Divorce has been hitting the headlines this week. Unusually though it is because legal leading lights are calling for reforms that would put the brakes on high-value settlements that have historically been the divorce headline-makers and the high costs of many divorces.

Sir Mark Potter, President of the Family Division, has contrasted the approach the English courts take to resolving finances on divorce with other European countries, calling for a review in this country.

In recent years England has often been referred to as the divorce capital of the world. Many divorce lawyers (and not a few wealthy husbands) will concede that English family law is a mess. Since the House of Lords case of White in 2000, judges in England have developed the law to give equal recognition to the non-financial contributions of, typically, wives. This has led to a number of big-money cases involving tens or hundreds of millions of pounds.

There are a number of reasons why the position in England is very different to that in the rest of Europe. The English courts have a wide discretion with which to achieve a fair settlement, giving the court flexibility to achieve tailor-made solutions. The price of flexibility is uncertainty, heavy costs and delay. Ten different judges can give ten different answers and, when millions of pounds are at stake, it is often worthwhile for litigants to take their chances in court rather than achieving an early settlement.

The English courts also have very wide powers to break up offshore trusts, set aside transactions or the force the sale of companies. A wife may not be limited to half the assets built up during the marriage and, particularly if there are children, a wife can receive a generous maintenance award for life. If you want to protect yourself by entering into a prenuptial agreement, you can do so, but there is no guarantee that your divorcing spouse, or the court, will be held to it.

There are a number of ways to try to avoid the expense and uncertainty of the court-based approach, all of which have their advocates. Some family lawyers favour and have recently begun to campaign for a collaborative law approach, which originated in the US and Canada, where the parties commit to co-operative negotiation and have to change their lawyers if that fails.

The picture in the rest of Europe is very different. The civil family law in most countries gives the courts less flexibility to deal with divorcing couples. Typically there is greater certainty and divorce awards are much lower. There are, of course, many differences between European countries, but some generalisations can be made. Most countries have a system of community of property that automatically applies to divide matrimonial property equally. In some countries marrying couples can agree at the outset that their property will be held and disposed of separately, and so community of property rules would not apply on their divorce. Typically, assets acquired before the marriage, and inheritances, are specifically excluded from any divorce settlement. Maintenance orders are also generally much lower than those in England and Wales, and are often limited to a few years. Prenuptial agreements are enforceable in most countries in Europe.

This European divide does not only span the Channel. Scotland has a very different divorce law regime. It is rare, for example, to see maintenance orders in Scotland that last longer than three years, whereas it is common to see lifetime maintenance awards in England.

The UK tax laws, and the City of London, have attracted high-earning individuals from around the world. Many have not appreciated the extent to which their assets may be exposed on divorce. A European Convention provides for divorce proceedings to take place in the country where they have first been issued. This can result in forum shopping, where one party seeks to file proceedings in the jurisdiction most favourable to him or her. This kind of activity increases where there is a profound difference between the outcomes on divorce in England and in the rest of Europe.

Many family lawyers and judges feel that the time is right for there to be an overhaul of the 30-year-old divorce laws in England and Wales. Whether that should result in a move towards a system more closely aligned with the civil law countries of Europe, or the common law jurisdictions such as the United States, is an open question. In many ways, English family law resembles that in the US, save in one important respect: prenuptial agreements are not enforceable here. Most family lawyers believe that that, at least, will change.

The author is a partner at Hughes Fowler Carruthers

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