It may be no surprise that London is often considered the divorce capital of the world. For some of the world’s richest couples it has become the place of choice to get a divorce, meaning the phenomenon of so-called ‘divorce tourism’ is on the rise.
Good For Business
In November 2012, London Mayor Boris Johnson encouraged those seeking a divorce to choose London, ‘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. Because London cleaners will be grateful for your business.’
Reinforcing this business-like view of divorce is the latest Times Rich List with its newest category of wealth ‘Richest Divorcees’.
London’s popularity for divorcing couples has been put down to the principles arising from the case of White v White . Settlements must be judged against ‘the yardstick of equality’. This does not necessarily mean that a 50/50 split will be appropriate but it was made clear in the case that a home-maker’s contribution may be considered equal to that of the money-earner.
In ‘big-money’ cases particularly, the courts are less concerned about meeting an applicant’s basic needs than ensuring a fair apportionment of the family’s wealth. As there is no mathematical formula used to calculate this, judges have a high level of discretion. This has contributed to the perception that English divorce laws are more generous than elsewhere.
London’s reputation has been further fuelled by high-profile divorce cases such as McCartney v Mills McCartney . Famously, Heather Mills was awarded £24.3 million following her divorce from Sir Paul McCartney. Although the court did not feel that the compensation principle applied, a large award was justified on the basis of a generous interpretation of the applicant’s needs. This is because the court must have regard to certain factors including the standard of living enjoyed by the couple prior to the breakdown of the marriage. As a result, Heather Mills’ income needs were assessed as £600,000 per year.
A string of other similarly high-profile and generous settlements seem to have cemented London’s status. For example, when Madonna divorced Guy Ritchie in London, Ritchie left the marriage with a fifth of the singer’s total estimated net worth.
Furthermore, following the case of Radmacher v Granatino , couples that have signed a pre-nuptial agreement can have a degree of confidence that it will be taken into account.
London’s reputation as the divorce capital of the world may now be under threat from Hong Kong. It is claimed that the partner who does not own the assets is likely to receive a better pay-out in Hong Kong than anywhere else in the world due to the difference in what Hong Kong courts consider to be a high standard of living. Lawyers may now tend to advise the poorer spouse to divorce in Hong Kong even if they have the option to divorce in London.
The idea of the poorer spouse is relative though; whether choosing London or Hong Kong, ‘divorce tourism’ is an option open only to the very wealthiest couples with an international lifestyle.