Split decisions

The EU’s efforts to reduce forum shopping for divorce cases – and potentially curtail the UK’s status as the top choice – has in reality created a minefield of legislation.

Split decisions It is not just Bond Street that is ­attracting shoppers to London. The UK capital’s courts are a hot destination too. Why? Because for divorcing couples forum shopping can make a big difference to the size of the award. Getting a divorce petition filed quickly in London can get or save you millions.

Since the House of Lords’ decision in White v White (2000), the yardstick against which a financial award is tested is equality. The ­presumption is for an equal division of assets except, that is, where an equal division is not appropriate. A discretionary review of the facts of a case is undertaken. The result is ­profound uncertainty, with more people litigating over bigger and bigger sums of money.

This does not happen in Continental Europe and in most US states, where the legal boundaries are drawn more clearly. The difference in approaches and ­therefore outcomes is exaggerated by prenuptial agreements being automatically binding in many other countries, but not here. That said, in England the law is taking more notice of prenuptial agreements. The Law Commission has said it will review whether prenups are to become legally binding, but it will be at least 2012 before draft legislation materialises. Until then individuals will have to thrash out the issues before the courts.

The EU has sought to reduce the number of forum races by introducing successive regulations – Brussels I, II and II bis – that try to prevent people filing where they do not live. Once one country is seized, any divorce started in another state must be halted.

Sounds simple? In reality, it is often a minefield. First off, applicants have to race to the door of the court. The first in time to secure jurisdiction should usually win. There is little time for reflection before firing off a petition.
And it does not end there. A ‘simple’ divorce can be turned into a detailed ­assessment of overlapping issues to which a mishmash of complex domestic and ­European case law is applied, often creating new case law at the litigants’ expense.

There are no easy concepts used to ­establish jurisdiction. In Marinos v Marinos (2007) the English court decided that a ­person could only have one habitual residence and narrowed the possibility of filing where a party did not mainly live. But has the possibility of having concurrent ­habitual residences found in Ikimi v Ikimi (2001) been killed off completely? Possibly not.

Even once jurisdiction is established, there are often competing arguments about the application of other parts of the EU ­regulations, or indeed foreign law.

For example, what about the clause in a marriage contract that pre-states the ­country for the divorce? Is that an election of exclusive jurisdiction under Brussels I? In Ella v Ella (2007), a non-European case, the English court held the parties to an election to divorce in Israel, but had it been an EU case the result would probably have been the opposite.

Consider also a situation in which a prenup agreement only ensures that capital provision and divorce proceedings are ­started in the jurisdiction chosen in the agreement. If a claim for income is issued elsewhere, then the question becomes when and with what type of claim was each ­competing jurisdiction seized, and should one stay any related proceedings?

The definition of maintenance also does not help, as there isn’t one. In Van den Boogaard v Laumen (1997) provision for capitalised maintenance and housing was held to be maintenance and caught by Brussels I. Contrast that with Moore (2007), in which a claim based on an entitlement to share property rather than an order based on financial need was not judged as maintenance.

Under EU regulations, the court first seized with one claim is not under a mandatory obligation to stay related proceedings. Money, children and the divorce could, in theory, all be decided in different countries.

This is only a taster. The potential for ­litigation is vast.

Disputes with countries outside Europe still require concepts such as domicile and habitual residence to be grappled with. ­Ultimately, a forum non conveniens ­dispute will be thrashed out. Often there is even a dispute about which country should determine forum.

Recently it has been suggested that the European Court of Justice (ECJ) ­decision in Owusu v Jackson & Ors (2005) means that the English court has lost its power to grant stays on forum non conveniens grounds. The only case in which this has been raised, Cook v Plummer (2008), side-stepped the issue, saying it was out of context to the case, but warned that once it was raised it would have to be referred to the ECJ. Whether that is satisfactory, ­particularly as the case in which it will be raised will involve a dispute between EU and non-EU countries, awaits to be seen.

Complicated enough? Even if the case is kept outside England, shoppers may have a second bite of the cherry. How? Well, the English court has the power to make ­financial awards following a foreign divorce under Part III of the Family and Matrimonial Proceedings Act 1984, and those claims are growing in popularity.

And to think that when Brussels II was introduced the EU Council stated that: “There are grounds for enacting provisions to unify the rules of conflict of jurisdiction in matrimonial matters and in matters of parental responsibility so as to simplify the formalities for rapid and automatic ­recognition and enforcement of judgments”.

Nice try.

Julian Lipson is the head of the family law department and Claire Blakemore a senior solicitor at Withers