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The implications of a no-deal Brexit for divorce

Feb 11, 2019, 08:09 AM
The implications of a no-deal Brexit for divorce
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Partner Peter Morris, of Shoosmiths in Leeds, discusses the historically huge defeat of the existing Brexit deal in the House of Commons and the ongoing constitutional contortions, to assess what the impact on divorce proceedings will be. 


Following the ‘meaningful vote’, the historically huge defeat of the existing Brexit deal in the House of Commons and the ongoing constitutional contortions, it’s still unclear what Brexit will finally look like.  While most insist that ‘no-deal’ is the outcome that no one wants, many fear that a ‘no-deal’ scenario is growing increasingly likely, especially since the Prime Minister appears to have never embraced  ruling out a ‘no deal’ outcome.

The hope is that there will be some sort of solution which involves reciprocal arrangements (whether there is an overall deal or not) but a no-deal Brexit will have considerable implications for international family law.  This in turn will impact upon those individuals (business people and professionals especially) with multi-national and multi-jurisdictional lifestyles, business, family and property interests. It is important to also appreciate that the effects are not limited to international cases. This is because of the tax uncertainly following the UK’s expected departure from the EU on the 29th March 2019. A number of emergency budgets are perceived, which may change the tax landscape considerably.

Divorce

Around 3.8 million EU citizens live in the UK and some 1.3 million UK citizens live in the EU. For the moment (and possibly until any agreed transition period ends) various European instruments have applied when such couples get divorced.  The issue of which country they get divorced in for couples who are citizens of one EU member state, but live and work in another, is governed by EU Council Regulation 2201/2003 (also known as Brussells II A or Brussells II bis).

Under this regulation, the ‘Lis Pendens’ rule applies, which means that whoever files first in time in one EU member state essentially ensures that particular  member state court has the jurisdiction for their divorce. This only works because of reciprocity between all EU member states.  In a no-deal Brexit, the ‘first in time’ rules will no longer apply between the UK and the remaining EU member states, so the same rules will apply as they do to cases involving the rest of the world.

In that circumstance, an English Court will only stay its proceedings if there is another more appropriate forum.  Some hope for a bespoke negotiated arrangement, but there is probably insufficient time or appetite among member states to do this before 29 March 2019, when the UK officially leaves the EU.

What are the no-deal options?                            

The government is working on no-deal options which range from replicating EU instruments in UK law, assuming reciprocity from the EU (which means that the effect of Brussells IIA would continue). However, if there was no reciprocity from the EU, the UK would have to recognise a decision by an EU court that a divorce is to take place in an EU member state, but there would be no obligation on EU members to recognise such a decision made by a UK court.

Most commentators agree that the likeliest  no-deal option would involve repealing the EU instruments, including the ‘Lis Pendens’ rule, which means that we revert to the pre-EU ‘forum conveniens’ rules – in other words the UK is treated  exactly as are all other non EU countries.

UK divorces may not be recognised

That raises serious concerns about the recognition of UK divorces in the rest of the EU as The Hague 1970 Divorce Recognition Convention only applies to some EU states. Those member states may well recognise UK divorces, but it cannot be assumed that UK divorces will automatically be recognised in all EU member states. 

Costs and the time taken could be further impacted by duplicated proceedings and potentially irreconcilable decisions in different jurisdictions. The government suggests that ongoing divorce cases will continue under the existing rules, but there is no guarantee that EU member state courts will adopt the same principle or recognise any judgments stemming from these cases. 

Enforcement of maintenance orders

Progress has been made in one area at least. The EU Maintenance Regulation (Council Regulation 4/2009) currently provides a framework for jurisdiction and enforcement of maintenance awards between EU member States. In some circumstances couples may agree in advance where any dispute about maintenance is to be decided. 

However, in a no-deal Brexit, this regulation would also be repealed. On 28 December 2018, the United Kingdom signed and ratified in its own right the Hague Convention of 23 November 2007 on the International Recovery of Child Support and Other Forms of Family Maintenance, in preparation for the possibility that it will exit the EU without a deal on 29 March 2019. If it does so, the convention will come into force in the UK on 1 April 2019 meaning that effective remedies are available to those affected.

The future

In the absence of a crystal ball, the only certainty whatever the deal finally agreed (or not) appears to be that cross jurisdictional EU divorces may well inevitably become highly complex, costly and involve protracted legal battles.  The effects of Brexit are not limited to international cases. We are already seeing cases in which it has been necessary to flag up the potential for changes to domestic tax rules, such as entrepreneur’s relief, after 29 March 2019. It is difficult to see how any financial losses suffered by one party as a result of tax changes will qualify as a Barder event. Brexit is hardly unforeseen or unforeseeable. Resolution, which acts as a voice for family lawyers and promotes the highest standards of practice has issued guidance to its members. It highlights a number of scenarios where lawyers should consider expediting proceedings for divorce, financial remedies and children arrangements so that final orders are in place and any registration requirements complied with before exit day. Against that background the need for effective and informed professional advice in divorce and relationship breakdown has become even more crucial.

There is appetite among family lawyers to replicate the EU instruments in our own domestic law and maintain the reciprocal arrangements between the UK and the other EU member states. It is difficult to overstate the importance of transitional arrangements to ensure that families, particularly those with children, are not left in legal limbo as a result of Brexit.

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