The impact of Brexit on divorce and financial proceedings in England and Wales

The impact of Brexit on divorce and financial proceedings in England and Wales

Family analysis: While the UK left the EU on 31 January 2020, EU law continues to apply until 31 December 2020 (implementation period (IP) completion day). Stuart Clark and Michael Allum, partners at The International Family Law Group LLP, consider the impact on divorce and financial proceedings in England and Wales going into 2021 and highlight some of the key points for practitioners to have in mind leading up to New Year’s Eve and beyond into 2021.

What are the key changes in relation to jurisdiction in divorce proceedings that family practitioners need to be aware of after IP completion day?

EU family law ends in England and Wales at 11 pm on 31 December 2020 (IP completion day). After that time and date, divorce and financial proceedings issued in England and Wales will be governed by domestic law, relying also on Hague Conventions. There are transitional arrangements in place which will affect divorce and financial proceedings issued prior IP completion day, even if the final orders in those proceedings are not made until 2021 or beyond.

During the lifetimes of our careers as family lawyers in England and Wales, jurisdiction for divorce has always been governed by Council Regulation (EC) No 2201/2003 (Brussels II bis or Brussels IIA). The substantive provisions of Brussels II bis, art 3 will continue, with some minor alterations, from 1 January 2021 by SI amendments to the Domicile and Matrimonial Proceedings Act 1973.

The fourth and fifth indents of Brussels II bis, art 3(1)(a) have been re-written into domestic law applying the Marinos school of thought (per Marinos v Marinos [2007] EWHC 2047 (Fam)), as preferred to Munro (per Munro v Munro [2007] EWHC 3315 (Fam), [2008] 1 FLR 1613), ie the petitioner needs to be merely resident and not habitually resident for the six or twelve month period leading up to the issue of proceedings. This will potentially further open to the forum shopper the already ajar door.

The residual jurisdiction, sole domicile, is presently only available if no other EU Member State has substantive jurisdiction. That qualifying element will fall away on 1 January 2021 and sole domicile will become a substantive jurisdictional ground notwithstanding any EU links.

(Tangentially, the restriction of bringing needs based claims when reliant on sole domicile will also fall for new petitions issued on 1 January 2021 and beyond with the fall of the EU Maintenance Regulation (Council Regulation (EC) No 4/2009), although it remains to be seen whether entry to Convention on the jurisdiction and the recognition and enforcement of judgments in civil and commercial matters 2007 (the Lugano Convention) will reinstate the limitation in the context of overseas enforcement. Moreover, there is uncertainty about whether 2007 Hague Convention on the International Recovery of Child Support and Other Forms of Family Maintenance also restricts needs-based orders reliant on sole domicile, as it does with sole nationality.)

Article 19 of Brussels II bis, ie lis pendens, will fall away from 1 January 2021. No more racing to court when an EU Member State potentially has jurisdiction. As is the case currently for non-EU forum disputes, the country where proceedings are issued first will not be determinative and forum non conveniens will be the rule for all forum disputes.

What will be the key changes regarding recognition and enforcement?

At the moment a divorce obtained in England and Wales is entitled to recognition in any other EU Member State pursuant to Brussels II bis. This will continue for proceedings which have been instituted, probably meaning lodged (although to be safe we would always recommend getting issued too) before 11 pm on 31 December 2020, even if the divorce is finalised next year or later. But for divorce proceedings started after this date the automatic recognition of divorce certificates across the EU will no longer be available under Brussels II bis.

The Convention of 1 June 1970 on the Recognition of Divorces and Legal Separations (the 1970 Hague Convention) may provide a solution for some countries. The UK is a signatory along with about half of the EU Member States. Brussels II bis superseded this Convention within the EU but at the end of the implementation period the 1970 Hague Convention will again be effective between the UK and other signatories and will provide means for recognition of divorces between signatories. Crucially, however, half of the EU Member States have not signed that Convention.

However, in respect of countries which are not signatories to the 1970 Hague Convention the position could be very different.  Incoming recognition should not pose any problems as under our domestic law England and Wales will recognise most overseas, civil court divorces subject to only a few criteria, but outgoing recognition could be more problematic as not all countries are as liberal in terms of recognition. If at all possible, practitioners should therefore issue divorce proceedings before 11 pm on 31 December 2020 if recognition will be needed in a non-1970 Hague Convention signatory country.    

Another area that practitioners need to be aware of is in relation to the enforcement of financial orders. At the moment maintenance orders (for which read needs-based orders) can be enforced through the EU Maintenance Regulation. As above this will continue to be available for orders made in proceedings which were issued before 11 pm on 31 December 2020 even if the substantive order is made afterwards. But if the proceedings are issued after this time/date, enforcement will no longer be available under the EU Maintenance Regulation. 

It remains to be seen whether the UK will join the Lugano Convention. It is deeply unsatisfactory that this is still unknown at this very late stage, with just a matter of weeks to go until the implementation period ends. If the UK does join the Lugano Convention this will significantly ease the problem, but it is a very complex piece of legislation. Reliance will instead be placed on 2007 Hague Maintenance Convention providing for recognition and enforcement of maintenance orders of which EU Members States are signatories. Practitioners need to advise their clients to issue Form A before the end of the year so that the EU Maintenance Regulation can be relied upon to enforce maintenance/needs-based orders if needed and appropriate.

What else should practitioners be aware of?

Pensions! Or to be more precise cases where divorce proceedings are taking place abroad with pensions based in the UK.

The courts in England and Wales have the ability to make pension sharing orders after a foreign divorce under Part III of the Matrimonial and Family Proceedings Act 1984. Traditionally there must be a connection with England and Wales in order to bring the connection of domicile or 12 months habitual residence of either party. But this can cause problems for many international families with pensions here but no habitual residence or domicile.

At the moment we are able to utilise the residual jurisdiction contained within the EU Maintenance Regulation, art 7. It gives the court jurisdiction on an exceptional basis to make needs-based orders where the courts of no other Member State have jurisdiction. But this will no longer be available after IP completion day.

The overseas divorce will need to be finalised before the application can be made, although if the financial settlement has not yet been concluded (or if it has not yet been agreed in what proportions the UK pension will be shared) it is possible to secure jurisdiction as long as leave is granted, and crucially the substantive application is also issued before IP completion day.

What steps should practitioners be considering taking prior to IP completion day?

Our three top tips for practitioners ahead of IP completion day are:

If you will require a divorce to be recognised in an EU Member State which is not a signatory to the 1970 Hague Convention, then issue the petition prior to 11 pm on 31 December 2020. ‘Lodgement’ is the test, but our practical advice is to make sure the petition is issued.

Similarly, if you anticipate your client will need to enforce a maintenance, needs-based, order in an EU Member State in the future, make sure that the Form A is issued prior to IP completion day. If it is a consent order with no Form A yet issued, make sure that the consent order is lodged with the court, with the Form A issued prior to the deadline.

Finally, take action now! If you anticipate that the changes to the law will affect your clients, act now. Do not wait until late December. If you will need to issue proceedings or seek a consent order, do so sooner rather than later. We anticipate that a large number of family law practitioners will be taking necessary steps to protect their clients’ positions right up to the deadline of 31 December 2020. The courts will undoubtedly be inundated with requests to issue urgent petitions, Form As or to deal with financial consent orders to ensure enforceability after 1 January 2021. So, act now to avoid joining the end of what could be a long queue and potentially not issued in time.  Specifically issue online especially as court offices will be very busy.

The authors are grateful to their iFLG colleague, David Hodson OBE MCI Arb, for his help on these matters and recommend his book Family Law Leaves the EU: A Summary Guide for Practitioners (Jordan Publishing).

Stuart Clark is a partner and solicitor at iFLG who specalises in all family matters, international forum, divorce and financial work. Stuart has a wide breath of experience in all issues arising from the breakdown of a relationship but particularly specialises in financial and forum matters. Michael Allum is a solicitor and partner at iFLG. Michael works in the divorce, forum and finance team.  Much of Michael’s work involves complex international issues and/or high net worth cases. He has a particular interest in jurisdictional issues and forum disputes.

This News Analysis was first published by LexisPSL Family.  


 

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