Deal or No Deal?

Cross jurisdictional divorce after Brexit
Deal or No Deal?
March 6th, 2019

It will not come as a surprise to most but, at the moment, we have a clear tie with our legal profession in the EU.

If there is a ‘deal’ then the current arrangements are expected to continue for the transition period but what happens if there is ‘no deal’ and the EU do not consent to an extension of time?

Current:

If a couple decide to divorce and they are EU citizens of a member state but work in another member state, the issue of which state they divorce in is governed by EU Council Regulation 2201/2003 (also known as Brussels II A or Brussels II bis).

Under this regulation, and simply put, whoever files at court an application first in time in one EU state then that state has jurisdiction to deal with both the divorce and the financial aspects. This is because of the reciprocal arrangements between all the EU member states.

That said, there are provisions to enable a jurisdiction i.e. a court in England And Wales, to "stay" (put on hold) proceedings if that court decides that another member state jurisdiction will be a more appropriate forum to conclude the proceedings.

What if there is no deal?

Presently, there are many optimists amongst us that hope, between now and 29 March, a bespoke negotiated arrangement can be put in place however and as many suspect, time is running out to enable a meaningful agreement to be put in place and there seems to be little appetite, on part of the other EU member states, to finalise such an agreement.

If there is no deal, then the "first in time" rule will not apply. At present, the government is working to replicate the current EU instruments into UK law on the assumption that there will be a reciprocity from the remaining EU members, which would mean that the effects of the current regulations continue. If that does not happen then the UK will have to recognise a decision by an EU court but there is no such requirement on the remaining EU members’ jurisdictions to recognise such a decision being made by a court in the UK.

It is anticipated that the likeliest ‘no deal’ option will necessitate repealing the current EU instruments, including the regulations, mentioned above and that would mean that we would have to revert to the pre-EU rules; in other words, the UK will be treated exactly as all other non-EU countries.

UK divorce as being recognised in the EU?

The Hague 1970 Divorce Recognition Convention, which would be the default rules, only apply to some of the EU member states and they may well recognise the UK divorce however it cannot be taken that the UK divorce will be automatically recognised in all EU member states.

Emotional strain, time taken and costs could be further impacted by having to duplicate proceedings and to deal with potentially irreconcilable decisions being made in different jurisdictions. The government is currently suggesting that ongoing divorce cases will continue under the existing rules but there is no guarantee the EU member state jurisdictions will act in the same way and recognise any judgement stemming from the existing cases.

Enforcement of maintenance orders

Presently, there are arrangements in place to deal with the jurisdiction and enforcement of maintenance awards between EU member states; the EU Maintenance Regulation (Council Regulation 4/2009) provides the framework but, and in some circumstances, couples may agree, in advance, where any dispute about maintenance is to be decided.

If there is no deal then this regulation would also, more than likely, be repealed. That said, on 28 December 2018, the United Kingdom signed and ratified the “Hague Convention of 23 November 2007” on the “International Recovery of Child Support and Other Forms of Family Maintenance” and this is in preparation for the possibility of there being no deal on 29 March 2019. The convention comes into force in the UK on 1 April 2019 and in short, effective remedies are available for existing maintenance arrangements.

The Future

It is difficult to predict what the future holds however if there is going to be ‘no deal’ it is very likely, and possibly inevitable, cross jurisdictional EU divorces will become highly complex, costly and involve protracted legal battles. There are already cases where concerns are being raised about potential changes to domestic tax rules (for example entrepreneurs’ relief) immediately, or as soon as practicable, after 29 March 2019.

Practitioners should strongly consider expediting proceedings for divorce, financial remedies and children arrangements so that orders are in place and any registration requirements are complied with before the exit date.

In addition, for consideration needs to be given when drafting cohabitation, prenuptial and also post-nuptial agreements.

For further information on this topic or any other matter, please contact Tariq M Ahmad FCILEx by telephone (+44 279 758080) or email (tariqahmad@pellys.co.uk).

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