International Divorce Financial Settlements

Where To Do It

“Shopping” for the right divorce jurisdiction is, however, not just for the economically weaker party, and the choices are seldom simple. England and Wales have gained the reputation of being one of the global jurisdictions of choice for the economically weaker party to a marriage. As a consequence, London has gained a reputation as the “Divorce Capital of the World”.

The following need to be considered:

• Is there a prenuptial agreement that aims to limit the choice of jurisdiction of the divorce law to be applied? Consideration must be given to the ability or willingness of the chosen divorce jurisdiction to give effect to such a provision.
• Where are the assets? Time and time again the English courts are used to achieve fabulous divorce settlements, of which nothing is ever seen by the victor. A golden rule of all litigation, but much forgotten in the chase, is the extent to which any order made in this country will be enforced abroad. Sometimes the right choice is to follow the money, not the hype.
• Who actually owns the assets? Trust and Corporate structures remain useful shields to the divorce courts in this country, making an initial analysis of their potential vulnerability essential.
• Will the costs of the battle to snare jurisdiction in England be recoverable if unsuccessful? Lawyers are unlikely to take a chance on being paid, and will require external funding, limited risk, or some guarantee of payment. London is full of unpaid divorce lawyers, who are slowly learning to make funding a significant issue, particularly in the more complex cases.

How to Do It

Having gained jurisdiction by starting a divorce, the focus should move rapidly to the financial claims.

Where there is complexity, starting a formal court led process is essential. The divorce court will fix the time frame for the process, and provide the forum for interim disputes over such things as disclosure, interim finance, the payment of the economically weaker party’s legal fees and, in some situations, freeze the control of some or all of the assets, pending a final decision.

The courts in England and Wales have some of the most robust disclosure rules in the world. There is a general obligation of full, worldwide disclosure. Non-disclosure can, and often does result in punitive action, including imprisonment. The disclosure process will regularly include the vigorous valuation of worldwide assets.
The objective is to provide the court with a reliable picture of the resources of a marriage, before distribution by the broad principles of “Sharing” and “Need”.

Sophisticated alternatives to the whole or part of the court process have emerged. Convenience and control have seen the growth of arbitration and private judging. Timing and the “Judicial Lottery” has meant that choosing your own judge has become the norm.

How to Get It

Before beginning any divorce involving an international family, an assessment needs to be made about what a successful outcome looks like. A pyrrhic victory of great press coverage on the way out of court will only satisfy the lawyer’s PR. Payment is what matters to the successful participant in a divorce. Fighting and winning a good fight only to see that their ship or superyacht has sailed, is thoroughly dispiriting and begs the question: what was it all about?

There is an old footballing expression about “playing the man not the ball”; in international divorce this often means that the economically stronger party is more likely to pay what he has been told by the divorce court to pay, if he has an emotional, financial or family connection with the UK.

If this ingredient is missing, then it must be an early warning of the need to establish some form of security (freezing orders) to protect the likely outcome. It might also, on occasions, indicate that the divorce may be happening in the right jurisdiction for generosity of outcome, but the wrong one in terms of collection and that negotiation, compromise and discretion are the better parts of valour.

Second Chances

“It ain't over till it's over“ - Yogi Berra, 1973

The English divorce law equivalent is the less prosaic Part III of the Matrimonial and Family Proceedings Act 1984. Sometimes described as a second bite of the cherry, this legislation gives the courts of England and Wales the ability to grant financial relief after a divorce in a foreign country. Breath taking to many, its origins probably lie in the concern that if it were not for this legislation, the courts in England might be forced in some situations not to recognise an overseas divorce.

The legislation makes it possible to apply to the courts in England, if there is jurisdiction, to enhance a decision in a foreign court. The existence of the legislation can give pause for thought when racing for divorce in another more “favourable” jurisdiction, or tackle the inability of courts in countries such as Dubai, to make orders in respect of assets outside of the UAE.

Experience

Representing predominantly wives in “jurisdiction races” between England and Scotland, France, Spain, Italy, Monaco, Switzerland, China, Russia, USA (Massachusetts, New York, Connecticut, Florida, California, Texas.) 

• Representing a number of wives from UAE, KSA and Gulf states and achieve jurisdiction to divorce in the UK.
• Advising and negotiating a “blended “solution, to prevent litigation in England after a divorce in a GCC state.
• Representing a wife from the Lebanon in respect of Divorce proceedings in London, involving significant world wide assets.
• Representing the mother in M v F [2018] EWFC 35 High Value Schedule 1 Proceedings, World Wide Freezing Order and Enforcement and Costs Provision.

Michael Rowlands is a fellow of the International Academy of Family Lawyers, and has been representing international families for over 30 years, with a particular connection with The UAE, MENA Region, North America, Japan, Switzerland and Monaco.