Pensions, divorce and the impact of Brexit
Now a General Election has been called, the Withdrawal Agreement has been put on hold, giving less time for debate and negotiations before Exit day. Until the General Election result, it is difficult to predict whether the proposed Brexit deal will ultimately be approved and, if it is, approved before Exit Day. What we do know, however, is that the absence of any agreement that sees the current European family law legislation continue on a reciprocal basis between the UK and the remaining 27 Member States means that family law may look very different after Exit Day (whenever this may be) for those cases with an EU element.
In the following sections, we consider a number of scenarios and the changes that people who have connections with England and another EU member state might encounter for divorces, financial proceedings and matters concerning children in the event of a no deal Brexit.
Click on the links below to see answers to questions including:
If you are concerned that Brexit will affect you in the context of these issues, please click on the relevant question above or the sections below for further information. A number of terms are explained further in the glossary at the end of this blog.
As part of the United Kingdom, the individual legal states, namely England & Wales, Scotland and Northern Ireland (which each have their own individual substantive laws) are subject to a European Council Regulation known as Brussels II. The benefit of this is that in cases where there are two competing EU Members States, for example where a divorce could be started in either England or France, Brussels II sets out a road map for how those competing states should deal with the matter.
Firstly, Brussels II sets out the jurisdiction for divorce; namely what criteria the country or countries in question need to meet in order for one of the parties to be able to bring a divorce there. At present, jurisdiction shall lie with the Member State:
Situations can and do frequently arise where two Member States meet the above criteria. Whilst Brussels II provides a harmonised set of rules across the European Union on jurisdiction and recognition, the national laws of each Member State that dictates the outcome of proceedings ancillary to the divorce (for example, financial proceedings) can be very different. England and Wales is known as the “divorce capital of the world” by many, because our discretionary based system is far more generous to the financially weaker party than many other countries. A divorce in England & Wales could have a very different outcome in terms of the financial arrangements than the same divorce in France, which is generally considered a better jurisdiction for the financially stronger party.
One party may start divorce proceedings in England, whilst their spouse may start them in a different Member State, such as France. In such a situation, Brussels II sets out what the competing Member States should do. The lis pendens rule requires that the Member State second in time should stay (or pause) their divorce proceedings, a rule colloquially known as “the first past the post”. If the divorce petition in England is first in time, we know that the French court will stay (pause) their divorce proceedings. If the English jurisdiction is challenged by the other party, that legal argument will be entertained before the English court. If it is not, the divorce and proceedings ancillary to it will continue in England. The French court will only continue with their proceedings if the English court finds that England does not have jurisdiction. The reverse would be true if the French petition was first in time; our French counterparts would have confidence that the English court would stay (pause) the divorce proceedings here, whilst the question of jurisdiction is examined by the French courts (if challenged), or the divorce would continue in France if jurisdiction is not challenged. Thus, two sets of parallel proceedings are avoided. It is not a perfect system and it can lead to arbitrary and unfair outcomes, but it is certain.
Once the United Kingdom leaves the European Union, the United Kingdom will cease to be a contracting party to Brussels II, and it will no longer apply to the UK. Therefore, if we leave the European Agreement without a deal, or with a deal that sees no reciprocal continuation of the current cross border EU legislation, the question of what happens if divorce proceedings are started in both the UK and one of the remaining Member States is more complex.
The reciprocal arrangement will cease to exist. There will be no road map to state what should happen if, say, both the French courts and the English courts have a divorce petition before them.
Draft domestic legislation has been produced (“the Brexit SI”), which seeks to adopt the jurisdiction criteria set out in Brussels II (save for joint applications, which don’t apply in the UK), with an additional jurisdiction ground of the sole domicile of one of the parties. If approved, this will be relatively straightforward for cases that only have a UK connection and would not satisfy the jurisdiction criteria in any of the remaining Member States.
For those divorces where the jurisdiction criteria could be met in both England and a remaining Member State (let us use France again), it is not so simple. Will France stay their proceedings if a divorce is presented in England first, even in cases where France has the better connection? At the moment, the answer is that we hope so, but what is the position in one Member State might not be the position in another. Further, divorces based on sole domicile are not recognised in all of the remaining Member States. If you petitioned for divorce in England based on either you or your spouse having their domicile here (but not both of you), you may struggle to have your divorce recognised in some of the remaining Member States in the future.
Without a reciprocal agreement, we will return to the law as it was beforehand, and any forum disputes will be determined by looking at which country has the closest connection to the parties (“forum non conveniens”). A fairer system in terms of outcome? Almost certainly. However, a return to forum non conveniens could see increased court time and therefore costs as every connecting factor is examined in detail.
The answer to this is that, at this point in time, we don’t really know. There will no longer be a requirement for a Member State, second in time, to stay their proceedings. However, it is hoped that the huge disadvantages of two parallel sets of proceedings will be recognised across all 27 Member States. Those 27 Member States, individually, have different domestic laws and politics however, so whilst we may have a reasonable degree of confidence in what some Member States might do, this is unlikely to be uniform across all 27. Taking local legal advice in the relevant jurisdictions will be of key importance, before any significant steps are taken and costs incurred.
At present, UK divorces are recognised throughout the European Union automatically by virtue of Brussels II. On Exit Day, this will cease to apply, and UK lawyers will instead need to make reference to the 1970 Hague Convention. Presently, however, only twelve of the remaining EU Member States are signatories to the 1970 Hague Convention. Whilst local legal advice should always be taken, it is considered that these 12 Member States are likely to recognise UK divorces. The 15 Member States who are not signatories present more uncertainty, although, politically, it is difficult to see why those Member States would cease to recognise UK divorces, as they have recognised them for so many years. Taking local advice, however, is imperative.
Only 14 of the remaining 27 Member States allow same-sex marriages, with seven countries actually banning same sex marriage in their constitutions. Only 13 of the 27 remaining Member States recognise civil partnerships. Currently, under EU law, same sex marriages are likely to be recognised. After Exit Day, it is not clear if same sex couples will benefit from this protection. From an outgoing perspective (i.e. cases going out of the UK), divorce arising from same-sex marriages should be covered by the 2007 Hague Convention. The position with civil partnerships, however, is less clear. As with many legal issues after Exit Day, having the benefit of local legal advice from the Member State in question will be invaluable to consider whether there will be any issues with an English or Welsh Decree Absolute and the connected rights being recognised in the Member State in question.
Two areas where we are likely to see big changes are maintenance and pensions. There are also concerns about enforcement and recognition of English orders, which is dealt with separately further below.
Currently, the United Kingdom applies the Maintenance Regulation.
In a similar fashion to Brussels II with divorce, the Maintenance Regulation contains a code of jurisdiction, which is applied between the Member States on a reciprocal basis. Under the Maintenance Regulation, in matters relating to maintenance obligations in Member States, jurisdiction shall lie with:
As with divorce petitions, the “lis pendens” (first past the post) rule applies; if proceedings are started in two Member States, the Member State second in time will stay, or pause, their proceedings.
At present, in EU cross border cases, the court faces limitations on maintenance claims based on needs where the only connection is sole domicile or sole nationality. Article 3 of the Maintenance Regulation states that EU Member States only have jurisdiction for maintenance when either party is habitually resident in that country or when ancillary to divorce proceedings, provided jurisdiction for the divorce proceedings is not based exclusively on sole domicile. This means that for cases where sole domicile is relied on (i.e. when other tests for jurisdiction cannot be satisfied in the UK or any other Member State, or where there are connections with countries outside of the European Union), the United Kingdom (as with the other Member States) cannot currently make needs based maintenance awards. For spouses where the only basis they can rely on is sole domicile, this is unsatisfactory and unfair.
On Exit Day, the Maintenance Regulation will cease to apply to the United Kingdom in the event of a no deal. Instead, the United Kingdom will apply the 2007 Hague Convention to maintenance issues, having now independently ratified it, and it will apply immediately on Exit Day.
Unlike the Maintenance Regulation, the 2007 Hague Convention does not contain a code of jurisdiction in the way the Maintenance Regulation does, and no domestic legislation has been proposed to replace the jurisdiction provisions that we will lose. Prior to Brussels IIa, the position was that maintenance jurisdiction would follow divorce jurisdiction. It is currently presumed, therefore, that unless a jurisdiction provision is provided for in our domestic legislation, this is the intended position post Brexit, as in the absence of replacement domestic law we will revert back to the pre-Brexit law. How that will be viewed by the remaining EU Member States remains to be seen. It will be important (in fact, essential) to consider the jurisdiction rules in any remaining Member State where enforcement might be necessary as early as possible.
After Brexit, the restriction on sole domicile cases will fall away. This is, on first glance, good news to litigants who would otherwise have no means by which to start a divorce petition. However, an order based on sole domicile may not be recognised or enforceable in some of the remaining Member States. Therefore, if the only jurisdictional basis you can satisfy is that of sole domicile, and there is a prospect that you may need to enforce a financial order in one of the remaining Member States (because your spouse is unlikely to comply with an order), take local advice in that Member State at an early stage. Where you can plead multiple grounds in your divorce petition (in addition to sole domicile), it is advisable to do so, to guard against the risk that your order will not be recognised where it was based on sole domicile only.
Unlike the Maintenance Regulation, not all of the Member States are signatories to the 2007 Hague Convention. At the time of writing, only 12 of the remaining 27 Member States are signatories and of those 12, they may have made some reservations or declarations in respect of some provisions of the 2007 Hague Convention and it is important that these are considered. As with non-EU states, for those Member States who are not a signatory to the 2007 Hague Convention, it will be important to consider that Member State’s domestic legislation or code in respect of maintenance. If we leave the European Union without a deal, it is critical to take early, comprehensive parallel advice in the relevant foreign jurisdiction.
Currently, if you have divorced in a Member State and you and your spouse have no ongoing connection with England & Wales, save for the existence of your spouse’s English pension, there is a route available to you to seek a pension sharing order against that pension. That route is provided under article 7 of the Maintenance Regulation. This means that if article 7 can be engaged, a spouse with no ongoing connection to the UK can apply to the English court for an order that a percentage of their ex-spouses’ pension is transferred into a pension fund in their sole name. This can be invaluable, particularly where the UK pension is of considerable value compared to the rest of the assets in the case.
After Exit Day, we will no longer apply the Maintenance Regulation and will therefore lose the benefit of article 7. At the time of writing, there are no plans to introduce a similar provision into our domestic legislation before Exit Day. That means that on Exit Day, the English court will no longer have the power to make an English pension sharing order against an English pension where the parties have no ongoing connection with the UK and the divorce and financial proceedings have been dealt with elsewhere.
This is likely to affect a small percentage of cases, but for those who are affected, it is a big and disappointing change. If you are considering making such an application, you should do so before Exit Day.
The European Maintenance Regulation provides automatic recognition and enforcement of a maintenance order in another Member State without any other proceedings for everyone but Denmark and the UK. For orders from the UK and Denmark, a further declaration of enforceability is required, but this is relatively simple. Subject to that, an English maintenance order will be recognisable and enforced straight away in any of the 27 Member States currently, and a party can apply directly to the court in the state they wish to enforce or via the central authorities.
On 18 January 2019 the European Commission produced guidance for member states, dealing with jurisdiction, recognition and enforcement in civil justice and private children law. Whilst it is guidance only, it states that an EU Member State will not give effect to a UK order made before Exit Day unless the required registration process has been concluded before Exit Day. More generally, unless there is overriding EU guidance or agreement in place, the position taken on UK orders and decisions will be down to each individual Member State, as per their national law. The position could differ between different Member States and parallel advice in the country in question will be crucial.
Where both parents have parental responsibility, one parent cannot move a child out of the country permanently without either the consent of the other parent or an order of the court. That will not change after Exit Day.
What may change, however, is the protections and safeguards available in the event that a child is moved without consent or a court order (i.e. abducted), or if soon after an agreed move, arrangements break down.
Currently, we apply Brussels II to children cases between the UK and the other Member States. This will cease to be the case on Exit Day, and instead we will need to look to the 1996 Hague Convention and the 1980 Hague Convention, with some protective provisions lost as a result.
For children proceedings, jurisdiction usually lies with the court of the country in which the child is habitually resident . The habitual residence of a child can change to the new country in a short time. Brussels II, which will apply to UK cases until Exit Day, states that within the first three months following the lawful move of a child to another Member State, the child’s habitual residence remains in the “left behind” state. This gives a window (albeit a short one) within which the “left behind” parent will be able to ask the court of the child’s former Member State to deal with any issues that arise. For example, if a father agree to the mother moving from England to Spain with the child, but on the basis of an agreed contact arrangement, in the event that issues arose or that arrangement broke down in the first three months, Brussels II allows that father to ask the English court to deal with it, including with making any modifications to the order. Whilst this is a small window, it is reassuring. The father in this situation would not have to grapple with a foreign jurisdiction and could continue using his English lawyers.
After Exit Day, Brussels II will cease to apply and we will instead need to look at the 1996 Hague Convention, which does not have a similar provision. As a result, this short safeguarding period is lost.
After Exit Day, we will look to the 1980 Hague Convention, as Brussels II will no longer apply. Most of the measures that currently apply in Brussels II are found in the 1980 Hague Convention, however there are some important provisions regarding the return of a child who has been abducted to another Member State by one parent, which are not repeated in the 1980 Hague Convention.
Brussels II expressly requires the expedition of cases in child abduction, with cases to be determined within six weeks, save for in exceptional circumstances. Time can be of the essence in such cases, and delays are not only distressing to the left behind parent and the child, but can cause irreparable damage to the relationship between the child and that parent. The 1996 Hague Convention does not contain such a provision. That being said, dealing with cases quickly is, in most cases, in the best interests of the child or children involved, and so it is hoped that there will be willingness amongst the judiciary to deal with such cases swiftly, irrespective of the jurisdiction involved. For parents, however, this will no longer be enshrined in law.
Under the 1980 Hague Convention, a Member State can refuse to return a child subject to a return order of another Member State if it considers there is a grave risk that the return of that child would expose him or her to “physical or psychological harm or otherwise place the child in an intolerable situation”. Brussels II allowed for this to be circumvented if (and only if) there were adequate protective measures in place to rectify that risk. Therefore, after Exit Day, even if there are adequate protections in place in the returning Member State, the other Member State (where the child has been abducted to) can refuse a return order.
However, the protective measures in the 1996 Hague Convention are considered to be wider than those under Brussels II and they have extra territorial effect, meaning they can be exercised beyond the border of the country in question.
Overall, whilst remedies will have a different legal basis, it is not considered that there will be significant practical change, save that the risk of delay (now the six week limit is no longer enshrined in law) is a concern.
A revision to Brussels II (known as the recast) (which the United Kingdom is not party to), expressly requires for the voice of the child to be heard, having regard to their age and level of maturity. This is an obligation drawn from the UN Convention on Rights of the Child and the EU Charter of Fundamental Human Rights. As the United Kingdom intends to leave the European Union, it will not benefit from any of the revisions in the recast.
The 1996 Hague Convention does not contain such a requirement. That being said, hearing the voice of the child is a well-established principle. Therefore, whilst it is not enshrined in the 1996 Hague Convention, it will be very surprising if practice changes.
The move from Brussels II to the 1996 Hague Convention has consequences for legal aid. Legal aid is not available for enforcement of orders under the 1996 Hague Convention, as it is under Brussels II, which is a disappointing blow to those litigants who need it.
Currently English contact orders are automatically recognisable and enforceable in Member States, providing the appropriate certificate is annexed to the Order. After Exit Day, English contact orders will face a two tier process with contracting states to the 1996 Hague Convention; firstly, recognition and secondly, enforcement. Whilst this is not an absolute bar, it poses the threat of higher costs for litigants and greater delays. Obtaining mirror orders, at the earliest opportunity, could alleviate any enforcement concerns, although at greater financial cost to clients, and taking local advice in parallel will be very important.
The law regarding prenuptial agreements in England and Wales will remain unchanged. However, if you or your spouse have a connection with a Member State, there are points that you may wish to consider.
The Maintenance Regulation allows parties to agree the jurisdiction that will deal with any future disputes regarding maintenance, and such agreement will give that Member State exclusive jurisdiction. These are usually called a “choice of court agreement” and such provisions are common in prenuptial agreements. If proceedings are started in a different jurisdiction, that Member State are likely to stay their proceedings so that the maintenance claim can be deal with in the agreed jurisdiction, applying the lis pendens rule.
Whilst the Maintenance Regulation will cease to apply to the UK after Exit Day, in the event of a no deal Brexit, it will continue to apply to any maintenance proceedings in this jurisdiction that have arisen from a choice of court agreement in a prenuptial agreement, whether or not it was made before or exit day. This means that after Exit Day, in the event of a no deal Brexit, the courts here could be given jurisdiction to deal with maintenance claims where they otherwise would have none, and will apply the lis pendens rule if one of the remaining Member States has jurisdiction pursuant to a choice of court agreement. What we do not know is whether Member States will view choice of court agreements electing this jurisdiction in the same way, or whether they will be disregarded. Therefore, if you have a prenuptial agreement with a choice of court clause, electing England and Wales as the jurisdiction of choice, you may wish to seek local family law advice in the connecting Member State. If you are contemplating entering into a prenuptial agreement, you should take local advice on the enforceability of such an agreement in any connecting Member State and the effect of any choice of court agreement.
A choice of court agreement only applies to spousal maintenance. The Maintenance Regulation does not permit a choice of court over child maintenance. Such a choice can be made under the 2007 Lugano Convention (although the Maintenance Regulation does not permit this). The UK is presently only bound by the Lugano Convention by virtue of it being a member of the European Union, and as the UK has yet to ratify it, Brexit will take the UK out of the Lugano Convention. There is talk that the UK intends to ratify the Lugano Convention. Should that happen, after the Maintenance Regulation ceases to apply, a choice of court agreement for child maintenance would be possible. If you are entering into a prenuptial agreement, you may wish to consider including a provision electing England and Wales as the jurisdiction of choice to settle child maintenance claims in the event the Lugano Convention is ratified by the UK.
If Boris Johnson’s Withdrawal Agreement is ratified, then we will continue to operate under the existing EU law until the earlier of the expiry of the transition period (currently 31 December 2020, unless this is extended) or the implementation of any future agreement to govern family law between the UK and the European Union. Essentially, we will not face a cliff edge on Exit Day. However, unless there are further successful negotiations, the cliff edge is only delayed until the end of the transition period.
Before Exit Day, if you are worried about whether Brexit may have implications on your family law situation, it is important that you take advice in good time. Things you may need to consider are:
The overwhelming take away message is the need to take local, parallel advice, as early as possible for ensure the best outcome and before significant costs are incurred.
If you are affected by or concerned with Brexit and family law related issues, please contact a member of our international family and divorce team or click here to get started online and find out where you stand.
We have longstanding experience in advising international clients in cases involving complex and cross-border issues and we work closely with foreign lawyers and other experts to obtain the best results for you and your family. Working alongside expert lawyers in our immigration, private client, criminal and real estate teams, we are able to facilitate obtain comprehensive relevant legal advice for our clients.
You may also be interested in reading some of our previous blogs about Brexit and international family law issues, including:
Stacey Nevin is a Senior Associate in Kingsley Napley’s family and divorce team. She advises UK and international clients on matters involving all aspects of family law, in particular complex financial issues and private children cases. She works closely with Kingsley Napley’s immigration team to support clients where family and immigration issues need to be considered in tandem. Stacey is a member of the Brexit Working Party to the Resolution International Committee and Property, Tax and Pensions Committee, a group of lawyers formed to consider the impact Brexit will have on family legislation in England & Wales.
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