Is London the divorce capital of the world? And does it matter?

It has long been claimed that London is the “divorce capital of the world”. The claims stem from the fact that our laws on divorce finances are believed to be more favourable to the financially weaker spouse, most often the wife, than in other jurisdictions.

This belief has led to many foreign wives seeking to have their financial claims on divorce heard by the courts here, in the hope that this will lead to them receiving larger settlements.

And the latest example of this is the case Potanina v Potanin, which has just been heard by the Court of Appeal in London.

The case concerned a Russian couple, who were married for approximately thirty years, before they were divorced by court order in Russia in 2014. Throughout the marriage they lived in Russia. They were not always wealthy, but they became “massively rich”, such that the husband is said to be one of the richest men in Russia.

Financial remedy proceedings took place in Russia, and the Russian court divided the “matrimonial property” equally between the parties, leaving the wife with some $41.5 million.

However, only those assets legally owned by one or both parties were included in that computation and division. Almost all of the wealth which the husband had accumulated during the marriage was/is held by various trusts and companies – the husband has acknowledged that he is indeed the ultimate beneficial owner of significant assets held in this way.

The wife argued that that those other assets should have been taken into account in the divorce settlement, claiming that she received less than 1% of the marital assets and had been denied an award of approximately $6 billion.

Unable to pursue her claim any further in the Russian courts, the wife turned to the courts of England and Wales, utilising a law here that allows financial claims to be made in our courts following a foreign divorce, provided that the claimant has some connection with this country.

Proceedings have been continuing in this country since 2018. Without going into detail, the wife was refused permission to pursue her application here. However, she appealed to the Court of Appeal, and the Court of Appeal has allowed the appeal, finding that the wife had a “real and meaningful” connection with this country, owning a property in London, and having been habitually resident here for at least a year.

The decision has led to renewed claims amongst family lawyers here that London is indeed the divorce capital of the world, attracting “divorce tourists” from around the globe. However, it should be noted that the husband may yet appeal the Court of Appeal decision, by taking the matter to the Supreme Court.

So, does it matter whether London is the “divorce capital of the world”?

For foreign wives seeking “fair” divorce settlements it may clearly matter – and after all, isn’t “fairness” something to be valued?

And for the London lawyers that these couples instruct, the work could obviously be extremely lucrative, providing a significant financial boost to the legal sector in this country.

But others argue that this kind of “divorce tourism” just adds to the workload of our already overstretched family courts, increasing the burden on judges, and leading to further delays in cases being heard.

In short, whether (and how) it matters rather depends upon your point of view.

You can read the full report of the Court of Appeal’s judgment in Potanina v Potanin here.

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