London is the global capital for “divorce tourism” with marriage break-ups involving foreign nationals accounting for a sixth of cases before the courts.
The legal system is also witnessing a surge in disputes between the international super-rich over business deals, contracts, children and money, leading to worries about the widening gulf in access to justice with British taxpayers who more and more find themselves unable to afford to go to law.
Inquiries by The Times have found:
• a significant increase in international divorce, now estimated to involve 24,000 of the 150,000 divorces in England and Wales each year;
• a dramatic rise in the number of commercial disputes, in which one or both parties were foreign. The percentage rose from 65 per cent in 2008 to 81 per cent in 2011;
• a huge rise in cases involving “tug of love” disputes between parents that involve two countries, from 27 cases in 2007 to 180 last year, with numbers still climbing;
• a 24 per cent rise between 2009 and 2010 in applications for permission to bring judicial reviews — a total of 10,500 in all, of which 1,100 were granted. The majority were asylum and immigration appeals.
As many as half of the so-called “big money” divorces involve people from abroad. This follows a succession of increasingly generous payouts, particularly to wives. Rewards can be so lucrative that potential divorceés are even moving to Britain in order to show that they have lived for a year, thus qualifying to use the courts.
There is also a rise in international couples seeking pre-nuptial agreements so that their wealth is protected on divorce — a move boosted by a Supreme Court ruling last year that upheld the agreement between a German heiress and her former banker husband.
But while London is increasingly the destination of choice for divorce tourists, courts and tribunals handling public law work are swamped by appeals from immigration and asylum seekers on legal aid, causing backlogs.
Judges and lawyers welcome the rising volume of litigation with a foreign dimension, claiming that it brings huge financial benefits to London. But they also acknowledge that courts are increasingly a resource for the international rich, or for those who can obtain public funding, rather than for the ordinary British taxpayer.
Desmond Hudson, chief executive of the Law Society, which has been fighting cuts to legal aid, including for family work, said: “We have always said that, at one level, this rise in international work is good for UK plc and we have a very very healthy trade surplus for professional services.
“But it is ironic that at the same time as promoting this aspect of legal services, the Ministry of Justice assumes that the answer for its fellow citizens is mediation (for divorces) and not the courts, because the courts belong to Russian oligarchs. We have got things out of balance.”
Mark Harper, family law partner at Withers, said that although his firm had benefited from international work, there was a “real concern among those doing domestic family work that if the time of judges is increasingly taken up with international wealthy litigation and three to four-week trials, then it means delay for other cases”.Legal experts said the increase in international divorce was due both to generous settlements in recent cases and to the rise in the number of super-rich foreign nationals choosing to live in London.
James Stewart, family law partner at the London firm Manches, said: “There has clearly been an increase in divorce tourism where potential divorces are moving to England hoping to satisfy our jurisdictional requirements for divorce — six months residence, if the petitioner was domiciled in England, otherwise one year.”
A significant number of foreign nationals had also relocated to London for reasons such as schooling, he said.
Mr Harper said: “Well over half of all big money divorces in London involve wealthy foreigners, because of the popularity of living in London.
“It is also a symptom of London being the divorce capital of the world, very generous to wives, and allowing a second bite of the cherry over assets after they have obtained a foreign divorce.”
But despite London’s reputation, judges have also tried to emphasise that the courts will not just displace orders of foreign courts.
Marilyn Stowe, a family law expert, said: “The Court of Appeal has certainly made it clear that it will not open the floodgates to dissatisfied spouses.
“Even if a connection with England can be fully established, and in a particular case that involved a British citizen living in her home in England, and other property in England, the court will clearly be slow to replace a foreign court’s order in all but the most exceptional of circumstances, in which “serious injustice would otherwise be done.”