Brexit and Family Law

As I’m sitting on a Eurostar train to Brussels, this is a good time to reflect on what Brexit means for family law in England. It is of course important to bear in mind that until the UK actually leaves the EU, all EU law continues to apply in full and even after that, all or some may apply.

There are two main pieces of EU law which are important for family law:

20151226_075810Brussels II: This regulation provides where you can start a divorce in the EU and where you can start proceedings about children. Wherever you have started a court case first, it stays there. So there can be a race to the court. Since English courts apply English law to divorce and financial matters and also to cases about arrangements for children, the outcome of a case in the courts in England can be very different to the outcome in another country. Don’t forget though that the other country may well apply English law to all or some of the aspects of the case. So for example in a recent case the couple are both German and live in England. The husband started a divorce in Germany and the German court applies English law to the divorce itself and also to child and spouse maintenance, but not to the sharing of assets. You need specialist advice on these matters from both (or all) possible countries where a divorce could be started.

For child arrangements the courts of the country where the child is habitually resident usually have jurisdiction. It also makes some additional provisions to strengthen the Hague Convention on Child Abduction for the EU, such as targets to deal with cases in a certain time.

After Brexit, the UK might enter into a treaty with the EU to continue the provisions of Brussels II or it might not. My guess is that it would not want to be seen as a friend of child abductors, so the pressure to enter into an agreement that apply the provisions on children cases to the UK is strong. It is not so strong on the divorce side.

Maintenance: The EU provisions for maintenance regulate where you can start a case and once you have a judgment how to enforce it in another EU country. There is already a treaty to apply very similar provisions to Switzerland, Iceland and Norway, the Lugano Treaty. So on this one, my guess is that Britain might simply become a signatory to the Lugano treaty too.

Aside from the law, and whether or not Brexit is ultimately going to happen, the immediate effect is that we cannot be certain about house prices and that Sterling has seen a drastic drop. So in any financial cases where there are assets in several countries, the comparison of the valuations is going to be difficult: If the parties (and the court) think that the exchange rates are going to recover in the medium to long term, they could take historic exchange rates from earlier in 2016. Unfortunately, since one exchange rate is going to favour one party and another the other party, this could all become contentious. This does, of course, not only affect the Sterling-Euro exchange rate, which was at €1.50 at the end of 2015 and now is below €1.20, a 20% drop, but also the Sterling-US-Dollar exchange rate and any other currency linked to the dollar or Euro in some way. Some parties might want to put financial negotiations on hold until there is certainty.

Where there are assets such as real property or shares where a current valuation is impossible to obtain, it might also be wise to wait unless it is clear an asset will be sold and the proceeds be shared equally. In that case it is just a matter for the parties to agree on the time of sale.

by Andrea Woelke