heather Mills.
What is ‘Needs’?
‘Needs’ is a concept used in financial remedy cases on divorce to establish how finances are dealt with post divorce. It means exploring what a family needs to continue a standard of living. It includes looking at how they lived in terms of day to day expenses, holidays, luxuries, cars and properties. Once that is done, they can look at how these could possibly be met. That could be by spousal or child maintenance, capitalised maintenance or a lump sum are just some of the options at the Court or a family’s disposal to meet those needs. With more high value cases, needs can be generously assessed if there is more money to go round.
Factors taken into account to assess Needs
When assessing needs for a financial order the Court would have regard to all circumstances of the case and factors to be taken into account are set out in section 25 of the Matrimonial Causes Act 1973. This would include factors such as: the welfare and needs of the child/ children; income and earning capacity of each party; financial needs and obligations; age of each party; contribution of each party; and standard of living.
It appears in this particular case the standard of living was a key issue in the Court’s discretion. It has been reported that Ms Estrada described her years of marriage and their lifestyle as ‘magical’. Wealth was measured differently in this case it being described as, extreme wealth and extreme luxury they had all they wanted. The Court therefore assessed the needs based on continuing this luxury for the foreseeable future for Ms Estrada and her 13 year old child.
Ms Estrada’s needs consisted of a long schedule, a case surely falling into the realm of the ‘gasp’ territory for most. Her needs consisted of things such as annual payments of £600,00 for private jets, £83,000 for cocktail dresses, £40,000 for fur coats, anything but this and she would suffer a reduction in her standard of living. Ms Estrada’s total request amounted to an annual figure of £6.5 million but the Court assessed them at £2.5 million.
Ms Estrada grew up in a middle class family and had a successful modelling career as admitted by Ms Estrada; she has enough of her own wealth and assets, however this was not sufficient to continue with the magical bubble. Mr Juffali offered £37million to settle the matter outside of Court but she refused. Mr Juffali has now been ordered to pay her double of what he offered. On balance, when weighing up Ms Estrada’s wealth against Mr Juffali’s, there was clearly a huge disparity. Mr Juffali is a billionaire and there was nothing that he could not financially provide. Taking into account his age and the fact that he has other children and a wife who he financially supports, it was clear that even still he could carry on living his life of luxury after paying Ms Estrada. The Court therefore focused its approach on generously assessing needs. Ms Estrada had in fact asked for £196 million to meet her needs, however she was awarded £75 million.
On of the primary objectives of the Court with any financial separation is to ensure that the parties, and children’s needs are met, and that they are given a chance to ensure independent living, post separation, which is as similar as possible to the parties’ standard of living during the marriage. This becomes even more prominent when it involves a child/ children and the welfare of those children/ child.
This family’s circumstances enabled the Court to generously assess the family’s needs, which could be met without a substantial impact on the family’s total capital assets. Unfortunately this is a luxury which does not apply to many married couples going through separation. For many such families their standard of living and ‘needs’ will be scrutinised in far more detail as it may be far more difficult to stretch the family’s financial resources to meet their income and capital needs.
Unlike Ms Estrada and Mr Juffali, this will often lead to a far more pronounced reduction in the standard of living of everyone involved. The tight margins with many families finances only emphasise the importance of trying to work towards an amicable settlement, be that through negotiation, collaboration or mediation where possible.
Thomas Brownrigg – Solicitor and Mediator
Saleha Bibi – Paralegal