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

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The last year has continued to be dominated by COVID-19 with a huge impact on international high net worth divorce, the court system and how lawyers have adapted their practices.

Most financial hearings have taken place by Zoom or the court’s video platform system. Court bundles are now almost always electronic and Zoom meetings with clients or barristers commonplace.

The full effects of Brexit have yet to become clear – there will no doubt be a steady stream of forum disputes regarding divorces filed in EU Member States; a fight as to where the fight about money should take place. At the time of writing, the EU continues to block the UK’s signatory to the Lugano Convention, which means no uniform recognition of judgments throughout the EU, Switzerland, Norway and Iceland. There remains no uniform recognition of divorces granted in England and the true problems and complications that this will cause have yet to be revealed.

The pandemic has triggered a large number of divorces, and pre-nups for weddings postponed from 2020. However, many of the internationally wealthy have chosen to sit out the worst of the lockdowns in England in their other homes where the restrictions are less onerous, or in the Maldives or their chalets in Switzerland.

The new no fault divorce law, due to come into force in September 2021, will now only come into force on 6 April 2022. Therefore, sadly, there will be another six months or more of couples having to rely on adultery or unreasonable behaviour if they want a divorce straightaway. The new no fault divorce law will mean a period of 26 weeks between the start of the divorce process and the earliest it can be finalised.

This year has seen more landmark decisions. In Potanina v Potanin, the Russian wife successfully appealed a decision setting aside the court’s grant of permission to her to apply for more money following a Russian divorce in which she received up to USD80m when she alleged the husband was worth up to USD20bn.

The saga of Akhmedov continues to run with Mrs Akhmedova defeating an application to strike out her claim for the committal of the Liechtenstein trustees. The wife unusually succeeded in obtaining an order against her own son for over USD100m to be repaid. The hearing of the wife’s application for the committal of the Liechtenstein trustees has been adjourned, the wife having obtained orders for over USD1bn to be repaid.

In terms of alternative dispute resolution, the Court of Appeal in Haley v Haley held that in family proceedings there is a wider ability to challenge the arbitrator’s decision than in other arbitration cases. In AS v CS, Mr Justice Mostyn endorsed the significance of private as opposed to court-based Financial Dispute Resolution (FDR) appointments, requiring that parties attend agreed private FDRs unless the court orders otherwise. Most cases settle at FDRs and private FDRs have the advantage of the ‘Judge’ having more time available to aid settlement.

Finally, in terms of reporting restrictions, Sir Frederick Barclay’s divorce judgment remains unpublished despite Mr Justice Cohen making adverse findings as to the husband’s approach to the case. The parties agreed that the amount of the final award of £100m should be made public.