UK: An Introduction to Family/Matrimonial: High Net Worth

CHAMBERS HNW FAMILY OVERVIEW 2020 

Until March 2020, Brexit dominated everything, with its significant impact on international high net worth divorce (more on that below) but COVID-19 has made Brexit seem insignificant.

Fortunately, specialist Financial Remedy Units had been set up in Family Courts previously, together with a system of online filing of divorce applications and financial consent orders. That has proved a godsend and law firms who had embraced e-filing and paperless offices have been able to rise to the challenge of working from home. Remote hearings by telephone, Zoom or Skype have happened but have been hit and miss. One advantage is allocated timeslots for hearings and Judges better able to read papers filed electronically in advance. Big money cases remain being dealt with in the High Court where many of the Judges are proactive and forward thinking in dealing with matters electronically. Cross-examination of recalcitrant spouses remains challenging over Zoom.

There will be long term effects on court practice with more lawyers working from home.

Although it comes too late for Tini Owens (whose battle to divorce her husband went to the Supreme Court, forcing her to remain married for five years following their separation) no fault divorce is finally set to become reality after the Divorce, Dissolution and Separation Bill received Royal Assent in June 2020. Although implementation of the Act is likely to be delayed until the autumn of next year, it is the biggest change to divorce law in a generation and means that separating couples will no longer have to play the blame game to get a divorce. It will also mean that England is an even more attractive jurisdiction in which to begin divorce proceedings.

The last year has also seen a continued run of key big money cases. Pierburg makes it more difficult to establish English divorce jurisdiction, if upheld on a later case on appeal; now habitual residence must be proved from day one of six months’ residence (if the spouse is English domiciled), or day one of 12 months’ residence (if the spouse is not English domiciled).

Potanina v Potanin, where a Russian wife was refused permission to apply for more money after a Russian divorce in which she received up to USD80 million when she alleged the husband was worth USD20 billion. She moved to London after the Russian divorce. Permission to appeal has been granted; watch this space.

The Court of Appeal case of XW v XH gave further guidance on special contribution – when one spouse can claim more than half of the marital assets - and how a homemaker’s contribution can match the creation of GBP530 million by a husband. Lord Justice Moylan further clarified how to assess the non-marital value of a business set up before the marriage, and synthesised differing approaches. The wife’s award was increased on appeal from GBP152 million to GBP182 million.

The long running saga of Akhmedov continues with Mrs Akhmedova trying to enforce her award of GBP453 million around the world, and in England, including against her son who has been joined as a party to the proceedings. Knowles J has in effect endorsed third party litigation funders receiving a cut of any settlement and this will only encourage more aggressive litigation; this decision is again subject to appeal.

And in July 2020, the Supreme Court in Villiers has allowed the wife to seek a separate maintenance claim in England, despite the divorce being in Scotland, where orders for spouse maintenance are rare. In a dissenting judgment Lord Wilson, a family specialist, said this gave the wife "untrammelled licence to go forum shopping". The Villiers decision helps Mrs Potanina in her appeal.

Finally, Brexit means from 1 January 2021 that in jurisdiction disputes with the EU, the economically weaker spouse will be able to file second in time in England, and win English jurisdiction. Their (usually) husbands will be able to argue England is not a convenient forum – a fight over where the fight about money should be. This will lead to more litigation but in appropriate cases will help economically weaker spouses to receive more money on divorce. This change will make it easier to win jurisdiction in England, and so England seems likely to remain the divorce capital of the world.

Mark Harper 

Hughes Fowler Carruthers