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  1. Wealth
April 20, 2017

Why London will remain the divorce capital of the world

By Spear's

London Courts increasingly attract a discerning group of international big money divorce cases, and the trend will continue well into the future, writes Rebecca Waterhouse

It has been reported that record numbers of tourists flocked to London over the Easter weekend, with international flight bookings increasing by 61 per cent from this time last year – and who could blame them? Steeped in history, a leading light for culture and the arts with a booming theatre district, museums, high end boutiques and sprawling department stores, home to the third highest number of billionaires anywhere in the world… London is a buzzing, metropolitan city flexing an irresistible draw over tourists across the world.

But not everyone is here for West End shows and the chance to catch a glimpse of the Queen. London has also been building a reputation for itself as the divorce capital of the world.

Over recent years, international divorce cases have come before the Courts in England and Wales time and time again. It has previously been reported by The Times that at one point one sixth of all divorce cases, and around half of the ‘big money’ cases, heard by the Court involved international couples.

Broadly, the Court will agree to preside over a case where either one or other of the parties is habitually resident in England or Wales or where no other country has jurisdiction and one or other of the parties is domiciled in England or Wales. There is a divergence of opinion among the judiciary as to what constitutes ‘residence’ sufficient for the purposes of commencing divorce proceedings, with some judges considering that habitual residence in England or Wales taken up on the day of proceedings may be sufficient if an individual has also spent time there in the previous six months, even where an individual’s main home has been elsewhere immediately before proceedings were commenced.

There is good reason why England and Wales is a favoured jurisdiction for some divorcing couples, particularly where substantial sums are involved and there is a marked inequality in earning power. Under the system in England and Wales, judicial discretion plays a huge role in the determination of financial settlement on divorce, with an equal split of marital assets often being the starting position for long marriages. The Court is renowned for being fair to a financially weaker spouse who has contributed to a marriage in ways that are not measured by capital amassed or annual income.

The recent case of Gray v Work, heard in the Court of Appeal earlier this year is testament to this fact. Mr Work and Ms Gray had been married for almost twenty years when divorce proceedings commenced. Last week, Mr Work’s appeal against paying Ms Gray half of his fortune was dismissed as the court was not convinced that he had made an ‘exceptional contribution’ or generated the family’s money without the support of Ms Gray.  The court found that Ms Gray had supported her then husband in the creation of his wealth by looking after the couple’s children, relocating to Japan and running the family home, and so was entitled to share in that wealth equally.

The judiciary in England and Wales are also renowned for their approach to financial settlements which may lead them to ‘look through’ company and trust structures in order to achieve a settlement that is considered fair.  It is worth remembering that, if divorce proceedings in England and Wales are a possibility, it is important to review structures that exist outside of the marital assets to ensure that these are as robust as possible.

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All things considered, if you are the ‘breadwinner’ the system may seem particularly unattractive. However, the Court will give consideration to pre-nuptial agreements, and these may be upheld in the Court where both parties have taken legal advice before signing.

For a spouse who is financially dependent, England and Wales is likely to be the jurisdiction of choice for the foreseeable future, and London looks set to continue as the divorce capital of the world.

Rebecca Waterhouse is an associate at boutique private wealth law firm Maurice Turnor Gardner LLP

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