For high-net-worth (HNW) couples, the country in which a divorce petition is filed matters. One reason so many international divorce cases are heard in London is that courts in England and Wales are well-known for ordering generous settlements that benefit the financially weaker party in HNW divorces.

Filing Your Petition In England And Wales

There are several reasons why London is known as the “Divorce Capital of the World” and why many will look at “forum shopping” (i.e. to get divorced in the most advantageous country), including:

Unlike most jurisdictions, the presiding judge ultimately decides how the finances will be divided in a divorce. Although they must consider the provisions set out in section 25 of the Matrimonial Causes Act

1973, the judiciary, who generally assume that the financially weaker party must be protected, has the ultimate say in a Financial Order;

Although the starting point in a divorce financial settlement is that both spouses are granted an equal share of the matrimonial assets, a judge can (and usually does) adjust this as they think fit. For example,

lifetime spousal maintenance may be awarded if it is deemed necessary to do so. Furthermore, English law takes a wider view of what constitutes marital property compared with other jurisdictions.

In the landmark decision in White v White [2000] UKHL 54, Lord Nichols declared that achieving fairness in a financial settlement meant that “there should be no bias in favour of the money-earner and

against the home-maker and child-carer”. This means that when an English court assesses the contributions of each party to the marriage, a spouse who gave up their career to look after the home and any children is seen to have contributed as equally as the spouse who earned the income.

For many HNW couples, the first legal matter to be decided is what jurisdiction should the divorce be heard in.

Can I have my divorce proceedings dealt with in England and Wales?

To have the legal right to petition for divorce in England and Wales either you or your spouse must have sufficient connection to either country. However, this does not mean that one or both of you have to live here permanently.

If you are filing for divorce after the end of the Brexit transition period (11pm on 31 December 2020) you may be able to petition in England and Wales if:

You and your spouse are habitually resident in England and Wales.

You and your spouse were both last habitually resident in England and Wales and one of you continues to reside there.

The Respondent is habitually resident in England and Wales.

The Applicant is habitually resident in England and Wales and has resided there for at least one year immediately before the application was made.

The Applicant is domiciled and habitually resident in England and Wales and has resided there for at least six months immediately before the application was made.

You and your spouse are domiciled in England and Wales. You or your spouse is domiciled in England and Wales.

What is the difference between domicile and habitual residence?

If you are a habitual resident of a country, then your daily life happens there. It is the place where your children go to school, your work happens, your pets live, and where you spend time with your friends and participate in your hobbies.

Your place of domicile is where your permanent home is. You automatically acquire domicile in your country of birth. However, you can change your domicile if you move and set up home permanently in another country.

The 2019 case of Pierburg v Pierburg[1] examined whether or not an English court had jurisdiction to deal with the wife’s divorce petition. Both spouses were German nationals and had been married for 30 years. Mrs Pierburg had signed a Prenuptial Agreement, agreeing not to make any claims on her husband’s assets or apply for spousal maintenance. It was imperative for Mrs Pierburg that she could file for divorce in England, as a German court would be likely to uphold the terms of the Prenuptial Agreement. An English court had the power to set aside the Prenuptial Agreement (which are not strictly legally binding under English law[2]) and award her a substantial settlement if it would not be fair to uphold the pre-nuptial agreement.

Since the 2000s, the couple had lived in Switzerland. They also maintained a house in London. When she separated from her husband in 2019, Mrs Pierburg moved into the London property. After six months, she filed for divorce in England arguing that she was domiciled in the UK.

Mr Pierburg filed for divorce in Germany, claiming his wife had never indicated she wanted to live permanently in London.

The Court agreed with Mr Pierburg, following Munro v Munro [3] where it was held that, in order to establish habitual residence, a spouse had to be “habitually resident”, and not merely “resident” in the jurisdiction for the six or 12 months required, not just habitually resident at the date of the petition and merely resident for the rest of the time. Before 2017, Mrs Pierburg had no links to the UK aside from the property. She may have visited London regularly but was not a habitual resident. Furthermore, her emotional and physical ties lay in Germany, not the UK; therefore, she was not domiciled in the latter country.

Jurisdictional disputes often arise when one spouse wishes to file for divorce in England and Wales and the other party starts litigation proceedings in another jurisdiction and it is imperative you get it right. In this situation, your Divorce Solicitor may apply for a Hemain Injunction.

What is a Hemain Injunction?

A Hemain Injunction derives from the Court of Appeal case of Hemain v Hemain[4]. It is a temporary interlocutory injunction[5] that prevents a party from pursuing litigation in another country. It is a powerful tool that can be used where one party to the divorce is delaying matters by contesting the jurisdiction of the English Court whist at the same time pursuing litigation in a

nother jurisdiction. To be granted a Hemain Injunction, you will need to prove that your spouse acted vexatiously, oppressively, or unconscionably in deliberately delaying litigation in England and Wales and advancing proceedings overseas in order to gain a forensic advantage.

Final words

HNW couples planning to divorce must consider jurisdiction if there appear to be several available. Investing in a Divorce Lawyer who has experience in international family law and HNW financial settlements will provide the best chance of securing the most advantageous jurisdiction for what you want to achieve when it comes to dividing your marital wealth.

Edwards Family Law is a niche London-based firm specialising in high-net-worth divorce and international family law. To find out more about filing your divorce petition in England and Wales, please get in touch by phone +44 (0)20 3 983 1818 or email contact@edwardsfamilylaw.co.uk. All enquiries are treated in the strictest confidence.

Every January, the press take great pleasure in writing about Divorce Day i.e. the most popular day for divorce petitions to be filed with the court. 2020 has provided even greater fodder for publications that wish to sound the death knell for relationships and one could argue that 2020 was in fact ‘Divorce Year’. The retailer Poundland clearly seems to think so given that they are launching their first ‘divorce celebration’ range to help the newly single toast their separation.

Whilst it may be easy to joke about your partner driving you up the wall whilst you try to juggle work, home schooling and all the rest, it is not a laughing matter. Domestic violence rates have surged during lockdown and people’s mental health has been impacted significantly. Whilst this January, the column inches have been dominated by the imposition of a new national lockdown and the roll out of the vaccine, there are still a smattering of articles on this subject peppered among the various other COVID and Brexit headlines featuring on the daily doomscroll.

The vast majority of relationships will have been tested in one way or another since March and you may feel that you need to do something about this without taking the plunge or acting rashly.

There will of course be cases where there is little that can be done to save a relationship, particularly where there is a history of domestic abuse (and in these circumstances you should seek immediate advice and assistance, from the police if necessary). However, if you are looking for a way to salvage your relationship or get some reassurance then there are a number of things that you can do.

Marriage counselling and therapy

Divorce lawyers can get a bad reputation as the architects and enablers of misery (again, thanks to the press) but the vast majority of us want to help our clients in any way that we can. If that means helping to facilitate a reconciliation then that is what we will do. At Edwards Family Law our number one priority is the happiness and wellbeing of our clients. We have connections with a number of counsellors and therapists that we can refer you to. It may be that your mental health is suffering and you need a way to explore these issues privately or you may wish to attend counselling as a couple to bottom out your issues. Even if this is not successful, sometimes knowing that you have explored all of the avenues to keep your marriage afloat can be comforting if divorce turns out to be inevitable.

Initial advice

Taking legal advice does not need to lead to separation or divorce, but arming yourself with the information so that you can prepare yourself for this eventuality can be empowering, whatever way you decide to go, knowledge is power after all. Click the following links for a brief overview of divorce, financial proceedings and children proceedings or get in touch for a no obligation, initial call today.

Mediation

Mediation is becoming increasingly popular and being informed of it is an option is a prerequisite to issuing financial proceedings or children proceedings (subject to some limited exceptions). A mediator will act as a neutral third party to guide discussions between you and your spouse and it may well be that this forum helps you face the issues before you and come to a solution without needing to separate. If not, it is a cost effective and amicable way of attempting to reach a settlement. We know a number of excellent mediators that we can refer you to. Get in touch today for a free discussion about this.

Post-nuptial agreement

A pre-nuptial agreement is entered into in anticipation of a marriage and sets out the financial arrangements upon divorce in a bid to protect assets and limit future litigation. Whilst a staple in many European countries for some time, they have only started to increase in popularity in England and Wales since the seminal 2010 case of Radmacher v Granatino. In this case, the Supreme Court confirmed that pre-nuptial agreements held substantial weight if a number of criteria were met. Saying this, a number of couples who may now be facing separation will not have a pre-nuptial agreement because it was not en vogue at the time of their marriage. There is a solution to this in the form of a post-nuptial agreement. The clue is in the name, the agreement is entered into after the parties are married and again, sets out the financial arrangements in the event of divorce. This can be particularly useful if you are in the dark about the matrimonial finances but do not wish to divorce. Sometimes, getting a clear picture and a guarantee of security in the event of divorce can help to save a marriage if financial worries are putting pressure on the relationship.

The process will involve disclosure and each party receiving independent legal advice. Obviously, this will require the cooperation of both parties which will not necessarily be forthcoming if one partner wishes to keep the other out of the financial picture but it can be an effective tool in the right circumstances. Get in touch today for some initial advice or read our summary of pre-nups & post-nups here.

Financial consent orders

Many couples manage to reach an agreement regarding the division of their assets between themselves, particularly where their finances are relatively straightforward. This of course has the benefit of dealing with matters swiftly and avoids the court process and associated legal fees.

However, parties should always ensure that any agreement is recorded in a consent order and sealed by the court. Without taking this step, the agreement can be rendered meaningless and leaves the parties exposed in a number of ways.

If you think you might need a consent order, and want to discuss this, get in touch today or call 0203 983 1818.

What is a consent order?

A consent order is a document that sets out the financial arrangements agreed between parties upon divorce. Such an order will deal with the division of all of the assets and liabilities, including property, pensions and personal possessions. Where appropriate, it will set out the level and duration of any child and spousal maintenance as well as provision for other expenses such as school fees, medical insurance and life insurance.

In the event of a clean break (where all financial ties are severed), a consent order sets out the division of property and includes clauses that bring the financial relationship to an end. When it is necessary for the parties to have an ongoing financial relationship (for example, due to the need for spousal maintenance to be paid), the order sets out the mechanism for this going forward as well as the date or event upon which this financial relationship will conclude.

Why should I obtain a consent order?

There are two main issues that can arise without a sealed consent order.

Firstly, either party is open to pursue further financial claims later down the line. This was demonstrated by the Supreme Court’s 2015 decision in Vince v Wyatt:-

The parties married in 1981 and were of modest means during the course of their relationship. They had one child together and Ms Wyatt’s daughter from a previous relationship was treated as a child of the family. The parties separated in 1984 and eventually divorced in 1992. During this 8 year period, Ms Wyatt had limited financial assistance from Mr Vince. Whilst the court was unable to obtain records dating back this far, it had no reason to believe that Ms Wyatt’s claims against Mr Vince had been dismissed (as they would be within any consent order providing for a clean break). Mr Vince went on to develop a very successful green energy business during the 1990s and subsequently became a multi millionaire. Ms Wyatt brought a claim for financial relief in 2011 and after many hearings and appeals, the Supreme Court determined that her claim could proceed. Ms Wyatt was eventually awarded a lump sum of £300,000 plus a total of £325,000 towards her legal costs.

It is worth noting that in addition to these sums, Mr Vince will have borne his own legal costs as well as the the stress of five years of litigation against someone he had divorced over 20 years prior. Therefore, failing to obtain a consent order can lead to litigation many years, or even decades, after parties have divorced.

The above illustrates that even if parties are of limited means at the time of divorce or if an order is very simple and merely involves them retaining their own assets, it is still important that an order is obtained to incorporate the necessary clauses that prevent further claims from being brought.

Secondly, if one party seeks to renege on the agreement, there is little redress open to the other party by way of enforcement. For example, if a party stops paying spousal maintenance and there is no order to back up this arrangement then options are limited. Parties can effectively find themselves back to square one, needing to issue financial remedy proceedings to obtain an order setting out their respective obligations, taking both time and money.

As such, it is best to get matters finalised at the earliest opportunity to avoid, or at least limit, the possibility of future litigation.

How do I obtain a consent order?

Once an agreement is reached, this will need to be drawn up into an order by a specialist family law solicitor. It is highly recommended that both parties obtain independent legal advice on the content of the order. Once signed by both parties and their legal advisors, the order can be submitted to the court, along with a short disclosure statement in form D81. This includes details of both parties assets, liabilities and income, but does not require documentary evidence in support as would be the case within financial remedy proceedings.

Once submitted to the court, a judge will consider this snapshot of the parties’ financial position alongside the agreement reached, and assuming that they deem it to be fair, the order will be sealed. However, there is no guarantee that the court will deem an agreement fair simply because both parties consent to it. Above all, the agreement must meet the needs of the parties, with priority given to the needs of any minor children of the family. This reinforces the importance of obtaining legal advice on the order before it is submitted to the court as a solicitor will be able to advise whether the agreement is within the parameters of what a judge will consider to be fair.

If you think you might need a consent order, and want to discuss this, get in touch today.

No turning back…

Once a consent order has been sealed it is final and will become legally binding and enforceable upon the grant of decree absolute (see below). The importance of a properly drafted consent order coupled with independent legal advice therefore cannot be overstated. Parties need to be comfortable with what they are signing and satisfied that they can comply with any ongoing obligations. The benefit of this finality is that it ensures that neither spouse can renege on the agreement reached but naturally, this cuts both ways.

It is worth noting that provision for spousal maintenance always remains variable (by way of court application if changes cannot be agreed) and thus, either party can seek to vary maintenance, upwards or downwards, if there has been a change of circumstances (for example, a drop in the paying party’s income).

The 2018 Supreme Court case of Mills v Mills does however demonstrate that such an application cannot be used as a tool to reopen capital claims under the guise of a need for higher spousal maintenance.

The parties had divorced in 2002 and reached a financial agreement by consent. The wife received a £230,000 lump sum which would enable her to purchase a mortgage free property, thereby providing her with a home for life. The husband also agreed to pay annual maintenance of £13,200 per annum. The wife in fact utilised a mortgage to buy a more expensive property and over the course of the following 7 years sold and purchased a series of different properties. With each purchase the amount which she borrowed increased. In addition, she did not appear to reinvest the entirety of the sale proceeds from one property into the next. She sold her final property and moved into rented accommodation in 2009. Her capital continued to deplete over time, so much so that by April 2015 she had no capital and debts of £42,000. Due to the need to pay rent from income alone, the wife found herself with a shortfall between her income and outgoings. As such, she applied to vary her maintenance upwards, requesting that the husband discharge her monthly rental costs. The husband cross applied to vary the maintenance downwards. The first instance decision was that the maintenance should stay at the level as per the original the order. This was overturned by the Court of Appeal, however, the husband subsequently appealed to the Supreme Court who reinstated the initial decision. This was on the basis that the original order made provision for the wife’s housing need and therefore the husband should not have to make further provision for this.

Parties should take heed of the lessons from Mills v Mills when entering into a consent order, namely that once capital provision has been agreed and set out in a consent order there is very little scope for altering this via any means. As such, parties should think carefully before reaching an agreement and consider whether it is something that they are willing and able to stick to long into the future and factor this into their financial decisions going forward.

Practical considerations – divorce

A consent order cannot be submitted to the court until a divorce petition has been issued and the decree nisi has been granted. Therefore, it is important to get this separate process underway as soon as possible so that the consent order can be sealed at the earliest opportunity.

It is advisable to refrain from applying for decree absolute (the final stage of the divorce that legally dissolves the marriage) until the financial consent order has been sealed by a judge. This prevents a lacuna arising which would see parties no longer married but without financial arrangements in place. This is particularly important if one of the parties passes away before the consent order has been sealed. As set out above, the decree absolute is the final stage of the process as this means that the consent order is legally binding.

If you have any questions regarding the issues discussed in this post, it is essential you get specialist legal advice. Book your appointment with us today