A world apart?
The law on divorce in France and England

(Source: Solicitors Journal 08.08.03 Vol 147 No 31)

Charlotte Bradley is a partner in the family department at Kingsley Napley and chair of the International Committee of the SFLA. Katell Drouet-Bassou is a London based French Avocat (Paris Bar) at Fauchon & Levy.

The law relating to divorce in England and France remains different, in spite of Brussels II. Charlotte Bradley and Katell Drouet-Bassou explain the rules affecting separating couples in both countries.

1 March 2003 saw the two year anniversary of the implementation of ‘Brussels II’ – the EC Regulation dated 29 May 2000 on jurisdiction and the Recognition and Enforcement of Judgements in Matrimonial Matters and n Matters of Parental Responsibility for Children of Both Spouses. Where proceedings for divorce (or legal separation or annulment) can be issued in more than one EC member state (save for Denmark), jurisdiction is now determined by which party wins the race to issue .

In view of the marked differences between England and Wales and other countries in dealing with the financial consequences of divorce, practitioners need to be familiar with the Regulation.

Recent years have seen an increase in the number of French nationals residing in London, and, similarly, British nationals moving to France. When a marriage breaks down, where should the divorce take place – England or France?

Pre Brussels II

Before the implementation of Brussels II, each spouse could petition for divorce in England or France according to each country’s particular grounds for jurisdiction. In England & Wales, the court had jurisdiction to entertain proceedings on the basis that either spouse was domiciled or had been habitually resident in England & Wales for the 12 months preceding the filing of the petition. In France, either party could issue or be sued there, on the basis of his French nationality, amongst other grounds, as set out in the Civil Code. When both spouses were French nationals the French court would always have jurisdiction unless the parties agreed otherwise. Therefore, unless both French spouses living in England accepted the competence of the English courts, English decisions would not be enforceable in France.

Post Brussels II

Brussels II has ensured jurisdiction to issue divorce, legal separation or marriage annulment (nullity) proceedings is the same throughout the EU contracting states. Inevitably it has reduced the number of conflict of jurisdiction cases in the courts. Under Art 2, jurisdiction now lies with the court of the particular member state:

“(a) In whose territory;
-the spouses are habitually resident or
-the spouses were last habitually resident, in so far as one of them still resides there or
-the respondent is habitually resident, or
-in the event of a joint application, either of the spouses is habitually resident, or
-the applicant is habitually resident if he or she resided there for at least a year immediately before the application was made, or
-the applicant is habitually resident if he or she resided there for at least six months immediately before the application was made and is either a national of the member state question or, in the case of the United Kingdom and Ireland, has his ‘domicile’ there or;

(b) of the nationality of both spouses, or, in the case of the United Kingdom and Ireland, of the ‘domicile’ of both spouses.”

Despite these efforts to harmonise, there is still scope for choice of jurisdiction. For example two French spouses resident in London, or a couple, resident in France but domiciled in England, could issue proceedings in either France or England. Under Art 11, the country where proceedings are first seized has precedence over other countries covered by the Regulation.

Four regimes

• Communauté réduite aux acquêts (Community of property regime)

All assets and income acquired and saved during the marrage are common property to the spouses regardless of the name in which they were acquired, apart from assets obtained by inheritance of gift, which remain personal. This regime applies to the majority of couples marrying in France since spouses who do not enter into a marriage contract fall under this community of property regime. However this ‘default regime’ does not apply in some circumstances, eg where the first residence of the couple was a foreign country (Hague Convention, 14 March 1978 ratified by France but not the UK).

• Séparation de biens (Separation of assets)

Spouses do not have any property or assets in common and each spouse retains the administration, use and ability to dispose of his/her sole own assets.

The parties may choose this marriage contract, not just to protect their assets in the event of a divorce, but to protect their assets against the creditors of the other spouse.

• Communauté universelle (Universal community of property)

This creates a total merging of the spouses’ respective assets whatever the date or however they were acquired, including gifts or inheritance.

• Participation aux acquêts (sharing of acquired assets)

This is a complex regime, rarely adopted. It involves a separation de biens during the marriage. However, on a termination (because of death or divorce), there is a division of assets taking into account each party’s financial contribution towards the family assets. .

This ‘first seized’ rule has, inevitably, meant some parties are rushing to issue a petition for divorce in the jurisdiction which they have been advised is most favourable to their interests, instead of trying to resolve their mutual difficulties without early recourse to lawyers. But should spouses really be concerned as to whether proceedings take place in England or France?

When one considers the financial consequences of the divorce, the short answer is yes. The differences between France and England can be stark.

Position in France

The French Civil Code governs matrimonial relationships and there is little room for discretion.

Each married couple is subject to one of four marriage regimes which govern the legal status of their assets. The choice of regime will have consequences, during and after the marriage, with the regime determining who owns each item of the spouses’ assets.

During the marriage, spouses can decide to adopt a regime different from the one chosen, but such a change is unusual and involves a hearing before the Tribunal de Grande Instance.

The regime elected is of paramount importance in the event of divorce.

Marriage contracts under French law, unlike English pre-nuptial agreements, are entered into for a number of reasons, not merely to cater for divorce. They are not just a private contract but are entered into before an independent notaire and are legally binding on third parties, including French courts and creditors. They do not dictate in advance the financial settlement upon a divorce, and only provide for the distribution of the family’s assets.

While the matrimonial regime determines how assets are divided after a divorce under French law, the judge has the power to order compensatory maintenance (prestation compensatoire). Its aim is to try to compensate a party for the disparity I the standing of living created by the dissolution of the marriage, whoever is responsible for its breakdown.

When the parties have decided to divorce by mutual consent and they agree on the amount of the prestation, the judge will check the amount is fair in line with legal requirements.

In these and contested proceedings, when considering the level of the sum, the judge takes into consideration the factors set out at Art 272 of the Civil Code, eg the needs of the spouse who requires it, the assets, the income and expenses of the parties, now and in the foreseeable future, the ages of the parties and their health. Regard will be had to the children’s needs in assessing this sum and a separate child maintenance order (prestation alimentaire) may also be awarded.

The amount of the prestation alimentaire cannot be varied, save in exceptional circumstances.

Since a change in law on 30 June 2000, the prestation compensatoire must (save for in exceptional circumstances) be by payment of capital rather than ongoing maintenance for the receiving spouse. The court now has the power to make a transfer of property order, something English courts have had the power to do for several decades.

However, the prestation is not common and, according to Ministry of Justice statistics (1996), it is only ordered in approximately 15 per cent of divorces. Furthermore a lump sum will rarely be equivalent to a lifetime monthly maintenance order. A report of the French Senate (29 March 2000) said the average prestation compensatoire allocated in those few cases where it is considered appropriate is £20,348. A wife cannot therefore expect to receive a windfall from a prestation compensatoire.

Position in England and Wales

When determining the financial claims of a party arising on a divorce, the court must consider the factors set out at s 25 of the Matrimonial Causes Act 1973 (MCA). These are similar to but more extensive than those in Art 272 of the Civil Code. First consideration must be given to the welfare of any minor children and the court has a duty to consider whether a clean break (ie parties have no claims against each other in the future) is appropriate. The factors are wide-ranging and include the parties’ needs, income and resources now and in the future, and their respective contributions to the marriage, including non-financial contributions by looking after the home, or caring for the family.

Unlike in France, where the matrimonial regime determines the future assets of each spouse, the English court is not unduly impeded if the assets are owned by one party alone. It considers the entirety of the family’s assets and has wide powers of transfer and sale on a divorce.

Contrary to popular belief, the last two-and-a-half years have not seen a change in the law applicable to ancillary relief and the s25 factors. White v White [2000] 2FLR 981 and Lambert v Lambert [2002] EWCA Civ 1685, have, however, clarified the interpretation of the s25 factors, and led to changes in the way the courts and family lawyers go about resolving the financial aspects of marriage breakdown.

Before the House of Lords’ decision in White, family lawyers advised according to the concept of ‘reasonable requirements.’ This meant, in big money cases, the wife received her capital sum, sufficient for her housing and other capital needs. Means permitting, she has also received her ‘Duxbury’ capital sum to provide her with income for the rest of her life. Despite her contribution, either financially or in the home (even during a long marriage) the husband retained the bulk of the assets.

Conversely, in smaller money cases, particularly where there were children, the earning spouse (generally the husband) could often find himself transferring the majority of capital to the wife (if it was required for her and the children’s housing needs) together with a lifelong maintenance order for the wife.

White held there was nothing in the words of the MCA which determined that an applicant’s claim should merely satisfy her reasonable requirements. Instead it clarified that the correct test is to divide assets fairly and to cross check that division against the yardstick of equality.

The flurry of cases in the courts since White has seen significantly greater awards to applicants than before. Mrs White did not receive a full 50 per cent of the assets, as the House of Lords held the Court of Appeal’s order that she would receive 40 per cent of the assets totalling £4.6m was fair, given the early financial contribution of the husband’s father. In big money cases, until Lambert, many husbands such as Mr Cowan (Cowan v Cowan [2001] EWCA Civ 679) sought to avoid parting with 50 per cent of assets, arguing that the exceptional contribution they had made (eg their particular business skill and acumen) had brought about the accumulation of the family assets and justified a departure from equality.

However, the Court of Appeal in Lambert rejected this approach, save in exceptional circumstances. Such an approach would encourage parties to look at the history of the marriage, and seek to knock down and reduce their respective contributions, rather than recognising that, as a partnership, the wife’s non-financial contribution is just as important as the breadwinning skills of the husband, as recorded in the wording of the MCA. There must be no discrimination between husbands and wives in their respective roles. Accordingly, Mrs Lambert received 50 per cent of the £20.2m available assets. As a result, it is said, in bigger money cases English family lawyers now barely need even a calculator, far less their legal skills. All they are required to do is to ascertain the assets and divide by two!

This is not the case. There is still fertile ground for argument in relation to departures from the 50 per cent division – eg if the parties have not enjoyed a long marriage (as in White and Lambert) where one spouse has inherited the bulk of the family assets, or when the parties have signed a pre-nuptial agreement.

While such decisions are expected to be developed in England, the position will remain very different from that of France. There, marriage contracts are recognised and fully enforceable, but deal only with the determination of the ownership of the assets.

As to cases where the assets do not exceed the parties’ reasonable needs, the English court must give first consideration to the children’s requirements.

In many cases this will continue to mean the wife receives more than 50 per cent of the assets although White has assisted the husband in seeking to retain capital at a future date when it is no longer required for the children (eg by a charge on the family home).

However, as far as maintenance is concerned (particularly for young children) maintenance throughout the parties’ joint lives, or until the wife remarries, is likely to continue to be ordered, depending on the circumstances. The English court will therefore continue to be seen as being ‘generous’ to wives and, until there is a harmonisation of rules in the EC regarding financial provision, the race to issue will continue.

Conclusion

While Brussels II has intended to harmonise jurisdiction throughout the EU, one cannot ignore the significant differences between its member states with regard to their laws, cultures and court rules which have a huge impact on how each country deals with the financial consequences arising upon marriage breakdown. English and French lawyers will therefore need to advise clients very carefully (but quickly) as to whether to issue proceedings in France or England.

Pre-Nuptial agreements

• One area which is likely to be further developed through judicial interpretation is where parties have signed a marriage contract, or pre- or post-nuptial contract. As the courts now strive to achieve equality, family lawyers believe the demand for marriage contracts will rise. However, as a jurisdiction which retains a wide discretion to deal with a couple’s finances following a divorce, marriage contracts (unlike in France) are not enforceable and binding on an English court.
• While they are not binding, there are ways to encourage the court to uphold the terms of such an agreement. Provided the parties have given full and frank financial disclosure of their respective positions before the marriage, each party has had the opportunity of obtaining independent legal advice on the contract, neither party is under duress to sign and the contract is not being signed too close to the wedding itself, such contracts will have considerable weight in any hearing, particularly if the marriage has been dissolved after a short duration and with no children. Even with the existence of children, the court has upheld the terms of pre-nuptial contracts.
  
• In K v K [2003] 1 FLR 120 the parties (who had only been married for approximately a year) had one child who lived with Mrs K following the separation. Mrs K (who was pregnant when she signed the agreement and was found to have entered into it willingly) was held to the terms of the agreement, and was provided with a £120,000 capital sum, notwithstanding that the husband was worth around £25m. However the court allowed her an extra sum, £1,200,000 for housing, to revert to Mr K when the child had completed his education. Orders for periodical payments were also made for the wife and child.