London has long been recognised as the “divorce capital of the world”, due to its equitable and fair treatment in financial remedy applications following divorce. This reputation has attracted individuals, colloquially known as “divorce tourists”, seeking redress within the English and Welsh courts. However, recent developments suggest a potential shift in this landscape, prompting reflection on the future of London’s standing in the realm of international divorce. Victoria Cannon, Partner and Head of Family Law at Hugh James explains.
The appeal of London
The matrimonial laws in England and Wales have a starting point of a 50/50 asset split and have been appealing to divorce tourists for years. This contrasts with the often less lenient settlements in overseas divorces. Litigants have favoured seeking financial remedy in London or proceeding with a divorce abroad and later requesting their case to be heard in England and Wales (if they can prove a connection with either country), showcasing the phenomenon known as “divorce tourism.”
Navigating the legal landscape of international divorce
To apply for financial relief in England and Wales after an overseas divorce, individuals must seek permission under Part III of the Matrimonial and Family Proceedings Act 1984. The court evaluates the strength of the connection to England and Wales, considering factors such as domicile, residence, and business interests. A recent case, Pierburg v Pierburg (2022), exemplifies the importance of establishing a substantial connection for the court to grant permission.
Case study – Pierburg v Pierburg 2022
An illustrative example of the criteria discussed above is the recent case of Pierburg v Pierburg, involving two German nationals. The husband initiated divorce proceedings in Germany, where the wife anticipated limitations on her maintenance and other awards. Despite the husband’s insistence that she was “German to the core”, Clarissa Gisela Pierburg took her case to the courts in England and Wales under Part III. She argued that concluding financial proceedings in Germany would result in hardship.
Mrs. Pierburg emphasised her connection to England, having worked as an “au pair” in London many years prior. Additionally, she owned a house in Knightsbridge, although the couple primarily resided in Switzerland for tax purposes. Their son also received education in the UK. Despite originally reaching an agreement with her husband in a Dusseldorf hotel, Mrs. Pierburg obtained leave to pursue her case in England and Wales. Unfortunately for Mrs. Pierburg the final outcome did not surpass the agreement reached in Dusseldorf.
Nevertheless, the key takeaway is the acknowledgment of Mrs. Pierburg’s sufficient connection to have her case heard in England and Wales. This case further contributed to the narrative labelling London as ‘the divorce capital of the world.’
Changing tides
Recent developments, exemplified by the Pontanina v Pontanina case in the Supreme Court, indicate a shift in the scrutiny applied at an early stage in litigation. The court now examines cases more closely, demonstrating a more cautious approach in granting permission for international divorce cases. This decision reflects a potential turning tide in the leniency previously associated with London’s courts.
On January 31 2024, the Supreme Court delivered a highly anticipated judgment in an international divorce case involving Russian nationals. The wife, dissatisfied with the provisions offered in Russia, sought financial remedy in England and Wales, leading to the case Pontanina v Pontanina.
The legal proceedings endured for over a decade, reflecting the complexity of the matter. Initially, the wife was granted permission to pursue her claim, prompting an appeal from the husband. Despite the Court of Appeal upholding the wife’s permission, the husband persisted with another appeal. However, the dynamics changed when the Supreme Court overturned the wife’s permission, directing the case back to the Court of Appeal for reconsideration.
This turn of events mandated a thorough re-evaluation of the case by the Court of Appeal, with both parties presenting their arguments before a determination regarding the grant of leave was reached. The significance lies in the heightened scrutiny and analysis the court now applies before permitting a spouse to bring a claim in England and Wales.
The Pontanina v Pontanina case underscores the evolving legal landscape and the increasing meticulousness in evaluating international divorce cases, signalling a potential shift in the approach to granting permission for such claims.
Uncertain future for London
Opinions differ on whether London will maintain its reputation as the “divorce capital of the world”. While some argue that ultra high net worth litigants may still find value in the English legal system, others believe that increased scrutiny may deter potential litigants, especially those unable to bear high legal fees.
Others contend that as the judgement insists that both parties are heard, this places the applicant spouse under more pressure and scrutiny to make their case. Previously, the burden was on the opposing spouse to overturn the decision with a “knockout blow”. The chances of succeeding may be reduced with a hardened opponent, who may persuade a court against granting leave. The bar to succeed has been raised.
Considerations for the future
As the legal landscape evolves it is uncertain whether London will retain its reputation as the “divorce capital of the world”. It is crucial to recognise the overarching purpose of Part III applications – to provide redress for hardship in overseas jurisdictions. The process should not be viewed as an opportunity for a “second bite of the cherry”. The recent scrutiny applied to cases indicates a potential move away from the perception of London as a “soft touch” for divorce settlements.
Conclusion
The recent legal developments suggest a nuanced shift in the international divorce landscape, challenging London’s status as the undisputed “divorce capital of the world”. As courts apply increased scrutiny, litigants and legal practitioners alike must adapt to evolving trends.
