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Divorcing expats eye London to settle claims post-Brexit

Divorcing English expatriates are turning to London’s family courts to settle costly maintenance claims following a change in rules brought by Britain’s departure from the EU, lawyers say.

Estranged couples living and working in the Middle East or Asia have been able to bring cases more easily in England and Wales since regulations governing European maintenance fell away after January 1 2021 when the Brexit transition period ended.

“We are already seeing more maintenance claims now the rules have changed,” said Alexandra Tribe, managing partner at law firm Expatriate Law.

“It is good news for expatriates wanting to bring a claim in England but who are living in countries like Dubai where spousal maintenance can be limited to three months after divorce.” she added.

Whether or not a case is heard before the English courts can make a substantial difference to the size of any financial divorce settlement.

London has been dubbed “divorce capital of the world” because of the generosity of judges in splitting wealth equally between a divorcing couple, even if one spouse is the main earner.

Before Brexit, a spouse temporarily living abroad who treated England as their permanent home, under the so-called “sole domicile” rule, could see their attempts to use domestic courts blocked or limited if one party objected, or the case fell outside certain exemptions.

But these EU regulations no longer apply, making it easier for expatriates who claim sole domicile to bring an action in England.

In cases where there is not enough money to make an upfront divorce settlement payment, British courts can opt to award annual maintenance payments, sometimes for life — as well as award a lump sum or a property transfer.

In other countries like France, maintenance is often strictly time limited and only paid for three years.

Rebecca Hick, solicitor at law firm Seddons, said: “It is still early days, but now the floodgates may have opened, we expect to see a rise in maintenance claims being brought in our courts from British citizens living abroad seeking to benefit from the more generous approach to maintenance in England and Wales generally.”

Family lawyers say that Britain’s exit from the EU has caused greater uncertainty and they expect there to be more litigation if divorce proceedings are simultaneously filed in two different countries with no statutory legal instrument determining which set of proceedings will take priority.

Before Brexit, parties were bound by the EU’s Brussels II regulations which meant that an English divorce decree or ruling was automatically recognised in another EU member state and vice versa.

Now lawyers say there may be difficulties in enforcing judgments – including those related to maintenance – from one country’s courts in another if there are parallel court proceedings.

“There is still a lot of uncertainty within family law post Brexit,” says Nathaniel Groarke, partner at law firm Irwin Mitchell.

“Whereas once you could start the divorce in England, safe in the knowledge that if you got there first, the English courts would have jurisdiction. Now, if there is a challenge to jurisdiction, the courts would need to consider which is the most appropriate country to deal with the divorce.”

“There is now the very real possibility of parallel proceedings taking place in two countries, with the potential for a race to divorce and even conflicting judgments.” adds Daniel Eames, partner at Michelmores and chair of the international committee of Resolution, which represents 6,500 family lawyers and other professionals.

Lawyers say that some uncertainty could be resolved if Britain joined the 2007 Lugano Convention which determines which countries’ courts have jurisdiction over disputes. However, in July Brussels announced the UK would be blocked from joining the convention.

This article was first published at https://www.ft.com/content/a3b4b188-49ef-483b-a8fc-39d054988c00

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The Markets Today