The value of a family business or business interest is treated as an asset and therefore part of the matrimonial pot to be distributed when it comes to negotiating a financial settlement on divorce or...
David Hodson on International Family Law: Foreign pension sharing after the EU Maintenance Regulation
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Feb 27, 2012, 10:48 AM
Article ID :97915
I am grateful to Anna Heenan of Mills & Reeves for drawing attention to another incidental and possibly accidental implication of the EU Maintenance Regulation in the context of foreign pension sharing orders and arrangements. It is her article, Scuppering Schofield? The impact of the EU Maintenance Regulation on claims for pension sharing in the February edition of the Family Law journal [2012 Fam Law 191]. In short, would it be impossible now to obtain a pension sharing order in England to implement, in effect, a foreign pension sharing order made elsewhere in the EU?
The situation presently arises in which a family court abroad is dealing with the family finances which includes an English pension and intends to or already has made a pension sharing provision. Although foreign family law orders can be implemented in England, a pension sharing order requires the cooperation of the pension sharing company. UK pension companies, like many pension companies around the world, require an order of the local court, where the pension company is based, before it will implement a pension share arrangement. This occurs not infrequently and is increasing. Within England, we have used Part III MFPA 1984 to obtain a narrow discreet pension sharing order, in effect mirroring the foreign order. Indeed, there has been many calls to include an additional Part III jurisdictional basis namely an interest in a pension in this country.
The problem which Anna Heenan helpfully identifies is that if an EU member state has already made a pension sharing order, and presuming it is maintenance defined for these purposes as "needs", then England has no jurisdiction under the Maintenance Regulation to deal with matters of maintenance again. The law in force from June 2011 operates similar provision to Brussels II namely first to issue, with an additional provision as to agreements. So by way of example, if the German courts had made a pension sharing order against a UK pension, it would seem as if this could not be implemented with a English Part III order, in effect a new and second in time maintenance order. Jurisdiction would simply not exist. This is not just an incidental example: there are a number of cases of English husbands with Army pensions being divorced in Germany having been based there with pension sharing orders from the German courts.
The domestic reforms following the Maintenance Regulation made many changes to Part III including, ironically, giving jurisdiction in the context where the parties had agreed England would deal with matters of maintenance and yet the divorce had been elsewhere in the EU. Yet it would seem that this recourse to implementing a pension sharing order from the EU might no longer be available. I'm sure this is an entirely unintended consequence.
The changes made by the EU Maintenance Regulation and the ancillary domestic changes to primary and secondary legislation are very wide reaching. There are no doubt some unintended adverse consequences. It will take time for the many implications to be worked out and appreciated by practitioners. This adverse implication highlighted by Anna is very useful. It would be of interest if any have answers to overcome the problem.
He is an English specialist accredited solicitor, mediator, family arbitrator, Deputy District Judge at the Principal Registry of the Family Division, High Court, London and also an Australian qualified solicitor, barrister and mediator. He is a Fellow of the International Academy of Matrimonial Lawyers and chair of the Family Law Review Group of the Centre for Social Justice.