Brexit and divorce/financial family law: do you need to take urgent steps now?
Eminent family lawyers, through the Law Society, have been working hard with the Government and Court Service, grappling with the changes
At 11pm on 31 December 2020, the ‘transition period’ following the UK’s leaving the EU on 31 January 2020 comes to an end. This results in EU Regulations and European Court decisions (which have continued to apply during the ‘transition period’) ceasing to apply to all new cases issued after that date. Instead, other existing international instruments, Conventions, and law will apply.
Eminent family lawyers, through Resolution and the Law Society, have been working hard with the Government and court service, grappling with what this means for our clients, and thanks is given to them for their extremely hard work.
Is urgent action needed?
The below highlights some of the more common place issues which may apply to a particular case, although there may be other circumstances where expert advice is needed.
Clients should consider, with their lawyers, whether they need to act urgently now and before 31 December, to take advantage of the current position.
It should be noted that the court service is currently under massive pressure, exacerbated by COVID, and as such, action must be considered without delay. Waiting until later this month may be too late if it transpires that the court does not have the capacity to process and issue the proceedings before the cut off.
Please note that the below relates to the position in England and Wales only.
Should divorce and financial proceedings be issued prior to 11pm on 31 December 2020?
If proceedings in respect of divorce and maintenance (what we term ‘needs-based provision’ and so which may be wider than periodical payments/monthly payments) are issued before 11pm on 31 December 2020, the current rules continue to apply to the orders subsequently made in those proceedings.
This includes a situation when further action may be required in the future, possibly for enforcement purposes. From 1 January 2021, other rules will apply, which may or may not significantly affect a case.
When might a client want to consider issuing proceedings urgently this year?
A client may want to consider issuing proceedings immediately if these issues apply in their case.
Securing divorce jurisdiction in a particular place:
If there is a divorce ‘race’ (where a divorce /financial proceedings might be issued in two or more EU member states (currently including UK)), where the divorce is anchored can have significant implications on a financial outcome.
Prior to 31 December 2020, the rule is that the first party to lodge proceedings secures the proceedings in that country. It is automatic.
From 1 January 2021, instead of being resolved on a first in time basis, the English/Welsh position is that a decision about which court will proceed with jurisdiction for the divorce will be based on where the court decides the parties have the closest connection.
As such, there is more scope for litigation and uncertainty. How a court in an EU member state will seek to deal with a case if they have issued first in time in the UK post the transition period is also unclear.
Applications for financial remedy after a foreign divorce:
The rules and criteria for making an application under Part III MFPA 1984 will be narrower post 1 January 2021 than currently, extending time limits before which a claim can be brought. Consideration may need to be given to issuing proceedings now, when they can be brought based solely on the habitual residence of the applicant without any time limit requirements (for needs-based claims).
Part III is often used for the making of pension sharing orders over a UK based pension following an overseas divorce, as an order from the English court is required to share an English pension. From 1 January 2021, the criteria to make an application is narrowed, and when prior to 31 December an application may have been brought, it may no longer be possible. It may be crucial for an application to be made before the end of the year.
Enforcement of orders in an EU Member State:
If a client thinks that there is a risk that a maintenance order may need to be enforced against the paying party in the future in a EU Member State, or against property located in a EU jurisdiction, if issued prior to 31 December 2020, existing arrangements will apply.
From 1 January 2021, while there may be other arrangements available suited to the case, clients should check to see if the current EU provisions may provide a better option.
It can be important for a divorce to be recognised in a EU member state, for example, if a client wishes to remarry there. There is currently automatic divorce recognition. Post the transition period, this will no longer be automatic. Although there are still mechanisms in place to achieve recognition, it might not be entirely straightforward or guaranteed success, particularly if a same sex marriage or civil partnership.
Under EU law, domestic protection orders made in any EU member state are automatically recognised and directly enforceable around the EU. This will end on 31 December 2020.
From 1 January 2021, although the UK has decided that it will recognise and directly enforce any protection order made in EU member states, the EU has not, so a client seeking enforcement of a UK protection order may need to issue proceedings in the other EU country to obtain in protection in that country.
As the above shows, some cases may need urgent consideration and action before the end of the transition period on 31 December 2020.