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GUEST ARTICLE: Brexit Won't Dent London's Status As World's "Divorce Capital"

Dickon Ceadel, Wedlake Bell , Solicitor , 22 July 2016

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Will London's status as a favoured place for international couples to get divorced change because the UK has voted to leave the European Union? The author of this article does not think so.

Controlling immigration, regaining sovereignty, protesting against the status quo and thinly veiled political opportunism. There are a plethora of reasons (of varying degrees of intellectual coherency) why the British public and many of their elected representatives campaigned and voted to leave the European Union. However, few would have considered the impact that "Brexit" could have on family law in this jurisdiction. But London has a reputation, not always seen positively, as the “divorce capital of the world” due to the relatively liberal legal system of England and Wales. Deserved reputation or not, this could be affected by Brexit. In this article, Dickon Ceadel, solicitor in the family team at law firm Wedlake Bell, examines the situation and argues that the status is unlikely to disappear any time soon.

Britain is currently subject to a number of important EU regulations which govern the practice of family law across Europe. These regulations deal with jurisdiction for divorce and disputes relating to children, child abduction and the reciprocal recognition and enforcement of both financial and child related orders (which deal with “custody” and “residence”).

It is the potential loss, as a result of Brexit of “Article 3(1) of Brussels II bis”, which sets out the rules for which court has jurisdiction to hear divorce proceedings, that some have argued threatens London's “divorce capital” status most acutely. The criteria are rooted in where an individual and/or their partner ordinarily lives (habitual residence) and/or their or their partner's domicile (where they intend to make their permanent home).

As such, often, for international couples, there is more than one option as to where they could respectively petition for divorce. In such circumstances the “first in time” rule applies. This means that the person who establishes jurisdiction in their chosen court first “wins the race”. This frequently leads to situations in which lawyers (often literally) run to court to petition in the jurisdiction in which they believe their client will get the best result, rather than where it would arguably make most practical sense to take place. 

For the financially weaker spouse (more often than not, the wife), England is often where they will get the best deal. The English Court's unparalleled generosity towards them vis-à-vis courts in Europe and around the world is the main reason why so many "big money" divorces are being played out here. Our law's unique interpretation of fairness considers “breadwinning” and “homemaking” to be of equal importance. Consequently a judge's starting point when exercising their broad discretionary powers is that capital which is built up during the course of a long marriage should be divided equally, even if one party has "earned" all of it. Moreover, English courts often order that ongoing maintenance is paid, sometimes on a joint lives basis (i.e. until one of the parties dies or the recipient remarries), something which is rare or unheard of in many other jurisdictions. 

Crucially these principles are rooted in domestic statute and case law and will therefore be unaffected by Brexit. London has, therefore, and will continue to be, a unique draw for the financially weaker party in a divorce, and under the "first in time" rule, it is relatively easy for those who are EU citizens, and meet the criteria, to seize jurisdiction in London. 

The result of the prolonged negotiation process regarding the nature and extent of our ongoing relationship with the EU is inherently uncertain. However, as the Law Society concluded in its report on the potential impact of Brexit, it seems likely that the government will seek to negotiate “a series of bilateral agreements with other countries, which would mirror the existing provisions in current EU legislation”. 

It is therefore unclear whether the present jurisdictional rules, or indeed any of the other important EU family law regulations, will survive Brexit. Though the uncertainty will be a cause of concern for clients, our legislature will be presented with a unique opportunity to reconsider the merits of these rules and also, potentially, to make bilateral agreements with non-EU member states: something which we cannot do while we are in the EU. 

If the “first in time” rule does not survive, then our courts are likely to return to applying the common law doctrine of forum conveniens, as they do in circumstances in which there is a jurisdictional dispute with non-EU countries. This entails a consideration as to which is, practically speaking, the most appropriate court to deal with the divorce based on the parties' connection with the competing jurisdictions.

It is trite to reference the number of high net worth individuals who choose to make London their home, because of our rule of law, relative political stability, real estate growth rates, diverse multi-cultural society, and world class educational institutions inter alia. The "first in time" rule has conversely, at times, allowed the financially stronger spouse to establish jurisdiction in a state more favourable to them, even if it would make more practical sense for the divorce to take place here. Therefore, on a forum conveniens assessment, London may be the most appropriate forum. Though the application of this doctrine would likely lead to more litigation and uncertainty, for the financially weaker party in big money divorces, establishing jurisdiction in London could be a prize worth fighting for. London's divorce capital status is here to stay.

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