What is the cost of cohabitation? For Dale Vince, it was over £11m.

In this recent “big money” divorce case heard in the High Court in December 2024, Mr Justice Cusworth ruled on the division of financial assets between the renowned green entrepreneur, Dale Vince, and his (now-ex) wife Kate Vince.

The central issue in dispute was the treatment of Mr Vince’s business assets, valued by the Single Joint Expert at £153.3m (pre-tax). The parties had managed to agree between themselves how their other assets (c£13m of assets and c£5.6m of liabilities) would be dealt with. 

Whilst the judge dealt with a number of issues relating to the business (including whether or not to ‘add back’ to the value of the business a number of charitable and political donations it had made at Mr Vince’s direction), the main issue was how to assess the wife’s ‘sharing’ claim over the business. 

The chronology of this case was important and the key dates (as determined by the judge, in some instances) are set out below:

• The husband’s business had its genesis in April 1995; 
• The parties:
  •  Began cohabiting in February 2000; 
  • Married in February 2006;
  • Separated in February 2022; 
• The trial took place in December 2024 (which is the point at which the business was valued)

It was accepted that the wife was entitled to ‘share’ in the husband’s business, but the extent to which she should do so was not agreed in circumstances where the husband had begun building the business before cohabitation/marriage and continued to do so after separation. 

The wife’s case was that she should be entitled to share in the full value (i.e. receive 50% of the overall value). She said this was justified by the length of the marriage relative to the periods before/afterwards and the fact the business was shown to have had little value when the relationship started in c2000. The husband’s case was that his efforts in building the business before the marriage created latent value and that his efforts after separation were significant and that this justified a discount of 50% in the first instance (i.e. meaning the wife should share in just 50% of the value, so effectively 25% of the overall value).

Both arguments carry some justification in case law, but on the facts of this particular case the judge found that neither would be appropriate nor fair. The judge instead considered it would be fair in this case to pro-rate the value of the business on a ‘straight line’ basis, as against the value of the business at trial. Of the 356 month ‘life’ of the business, 264 months fell during the marriage, and so the Court held that 74.16% (264/356) would be subject to sharing equally.  

As it happens, that equates to a c25% discount leaving c 75 % of the value of the business to be shared equally – i.e. c 37.5 % of the value of the business, so in the middle of the parties’ positions. One might wonder, therefore, why both parties appear to have claimed a resounding victory in the media when on this central point the judge effectively said they were both wrong and adopted a position broadly between the competing positions. 

More importantly, for present purposes, the judge included the 6 years of cohabitation as part of the marriage (i.e. 22 years in total).  That is not unusual – it is a long-established principle that cohabitation leading seamlessly into marriage is treated as part of the marriage when considering financial claims on divorce. 

However, what is unusual in this case is that the financial impact of doing so is so clearly quantifiable. As the judge found that the wife should share in the value of the business with direct reference to the length of the marriage (including cohabitation), the ‘cost’ of this cohabitation can be calculated. 

Once the business value was adjusted to factor in costs of sale/extraction and tax, the wife was awarded a lump sum of £41.81m, or £1.9m for every year of the ‘marriage’. That means that the 6-year period of cohabitation effectively cost Mr Vince £11.4m. 

Whilst there are sound reasons for the courts to treat a period of seamless cohabitation as part of the marriage, it is not commonly known to the public. This case serves as a stark example of the consequences of this principle. The effect of the marriage was retrospectively to create an effective financial claim over the period prior to the marriage. This highlights the importance of taking early legal advice in advance of cohabitation and marriage and in particular considering a pre-nuptial agreement.