Head of Michelmores’ family team and international family law expert Daniel Eames, and Private Wealth Associate Harriet Martin, explore the opportunities afforded by Brexit for couples with EU connections wishing to enter into nuptial agreements.
It has long been possible for couples with connections in more than one EU Member State to agree which country’s courts should decide a maintenance claim. In this context ‘maintenance’ essentially means ‘needs-based’ provision and has a fairly wide remit as it can include lump sum payments and property transfers, as well as monthly payments. It is common for such maintenance agreements to be included in pre (and post) nuptial agreements.
The English and Welsh courts will continue to recognise maintenance agreements made before the end of the Brexit transition period (31 December 2020) even if the parties decide to divorce after that date. However, there is no guarantee that the courts of EU Member States will recognise such agreements in favour of the courts of England and Wales (though they will continue to recognise agreements in favour of an EU Member State).
In the past it was not possible for couples (where one or both parties is an EU national) to agree which country’s courts should hear the divorce itself. This was because any such agreement would be overridden by EU law. However, this changed on 1 January 2021 when EU law stopped applying in the UK.
This presents an opportunity to couples with connections in more than one EU country to agree in nuptial agreements where their divorce should be heard. It is likely that the wealthier party will try to include in a nuptial agreement a ‘choice of court’ clause in favour of a country other than in England and Wales (which is known worldwide for being particularly generous towards the financially weaker party).
These clauses are likely to become especially popular given the mechanism that previously determined which country’s court should hear the divorce in the event of a conflict (‘lis pendens’), ceased to apply in England and Wales on 1 January 2021. Under lis pendens (otherwise known as the ‘first past the post’ rule), quite simply, the court of the country in which a divorce application was filed first would hear the divorce. Now that this rule no longer applies, if the couple has connections with more than one EU Member State, a dispute may arise to determine which country is better placed to decide the divorce. Any advance agreement between the parties will be taken into account when the courts of competing jurisdictions are deciding where the couple has more connections, and should help to resolve such disputes.
If you need advice on an international family law matter, please contact Daniel Eames, Head of Michelmores’ family team at email@example.com or Harriet Martin at firstname.lastname@example.org. Alternatively, you can also contact them on +44 (0)20 7659 7660.