The other type of divorce

Share This Post

Share on facebook
Share on linkedin
Share on twitter
Share on email

We often hear people talking about leaving the EU without acknowledging that the UK has already left the EU (31 January 2020) and that we’re currently in a transitional period which runs until 31 December 2020.

Our article Remember Brexit? we considered some of the potential financial planning impacts of the end of the transitional period. In this article, as we’re recognised as experts in the financial aspects of divorce, particularly in respect of pension sharing, we thought we should turn our attention to the potential impact on divorce, of the BREXIT divorce.

We’re not gamblers (it’s not an appropriate pastime for investment advisers!), but, if we were, our money would be on the UK/EU agreeing a last-minute, very narrow deal. If we’re right this will create quite a few uncertainties. Whilst we don’t yet have the answers, we thought we’d share some of our questions:

When there has been a foreign divorce, English courts have not had jurisdiction to make a pension sharing order unless there was an ongoing connection such as domicile or residence; that was until Article 7 of the European Maintenance Regulations which allowed the court as forum conveniens, to make a pension sharing order when there has been a foreign divorce. This has been a powerful tool, we’ve helped secure a multi-million pound pension sharing orders for foreign divorce cases. One of our cases was for a British, naturalised American against her Irish, naturalised American former husband’s UK oil company final salary pension scheme. We provided evidence to the US court hearing the divorce and arranged UK legal representation. We fear this type of opportunity to achieve an equitable financial settlement in complex overseas matters will cease to exist on 1st January.

Daniel Eames, writing for Resolution, notes that the UK has applied to join the Lugano Convention; Norway, Switzerland and Iceland have agreed but as yet the EU has not. This means that there are 2 potential outcomes in respect of maintenance:

  • The 2007 Hague Convention will apply meaning there will no direct jurisdiction for maintenance between the UK and the EU states
  • The Lugano Convention and Hague will apply, creating uncertainty on both sides of the English Channel, Irish Sea and North Sea.

The phenomena of cross-border divorce will almost certainly look different from January 1st as there is currently no intention between the EU and UK to negotiate a bespoke agreement in respect of divorce jurisdiction and cross-border recognition of divorces. Whilst the UK is party to the 1970 Hague Convention on the Recognition of Divorces and Legal Separations, only 13 EU member states have signed up, creating the very real prospect of two divorce proceedings in two countries, presumably, with two children matters and two financial settlements with each national divorce proceeding.

Unfortunately, domestic violence can be feature of divorce and child proceedings. England and Wales have legislation in place which serves to recognise domestic violence protection orders made within the EU, however, this recognition is one-way and reciprocal EU recognition of English & Welsh domestic violence protection orders will cease from 1st January 2021.

Statutory Instrument 2019/519, provided for by the European Union (Withdrawal) Act 2018 has been essential bedtime reading for family law professionals since publication in March 2019, this Statutory Instrument shreds some retained EU family law direct legislation and starts to ponder the “what next?”. The current Brussels II Regulation (2201/2003) particularly deals with divorce, parental responsibility, child custody and child abduction between and across the borders of member states. It seems inevitable that from 1st January 2021 the weaker provisions of the 1980 and 1996 Hague Conventions will replace Brussels II.

What does this mean? Children cases are heart wrenching for children, their parents and many family law professionals. Our view is that falling back on Hague is generally a negative move:

  • If the child’s habitual residence changes then the court may lose jurisdiction,
  • Brussels II allows a court to retain jurisdiction for upto 3 months after a child has been moved across a border, Hague does not.
  • Brussels II allows consenting parents to agree jurisdiction for children matters, Hague does not
  • Hague doesn’t allow for automatic enforcement of contact orders
  • Legal aid is not available for Hague proceedings
  • We will loose “home country” status and the ability to override the foreign court when that foreign court has decided against returning a child home

It is important to stress that we are not family law practitioners.

Our expertise is working with family law practitioners and their clients to handle the financial implications of divorce, particularly in respect of pension sharing orders.

We should not be viewed as a competent source of family law expertise, rather we’re enthusiastic, very interested amateurs. We are happy to talk to anyone and will happily refer any relevant enquiries to one of the trusted family law practitioners with whom we work.

More To Explore:

Cashflow Modelling

What is cashflow planning?

What is cashflow planning? Cashflow planning is the process of looking at your current financial situation and planning ahead for the future. So whether you’re

News

Happy New Tax Year!

Today, 6th April marks the beginning of the new tax year and a brand new 365 days of tax planning opportunities! But why the 6th

Notices:

Our posts are intended as financial education and financial information, not as financial advice, and are only suitable for UK residents. Always take professional, independent advice before acting on any information.

Investment & Retirement Solutions Ltd is authorised & regulated by the Financial Conduct Authority.

The value of investments and income from them can fluctuate (this may partially be the result of exchange rate fluctuations) and investors may get back less than the amount invested. Past performance is not a guide to future performance.

Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it.

The Financial Conduct Authority does not regulate taxation and trust advice, will writing, advice on deposit accounts, some types of offshore investment, some aspects of buy to let mortgages, commercial finance or offshore mortgages.

Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor. Unless specifically stated otherwise, our posts do not allow for the additional taxation powers which may be levied by the devolved governments.

All information is offered in good faith and is believed to be correct at the time of publication however it may be superseded following publication. E. & O. E.

Would you like to know more?

drop us a line, it's good to talk

Skip to content