Til death do us part?
Key Points
What is the issue?
The UK’s departure from the EU could impact cross-jurisdictional cases involving families and family commercial disputes.
What does it mean for me?
There is likely to be satellite litigation in respect of where proceedings start and an element of duplication of work across Europe in respect of implementation of orders.
What can I take away?
Whether the petitioner’s right to commence proceedings in England and Wales and the courts’ ability to implement and enforce orders across Europe is impacted by a lack of access to the Lugano Convention 2007.
Is London still the divorce capital post-Brexit?
London has generally been considered the ‘divorce capital’ of the world. The cases of Charman v Charman,1 Young v Young2 and Chai v Peng3 are of great importance, given the value of the international matrimonial pot and the legal principles that were determined. Common to all these cases was the petitioner’s right to commence proceedings in the England and Wales courts, with the ability to implement and enforce orders across Europe, given the UK’s then-status as a member of the EU and signatory to its treaties. However, post-Brexit and transitional rules, will England and Wales still be a global centre for divorce?
Pre-Brexit
Pre-Brexit, the courts in England and Wales implemented various European instruments when couples divorced or looked to resolve arrangements for children. A key piece of legislation in the area of cross-border divorce and children matters was Brussels II-A Regulation 2201/2003 (the Regulation). In dealing with jurisdictional issues relating to divorce and children matters, the Regulation defined the jurisdictional requirement to be able to commence proceedings in an EU Member State.
When proceedings started, the Regulation was used to resolve disputes between competing jurisdictions and created a system where enforcement of court orders in foreign EU courts was straightforward. The Regulation also promoted cooperation between central authorities (government agencies assisting in linking foreign lawyers and courts) across EU Member States and provided protective interim measures where there were disputes. Such was the cooperation between the courts of EU Member States and enforcement provision, the English and Welsh courts (and in particular those in London) become the unofficial divorce capital. Divorcing in England and Wales, spouses had access to expert family lawyers and well-established English legislation and case law,4 while also being able to implement and enforce orders across the EU. Deciding the most favourable place to commence divorce proceedings is commonly known in the legal profession as ‘forum shopping’, and London was typically at the top of most litigants’ shopping lists for the reasons set out above.
Post-Brexit
Post-Brexit, UK courts could only continue to rely on the Regulation under transitional rules in respect of cases that started on or before 31 December 2020.
Spouses who were citizens of one EU Member State but living in another retained a choice in respect of where the commenced proceedings occurred and retained abilities to implement and enforce in another Member State.
With the government repealing the application of the Regulation from UK law, any case brought after 31 December 2020 meant that the principle of forum conveniens applied, meaning that the decisions of England and Wales courts do not have reciprocal agreements to be followed and enforced in EU Member States, and vice versa. The absence of the Regulation will certainly have led to lengthy and costly disputes over jurisdiction, as well as duplicated proceedings and potentially unworkable decisions since the start of 2021. It is perhaps too early to say how many England and Wales-based cases have encountered difficulties in the past 12 months, given the general life of a case and slow-moving courts during the pandemic.
In any effort to ensure continuity between the UK and European legal systems, in terms of trade, commercial disputes and the family justice system, the UK applied to join the Lugano Convention 2007. This would have provided a bridge to implementing the benefits of the Regulation via the ‘back door’ with Member States and other European signatory states. However, the application was rejected by the European Commission (EC). It has been argued that the UK does not need access to the Lugano Convention as the 2005 Hague Convention on Choice of Court Agreements (the Convention) applies in respect of family matters and some aspects of divorce.
Where are the English family courts now?
In relation to resolving cross-jurisdictional child arrangements, with the UK being a signatory to the relevant parts of the Convention it can be said that little has changed given that provisions are broadly similar to the Regulation.
In terms of divorce and financial matters, there remains uncertainty in respect of cross-jurisdictional disputes and enforcement of orders abroad in the absence of treaty arrangements. For a short time at least, there is likely to be satellite litigation concerning where proceedings start and an element of duplication of work across Europe in respect of implementation of orders. Although there is some uncertainty for the English legal system and for families that separate there with an international background, the same applies for parties across Europe who are seeking to enforce orders here.
Notwithstanding what should only be seen as a temporary uncertainty, England and Wales is likely to still remain top of the list given the effectiveness of the English family justice system.
What about commercial disputes after 31 December 2020?
A separation within a family can also bring to the fore other disputes, particularly where there is a family company involved. As well as considering in which jurisdiction to bring the family proceedings, thought also needs to be given to where any cross-border commercial disputes should be brought. As with the family courts, Brexit has changed the rules on jurisdiction for commercial disputes.
If there is a cross-border element in a commercial dispute, the starting point is to look at any contract to see if there is a clause that confers exclusive jurisdiction on any particular court.
For those jurisdictions who are parties to the Convention, an exclusive jurisdiction clause in a contract entered on or after 1 January 2021 will be upheld if it complies with the Convention. This means that it must be concluded between two or more parties to determine disputes, designate the courts of one contracting states, confer exclusive jurisdiction and be in writing or otherwise be accessible for future reference. If these criteria are met and there is a valid exclusive jurisdiction clause, a party who attempts to bring civil proceedings in another Convention jurisdiction will have their claim dismissed by that jurisdiction’s courts.
The view of the EC (although this has yet to be tested) is that the Convention will only apply to exclusive jurisdiction clauses in contracts entered after the UK became a member of that Convention in its own right on 1 January 2021.
For contracts with other countries, the English courts will generally uphold an exclusive jurisdiction clause and hold the parties to the terms that they agreed. There would need to be a strong reason not to do so.
If there is no exclusive jurisdiction clause, the English common-law rules will apply. In those circumstances, the English court’s jurisdiction will be conferred by one of the following means:
- by serving the defendant with the proceedings either within England and Wales;
- by serving the defendant overseas if the court has given permission to serve abroad. To obtain permission, it is generally necessary to demonstrate that the case has some connecting factor with England and Wales (e.g., that the contract is governed by English law or was breached in England); or
- by the defendant submitting to the jurisdiction of the English courts (e.g., by filing a defence).
The English court will usually refuse jurisdiction if it is satisfied that there is another court that is a more appropriate forum within which to resolve the dispute on the ground of forum non conveniens.
Conclusion
The English Civil Procedure Rules 1998 provide for disclosure of documents that are both helpful and harmful to a party’s case, which is not the case in all jurisdictions. These are not factors that are impacted by Brexit, and it is anticipated that the English courts will continue to be regarded as a global centre for the resolution of cross-border commercial disputes, including those that arise as the result of a family breakdown.
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