Bust-ups and backlogs

London’s generous divorce payouts are driving a jurisdiction race among the super-rich

James Ferguson
James Ferguson

London has earned a reputation as being the world capital for high-net-worth divorces. This is unsurprising, given the generous payouts awarded over the years by judges in London to the financially weaker party, normally the wife.

This generosity is highlighted when compared with the relatively limited awards made in certain other jurisdictions in Europe and the rest of the world. The judges in this country have wide discretion when deciding how assets should be divided upon divorce.

‘Divorce tourism’ is becoming increasingly common because so many families now have connections with more than one country and live international lifestyles. On divorce, a non-domiciled spouse may not be limited to issuing divorce proceedings in one country, but instead able to choose
a country that will provide them with the most financially beneficial outcome.

Although London is first choice of jurisdiction for the financially weaker spouse, it is the last choice for the wealthier spouse, who would rather do battle with their other half in any jurisdiction other than this one. This may result in a jurisdiction race.

Because London is the destination of choice for wives, the divorce courts in the capital are seeing a significant rise in the number of divorces with an international element.

Around a sixth of divorce cases before the courts in London involve foreign nationals. The payouts in the capital can be so significant that potential divorcees are moving to the UK to ensure they can issue proceedings further down the line. Also, in certain circumstances, our legal system allows parties with connections to this jurisdiction to invoke the help of an English tribunal following an overseas divorce.

Although judges have done their best to emphasise that English courts will not replace a foreign court’s order lightly, this has led to an increased level of foreign litigation in the capital.

Another factor credited with encouraging international spouses to obtain divorces in London is that the English courts have the power to decide whether a prenuptial agreement should be binding on the ­parties or not.

It is not only divorces that have increased our courts’ workload, but also cases involving child abduction or disputes about residence and ­contact with a child, because more children are born to foreign parents.

This upsurge in foreign disputes has resulted in an increase in business in the capital and can only be good for the English legal profession.

However, it has put an enormous strain on the court service. The courts are being used increasingly by spouses of the super-rich who are able to cherry-pick the most beneficial jurisdiction to deal with their divorce or those who qualify for legal aid.

Consequently, justice is becoming inaccessible to ordinary British taxpayers who may not be able to afford the cost of litigation, particularly if there are substantial delays due to lack of court resources.