Over the last 10 years London has developed a reputation of being the global capital for “divorce tourism”. This is partly due to there being a significant rise in the number of international divorce cases coming before the English Courts. Recently The Times reported that 1 in 6 cases handled by the Courts of England and Wales involves a foreign national or an international dimension of some sort.
A great deal of media attention has also been given to the substantial financial settlements which have been awarded to wives in recent years:-
- In 2006 insurance broker John Charman was ordered to pay £48m to his ex-wife.
- In 2008 Heather Mills secured a payment of £24.3m from Sir Paul McCartney.
- In 2011 Boris Berezowsky, the Russian oligarch is thought to have agreed a settlement to his former wife of approximately £220m.
- More recently Pauline Chai, a former Miss Malaysia is seeking a settlement of £500m in divorce proceedings she filed in London against her husband Khoo Kay Peng. Mr Peng has filed divorce proceedings in Malaysia and there is a pending jurisdiction dispute as to where the divorce and financial settlement will take place.
It is worth taking a closer look at what aspects of the jurisdiction of England and Wales make it attractive to the wives of wealthy international couples:-
- Judicial Discretion
One of the advantages of English divorce law is that we have a discretionary based system under which the Judge has considerable discretion when deciding how a couple’s finances should be distributed on divorce. There is no legal blue print or formula which determines the level of financial settlement when a marriage breaks down. It is fair to say that each financial award made by a Judge is “bespoke” and decided according to the individual facts and circumstances of each case. Unlike in continental countries there is no marital property regime which operates to determine property rights on relationship breakdown and this too means that flexibility is retained so as to ensure that the outcome is fair and meets the needs of the parties and any children.
- No Fixed Rules Regarding Spousal Maintenance
As above there are no rules as such to determine whether or how much maintenance should be paid or for how long. The English court may make a “joint lives” maintenance order if this is considered fair and appropriate having taken all relevant factors into account. By contrast, many countries have very prescribed rules regarding a spouse’s entitlement to maintenance which often stipulate a maximum duration for maintenance to be paid. In some jurisdictions the question of maintenance entitlement can also be affected by commission of adultery or other marital conduct whereas England operates a “no-fault” basis for divorce.
- The Requirement for Financial Disclosure
For many people the fact that both partners are required to make full disclosure of their assets is a definite advantage. In some countries such as Greece there is no provision for financial disclosure. In other countries such as Spain the onus is on the applicant to establish the financial position of their spouse.
- The Principle of Equality
Following the landmark decision in the case of White in 2000 the English Courts recognised that there should be no discrimination between the contributions of a homemaker and breadwinner in a marriage. This means that the starting point in all cases is an equal division of the matrimonial assets and also that spouses are entitled to share equally in what has been built up during the marriage. Subsequent case law has refined the above and given reasons for departure from equality sometimes being appropriate.
- Pre-Nuptial and Pre-Marital Agreements aer not Formally Binding
Pre-Nuptial and Pre-Marital Agreements do not have statutory force in England and Wales. While Pre-Nuptial Agreements are not formally recognised under British law, they are increasingly common and can in certain circumstances be binding or given decisive weight (following the 2010 Supreme Court decision in Radmacher v Granatino). In an international case a wife may, for example, have signed a Pre-Nuptial Agreement in a US state where the terms of the Pre-Nup might be readily upheld. It may be advantageous for her to bring divorce proceedings in England where the Pre-Nuptial Agreement would be looked at on a “case by case” basis in the context of all the surrounding circumstances before the court decided whether to give it any weight.
- Jurisdictional Requirements
It is not necessary for either of the spouses to be British born or domiciled in order to file divorce proceedings in England and Wales. Jurisdiction can instead be based on the residence of the Petitioner or the Respondent or even a substantial connection here. Often jurisdiction for divorce is easier to establish than might be thought.
- Alternative Dispute Resolution ("ADR") Options
The availability of well-developed ADR routes such as Mediation, Collaborative law and Arbitration is another attractive feature of England and Wales although, as detailed below, it is vital for urgent steps to be taken first to secure the best jurisdiction at the earliest stage possible.
For many international couples or couples who simply work abroad or have a holiday home abroad then there may well be more than one jurisdiction where divorce proceedings can be issued. In those cases it is vital to take urgent specialist advice from family lawyers in each potential jurisdiction as financial settlements can vary greatly according to the law of the relevant country. This will be a highly influential deciding factor for most spouses together with the location of the assets, their liquidity and the chances of being able to successfully enforce any order obtained. Great care needs to be taken when choosing a jurisdiction and it is vital that advice on jurisdictional issues is taken swiftly otherwise the opportunity to secure jurisdiction in the “best” country may be lost. Under European legislation, the jurisdiction for a divorce takes place on a “ first past the post” basis whereby the Court in which the proceedings are first issued will deal with the proceedings. Another important consideration is the impact of the European Maintenance Regulation which harmonises the basis of jurisdiction for child and spousal maintenance in Europe.
In this era of global mobility international family disputes are increasing and it seems likely London will remain the destination of choice for many “divorce tourists”.