International Divorce - What Is Meant By ‘Jurisdiction Shopping’?

International Divorce - What Is Meant By ‘Jurisdiction Shopping’?

In high net worth (HNW) divorce, selecting the right jurisdiction can make a dramatic difference to the financial settlement eventually reached between you and your spouse. Jurisdiction shopping, the practice of selecting a particular jurisdiction for divorce proceedings to achieve a more favourable outcome, is often the first dispute that must be resolved in international HNW divorce cases. Complex and emotionally charged, jurisdiction disputes require both parties to be advised and represented by a Family Law Solicitor experienced in international divorce.

What are the benefits/risks of having a divorce financial settlement determined in the English courts?

London is considered the divorce capital of the world because in the landmark decision in White v White [2000] UKHL 54, Lord Nichols declared that achieving fairness in a financial settlement meant that “there should be no bias in favour of the money-earner and against the homemaker and child-carer”. In addition, the presiding judge in the financial settlement case has huge discretion concerning how finances will be divided. A judge must consider all the factors set out in section 25 of the Matrimonial Causes Act 1974, but the way the factors are applied to the facts is left mostly to their discretion. Finally, compared to many other jurisdictions, the Courts in England and Wales take a much wider view of what constitutes matrimonial property.

For the financially weaker party in a HNW divorce case, having the financial settlement decided in London means there is a good chance they will receive a more generous settlement than what would be possible in other jurisdictions. For the financially stronger spouse, the risk that they may lose more than half their wealth if the financial settlement case is heard in the British capital means it is often in their best interests to fight tenaciously to file for divorce in another jurisdiction before their spouse files in London.

Can I file for divorce in England and Wales?

Neither spouse must live permanently in England and Wales to have the right to file their divorce petition in London. However, you need to have sufficient connection to the jurisdiction. You may be able to have your case heard in London if:

• You and your spouse are habitually resident in England and Wales.

• You and your spouse were both last habitually resident in England and Wales and one of you continues to reside there.

• The Respondent is habitually resident in England and Wales.

• The Applicant is habitually resident in England and Wales and has resided there for at least one year immediately before the application was made.

• The Applicant is domiciled and habitually resident in England and Wales and has resided there for at least six months immediately before the application was made.

• You and your spouse are domiciled in England and Wales.

• You or your spouse is domiciled in England and Wales.

What is the difference between domicile and habitual residence?

The terms domicile and habitual residence often cause confusion among our clients. Simply put, domicile is the country you regard as your home. For most people, this is the country in which they were born. However, you can choose to change your domicile if you move to another state and regard that nation as your permanent home. Habitual residence, on the other hand, refers to the country in which your day-to-day life takes place. For example, your habitual residence may be where your work, hobbies, and social life takes place and where your children go to school. This is different from domicile – you could live in London during term time so that your children can attend school but consider your permanent home to be the country in which you where born.

In Pierburg v Pierburg [2019] EWFC 24, both spouses, who had been married for three decades, were German citizens. They had a Prenuptial Agreement which stated that Mrs Pierburg would not make any claims on her husband’s assets nor apply for spousal maintenance in the event they divorced.

Upon the breakdown of their marriage, Mrs Pierburg’s solicitor advised that a German court would likely uphold the terms of the Prenuptial Agreement. However, an English court could set aside the agreement and award her a generous financial settlement.

The couple lived in Switzerland and had a house in London. Upon leaving her husband, Mrs Pierburg moved into the London property. After six months, she filed for divorce in England arguing that she was habitually resident and domiciled in the UK. Her husband filed for divorce in Germany, stating that his wife had never given any indication that she regarded London as her permanent home.

After hearing the evidence, the Court ruled in Mr Pierburg’s favour. Previous case law held that, to establish habitual residence, a spouse had to be “habitually resident”, and not merely “resident” in the jurisdiction for the six or twelve months required before they could file for divorce. Evidence showed that before 2017, aside from the London home, Mrs Pierburg had no ties to the UK. Regular visits to London did not make her a habitual resident and as far as domicile was concerned, her emotional and physical ties clearly lay in Germany.

What is a Hemain Injunction?

Deriving from the Court of Appeal case of Hemain v Hemain [1988] 2 FLR 388, an Hermain injunction is a temporary interlocutory injunction that prevents one party in a divorce from trying to bring litigation proceedings in another country. For the Court to grant a Hemain Injunction, the party seeking the injunction must prove that their spouse acted vexatiously, oppressively, or unconscionably in purposely delaying litigation in England and Wales and advancing proceedings overseas to gain a legal advantage.

Final words

For international HNW couples, choosing the most favourable jurisdiction is often the first dispute to resolve when it comes to negotiating a financial settlement. A Divorce Solicitor who has extensive experience in international family law and HNW financial settlements will provide you with the best chance of securing the most advantageous jurisdiction to protect your interests when it comes to distributing matrimonial property and assets.

If you have any questions regarding this article, please call us on 0300 3732424.