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Bust-ups and backlogs

London's generous divorce payouts are driving a jurisdiction race among the super-rich

London has earned a reputation as being the divorce capital of the world for high net worth divorces. This is unsurprising given the generous divorce payouts which have been awarded over the years by judges in London to the financially weaker party, normally the wife. This generosity is highlighted when it is compared to the relatively limited awards made on divorce in certain other jurisdictions in Europe and throughout the rest of the world. The judges in this country have extremely wide discretion when deciding how assets should be divided upon divorce.

"Divorce tourism" is becoming increasingly common because so many families have connections to more than one country and live international lifestyles. On divorce, a non-domiciled spouse may not be limited to issuing divorce proceedings in one country but instead, can choose a country which will provide him or her with the most financially beneficial outcome. Although London is first choice of jurisdiction for the financially weaker spouse, it is the last destination of choice for the wealthier spouse who would rather do battle with their other half in any jurisdiction around the world other than this one. This may result in a jurisdiction race.

As a result of the fact that London is the destination of choice for wives, the divorce courts in the capital are seeing a significant rise in the number of divorces with an international element. Around one sixth of divorce cases before the courts in London involve foreign nationals. The divorce payouts in the capital can be so significant that potential divorcees are moving to Britain to ensure that they can issue divorce proceedings later down the line. In addition, our legal system also allows parties with connections to this jurisdiction to invoke the assistance of an English tribunal in certain circumstances following an overseas divorce. Although judges have done their best to emphasise that the English courts will not replace a foreign court's order lightly, it has nevertheless led to an increased level of foreign litigation in the capital. Another factor credited with encouraging international spouses to obtain divorces in London is that the English courts have the power to decide whether a prenuptial agreement should be binding on the parties or not. It is not only divorces which has increased our courts' workload but also cases involving child abduction or disputes about residence and contact of a child because more children are born to foreign parents.

This upsurge in foreign disputes has resulted in an increase in business in the capital and can only be positive for the English legal profession. However, it has put an enormous strain on the court service. The courts are being used increasingly for spouses of the "super rich" who are able to cherry pick the most beneficial jurisdiction to deal with their divorce or for those who are eligible to qualify for legal aid. Consequently, justice is becoming inaccessible for the ordinary British tax payer who may not be able to afford the cost of litigation, particularly if there are substantial delays due to the lack of court resources. 

This article first appeared in the Lawyer on 23 April 2012.

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