INTRODUCTION Contributed by: Alex Carruthers, Oliver Heeks and Amber Raja, Hughes Fowler Carruthers
a statement that the marriage has broken down. In at least one country (England and Wales) there has been a recent move away from a “fault-based” system to a non-fault-based system. In a global world, where parties move from country to country with ease, another issue that must be consid ‑ ered when advising on these matters is the jurisdiction in which proceedings can be issued to dissolve the relationship. In general, jurisdiction in all countries is founded either on the parties’ nationality (or in some countries their domicile) or residency. Given that some countries can have significantly dif ‑ ferent financial regimes on relationship breakdown, the question of whether a party can get divorced in dif ‑ ferent jurisdictions can be of the utmost importance. Deliberately choosing one country over another to issue proceedings has given rise to the colloquial term “divorce tourism”. This generates a multitude of legal issues that may arise, including how either jurisdiction deals with the claims of the competing jurisdiction and evolve into complicated and sophisticated legal disputes that can clog up the courts for many months or years. The money at stake for ultra-high net worth parties may, however, justify this expense. Financial consequences on relationship breakdown The difference in financial consequences if a couple’s finances are dealt with in different jurisdictions can be vast. The laws that determine the division of money may reflect the societal norms of the different coun ‑ tries. For example, where there is a sophisticated and well- funded welfare state which encourages mothers to go back to work after the birth of their child, there may not be laws for the provision of spousal maintenance on divorce because it is expected that the mother will be working anyway and supported by the state. The financial award for mothers in those countries might be vastly different from those countries where it has been expected that mothers looking after children at home are as productive as the person who goes out to
work and should be provided with support from their ex-partner to allow it to continue. There is a further fundamental difference in a number of countries around the world when considering the financial consequences of a relationship breakdown. In civil countries which use the Napoleonic Code or variations of it, upon relationship breakdown, the marital regime that the parties had entered into on their marriage comes to an end. And the law has to regulate how the assets are to be divided according to the marital regime and if there is any compensation to be paid as well as maintenance. On the other hand, in common law countries when the parties marry, they do not enter into a “marital regime”; instead, they continue to act as individuals but on the relationship breakdown there is an equita ‑ ble distribution of assets and incomes between them to reflect the fact that the relationship has come to an end. Furthermore, in a number of jurisdictions around the world (including those in the EU) there is a rule of “applicable law” whereby the court may not use its own native laws to determine how finances are to be distributed but instead may use laws from other countries. If the individuals are from a different type of regime (eg, a common law rather than a civil code country) then the court where the divorce is taking place will have to interpret how the different structure “works”. This may well lead to confusion and misin ‑ terpretation. Particular areas of contrast, as well as those involving capital distribution, are whether an ex-spouse should receive maintenance after the divorce has concluded and, if so, for how long, and the level of child support that must be paid by the parties. These are matters which can have significant differences in neighbouring countries, eg, Scotland (where there is very limited spousal support) and England and Wales (which is much more generous). Some countries have financial structures that are embedded within them and therefore relationship breakdown has developed ways of taking them into account and/or dealing with them. For example, trust
7 CHAMBERS.COM
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