London remains the divorce capital of the world

By David Hodgson, partner and joint head of the family and divorce team at the London law firm Bishop & Sewell

London has over many years earned the reputation as the ‘divorce capital of the world’ for its often-generous settlements, particularly in respect of maintenance. Brexit and a spate of recent cases that have seen a hardening of maintenance awards have not yet damaged that reputation.

Where you get divorced matters, particularly for wealthy individuals with global footprints. Courts around the world will take a very different and generally a less generous view towards maintenance grants to the financially weaker party, often resulting in a ‘race’ to file for divorce in the most financially advantageous jurisdiction – known as forum shopping.

London has historically been very generous to the financially weaker party, almost always the wife. Conversely, the courts in other countries have less discretion and may grant maintenance settlements for limited time periods expecting parties to quickly become financially independent. It has led to London courts delivering some of the largest divorce settlements on record. The pull of London as the divorce capital of the world remains strong.

Court decisions have, however, begun to turn. Maintenance awards, whilst still generous, are hardening with judges expecting a degree of financial independence from their former spouse, suggesting that when children fledge the family home, and even before, a wife may wish to explore or pick up on an earlier career. The courts recognise that it is often unfair to require a former partner to provide maintenance payments for life and into retirement.

London calling

London will not be an option for everyone and, even when it is, it may not be the most appropriate jurisdiction to initiate a divorce if there is an alternative.

For an individual wishing to file for divorce in London, they must be able to demonstrate a connection to the UK. That may be habitual residence of one or both parties or domicile.

However, just because you may be eligible to secure London as your preferred jurisdiction that does mean it might deliver the best outcome. If assets are held overseas, the ability to enforce any divorce settlement needs to be considered. It can be costly and time-consuming, not to say inconvenient, to enforce a UK divorce settlement through an overseas court.

Brexit complication

Brexit has created an additional layer of complexity. EU legislation, called Brussels II, meant that a critical factor for an EU national who wished and could seize a particular jurisdiction in the EU was to file for a divorce there first. By filing first, jurisdiction in that EU State was secured even if a person attempted to file for divorce in another EU state. Whilst England and Wales are no longer bound by those rules, other EU States are. Other countries also adopt a similar ‘first in time’ principle.

If jurisdiction can be established and there are two competing jurisdictions, the English courts will no longer give automatic precedence to which jurisdiction was first seized. The court will consider other factors applying the ‘centre of interest’ test. This will look, for example, at what connections the parties have to the competing jurisdictions, where assets are held and where individuals spend their time.

As courts in different states operate different rules in deciding which competing jurisdictions have precedence, this can lead to an anomaly in that there are 2 sets of proceedings continuing in 2 different jurisdictions, dealing with the same issues which could then lead to 2 different outcomes. The obvious problem is then which outcome should be followed, as each jurisdiction will say the one that they have ordered. To prevent this from happening, the English courts can look to halt overseas divorce proceedings via an injunction. This will direct an individual, not a State, to halt the proceedings. Therefore, a State could decide to continue with the proceedings nonetheless, which would not elevate the problem.

The UK courts will however go to significant lengths to avoid this conflict, preferring to work collaboratively with other jurisdictions to find a resolution for both parties. The chances of this anomaly occurring is significantly less when involving States with which England has good diplomatic relations.

Individuals with an international footprint looking to separate from their partner are urged to seek legal advice before starting proceedings. If there is a choice of jurisdiction, it is important that the best one for that individual is seized as the consequences of not doing so can be far reaching.