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Divorce law blog

Location, location, location

06/10/2014   By: Nicola Rowlings

There can be no denying that, since 2000 (and particularly over the past decade), London has developed a reputation for being the so-called “divorce capital of the world”  - a mecca for divorce tourists if you like.  In 2012, The Times reported that 1 in 6 divorce cases in London involved a foreign national, half of the “big money” divorces involved people from abroad and that there had been a significant increase in international couples seeking pre-nuptial agreements to protect their wealth in the event of a divorce. 

And, as if it prove that point, the case of Pauline Chai and Khoo Kay Peng, and the vexed question of whether they should be able to divorce in England or not, is currently being decided by the High Court in London.  Ms Chai, a former Miss Malaysia, and her husband are a very wealthy couple – reportedly, they have a combined wealth of £400million.  They agree that their marriage is over; however, they can’t agree on where they should divorce – Mr Peng says it should be Malaysia, Ms Chai says it should be London.  Why is location important? Because the financial settlement Ms Chai would receive on divorce in Malaysia would be far less than that she would potentially receive in London. Indeed, in London, she is possibly looking at being awarded half of the family’s assets which is no doubt the reason why the couple have spent £2.5million to date on legal costs on fighting over where the divorce should take place. 

There are many international families like the Chai-Pengs who will find that more than one country may be able to deal with the issues arising on divorce. The time and legal costs involved in getting divorced differ greatly from country to country. Different countries approach the financial arrangements between couples on divorce in very different ways. This means that a couple with the same financial resources could end up with very different financial arrangements if their divorce is dealt with in England than if it were dealt with, for example, in France or one of the US states. It really is all about location, location, location.  For wives in particular, England and Wales is an attractive jurisdiction to get divorced in and obtain a financial settlement:

  • You do not need to be British-born or even domiciled in England and Wales to bring divorce proceedings in this country. 
  • Many countries use a formula to pre-determine a financial settlement on divorce.  Instead, the English courts use a discretionary based system for deciding how a couple’s finances should be divided.  This means there is a wide discretion to make a financial award that is bespoke and fair to the individual facts and circumstances of each case. The landmark decision of White v White in 2000 (which set down that there should be no discrimination between the contributions of a homemaker and a breadwinner in a marriage) means that the starting point in all cases is a 50:50 division of the family’s assets.  For wives, this is particularly advantageous.
  • We have no rules to pre-determine how much or for how long spousal maintenance should be paid. So, when the court decides that one spouse needs to pay maintenance to the other, one option is for the maintenance to continue until the payer dies or the payee re-marries.  Many countries have strict rules over spousal maintenance, including restricting payment to a limited period only.
  • Both spouses have to disclose their finances to each other and the court.  Surprisingly, some countries do not require financial disclosure!
  • Currently, nuptial or marital agreements are not formally binding in our courts.  Whilst they will be taken into account as one of the circumstances of the case, our courts, unlike many countries, are not bound to uphold the terms of a nuptial agreement.  Instead, the court will look at the terms of the agreement to see if it is fair.  If it is, the agreement may be upheld but it is by no means a foregone conclusion. For those looking to depart from the terms of an agreement, London is a good place to get divorced.

If you have a particular country in mind to deal with your divorce, or you know that a particular country will offer you a better outcome on divorce, speed will be critical to ensure that you secure that jurisdiction.  This is especially important if another EU country is involved because EU member states work on a “first to file” system. So, if you are looking to divorce your ex in France rather than their preferred choice of England, you need to make sure you file your French divorce petition and application for financial settlement first and ahead of their English divorce petition. The French court would then check that it has jurisdiction to hear the case; if it has, the divorce and financial settlement would proceed there and not England. In some cases, this “first to file” system has come down to one spouse being only minutes ahead of their ex in filing their paperwork!  Divorces with an international element are particularly complicated and it is essential that, if you find yourself in this position, you take specialist legal advice as early as possible.

To read more about international family law, see our section on international divorce.

Nicola Rowlings

Professional Support Lawyer

for Mills & Reeve LLP

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