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Location, Location, Location
September 15, 2004
From: One cynical Feminist

Some prefer New York; others seek out London. The attraction is not theatre, shopping, the stock exchange, or tourism. It is divorce. Some venues are simply more lucrative and convenient for those seeking to end a marriage and divide up the assets.

Of course, the venue favored will depend on whether you are the wife or the husband. A May 27th article in The Economist entitled "Court in the act" described "Herr X" a rich and meandering German whose wife filed for divorce in London, their city of residence. He adroitly smoothed over marital difficulties and the couple moved to Germany, where he filed the divorce papers.

Why did Herr X nation hop? In England, pre-marital assets are usually included in divorce settlements whereas in Germany they are excluded. In England, accrued assets are awarded at the judge's discretion and the courts tend to favor women -- rather than on a 50-50 basis as in Germany. And English maintenance or alimony decrees can be lifelong, not limited as German ones. In short, Herr X preserved his past and future fortunes by divorcing closer to home.

Americans have long understood the importance of geography in matters of divorce. In the United States, divorce is under state jurisdiction with 50 states from which to choose. The key legal issues grounds for divorce and residency requirements, property division, alimony, child custody and support can vary widely both in terms of convenience and of financial impact. Regarding convenience, for example, Kentucky allows a couple to file for divorce after living "separate and apart" for 60 days; Utah requires 3 years. Regarding financial impact, Arkansas does not consider marital fault, standard of living, or status as a custodial parent to be relevant factors in assessing alimony or spousal support; New York considers all three. (Data as of November 2003)

Globalization is accelerating and along with it comes the demand for couples to relocate. This means that spouses will have increasing access to different sets of family law, which they can use to advantage. Pauline Fowler is a partner in a London law firm that includes "an extensive international family law network" which offers "a fully international service." Fowler has remarked upon a recent increase in the number of women married to Arabs who file for divorce in England, where the courts are 'friendly' to women.

The most aggressive divorce shoppers within the EU, however, are likely to be residents of member states rather than outsiders.

The 'divorce market' within the EU changed suddenly on March 1st, 2001 when a measure known as the Brussels II Regulations came into force. The Regulation required the courts of each member state, except Denmark, to enforce the family law judgments rendered by the courts in other member states. For example, courts throughout the EU recognize each other's rulings on custody. (In order to apply to a specific court, a person must reside in its jurisdiction for one year.)

Writing in the Sunday Business Post, Solicitor Geoffrey Shannon explains the implications for one member state, Ireland, where couples must be separated for four years before they can apply to terminate a marriage. Shannon writes, "if a spouse moved out of the Irish family home and lived in Belfast for one year, he or she could apply for a divorce in Northern Ireland. Once the Belfast court agrees to deal with the matter, the Irish courts would have to decline jurisdiction if the matter were challenged by the other spouse."

The Irish courts are required to recognize the jurisdiction and rulings of the member court whether or not its rulings accord with Irish family law. Shannon continues, "The Brussels II regime rewards the party who litigates earlier and will undoubtedly encourage divorce planning and 'forum shopping' (which involves choosing a country that best suits your particular claim)." He concludes, "This obviously makes speed of the essence and may lead parties involved in a transnational marital breakdown into a race to see who can get to court first."

When Brussels II was enacted, family law experts across the EU scrambled to decipher its implications. The site DivorceGuideUK, for example, offered a tortuous explanation of two convoluted legal concepts that were the keys to understanding which jurisdiction was the appropriate one to handle a divorce: the concepts of "Habitual Residence" and "Domicile".

Both the confusion and the 'forum shopping' are likely to increase in the near future. Brussels IIA is poised to replace Brussels II, and comes into effect on March 1st, 2005 throughout the recently expanded EU, again with the exception of Denmark. Brussels IIA focuses on issues of child custody, visitation, and the circumstances under which children will be returned from one member state to another. Its definitions and provisions are no less labyrinthine than those of Brussels II.

Residents of the EU are learning a lesson well known in America: in divorce, as in real estate, the three most important factors are "location, location, location."

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