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02 JAN 2013

Lucia Clark on Scottish Family Law: Boris Johnson, Alex Salmond and shopping for divorce

Lucia ClarkI read recently that it is reported that Boris Johnson, in an address to CBI, stated "I have no shame in saying to the injured spouses of the world's billionaires if you want to take him to the cleaners... take him to the cleaners in London" ( I should perhaps add it's a bit unclear whether he actually said this...).

But it does raise an interesting point. Do rich divorcing wives fare better in court in London, rather than elsewhere in the world?  

There is certainly some truth in this, due to the particular developments of English law over the last couple of decades. The latest Law Commission Consultation Paper makes quite a few of these points: many decisions under English law are decided on the basis of the applicant's "needs", a concept which has been interpreted by the court in an wide, discretionary and (in comparison to other jurisdictions) generous way. The guiding principle behind "needs" is not clear - is it compensation of relationship-generated needs? Or an adjustment to equalise positions post-divorce? Or something else? The relatively wide discretion retained by the English courts means it is open to claimants to argue that pre-marital or inherited property should be shared on the basis of the claimant's "needs", or that a pre-marital agreement should not be fully adhered to. The consultation paper also reported the view among some solicitors that there are regional variations in English divorce cases, with the most generous awards made in London and the least generous in the north of England.

So where is the jurisdiction of choice for rich husbands? Within the UK, the clichéd answer is of course Scotland, and this does have some basis in fact:

  • Spousal maintenance post-divorce in Scotland is limited to a maximum period of three years, other than in cases of extreme hardship. The purpose of maintenance is also clearly defined and limited: to allow a party who has been financially dependent to a substantial degree during the marriage to adjust to the loss of that support following divorce. It is also only awarded if that purpose has not already been achieved in an equal division of the matrimonial property.
  • There is a clear division between "matrimonial" and "non-matrimonial" (e.g. pre-marriage and inherited) property in Scotland. If a spouse wants certainty that particular assets will be disregarded by the court in a subsequent divorce, Scotland provides that.
  • There is greater certainty in relation to pre-nuptial agreements. Provided these are fair at the time they were entered into, and drafted properly with safeguards such as independent advice and no undue pressure, a Scottish Court is likely to regard these as contractually binding, rather than just a factor in the decision-making process.

However, Scots law is not favourable to claimant spouses in all respects:

  • The starting point in Scots law, since the Family Law (Scotland) Act 1985, has been equal sharing of the matrimonial property, rather than a lesser sum to meet a claimant's perceived needs. White v White (in the eyes of Scots lawyers) was not a revolutionary case.
  • In cases where an equal share is not sufficient to meet needs, the claimant can make a case for an additional top-up, to take fair account of any economic disadvantage he/she may have suffered in the interests of the other spouse or the family.
  • Pensions can also result in a more generous outcome for a claimant spouse in Scotland, given that pension CETVs (cash equivalent transfer values) are treated as equivalent to other assets, rather than being subject to a discount when offset.

I deal with cases in both jurisdictions. Swapping between my different legal "hats", I have had some cases resolved under Scots law where the wife would have received a more generous settlement in the English Courts. However, perhaps surprisingly for English solicitors, I have also had some cases resolved under English law where the wife would undoubtedly have received a more generous settlement north of the border.

Of course, politicians are particularly fond of sweeping, headline-grabbing statements (perhaps even more so than bloggers). And so despite my attempt to set out balanced pros and cons above, I did wonder whether Mr Johnson's statement might prompt our own Mr Salmond to make a counter-declaration to the rich husbands of the world: "Come to Scotland for our beautiful scenery and favourable divorce protection!"  It might be just the economic boost the country needs...

Lucia Clark is an Associate in the top-ranked Family Law Team at Morton Fraser LLP, and is dual-qualified in Scots and English law. She specialises in complex financial and cross-border cases.  She can be contacted at lucia.clark@morton-fraser.com.

The views expressed by contributing authors are not necessarily those of Family Law or Jordan Publishing and should not be considered as legal advice.

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