Brexit and the Impact on International Family Law, More Questions Than Answers

On June 22, 2016, the UK voted to exit the European Union, a development commonly known as

European flag jigsaw piece with British flag missing piece

the “Brexit.” This surprising turn of events left the global markets in decline, and the volatility has continued ever since. The question on many people’s mind is will Brexit cause a recession in the United States or globally? The biggest impact thus far has been on the pound, which has continued to decline, especially against the US dollar, falling to $1.32, its lowest level since the 1980’s. Moreover, pension values abroad and in the US may well drop, and it could take time for them to recover.

While we are all waiting with baited breath to see what will be the economic consequences of Brexit; Britain’s decision to leave the European Union could have legal ramifications for couples divorcing in the UK.  At the heart of the EU is the freedom of movement amongst member states, similar to the freedom US citizens have to move from state to state. The rules regarding jurisdiction in domestic cases are governed by a European Union regulation known as the Brussels ll bis. Brexit eliminates that freedom for English citizens working abroad in EU member countries, thereby raising questions as to what jurisdiction the parties will now be subject to.

Here, in the United States laws have been developed to address custody and support issues across state lines. This is accomplished by laws that determine proper jurisdiction, thus allowing parties residing in different states to be subject to one court. For example, when a child is involved, almost all states look to the Uniform Child Custody Jurisdiction and Enforcement Act to determine which state has jurisdiction, depending on the “home” state of the child. The EU’s requirements regarding jurisdiction are quite similar, and generally pertain to one’s residency or domicile.  Therefore, a spouse in the EU could hypothetically find themselves a national of one member country, but having to file where their habitual residence is located.

For now, nothing changes, as all trade and border agreements will remain in place until the exit process is completed. Recent projections are that the entire process will take years, not months. The UK still needs to pass legislation formalizing the referendum results, and then request an exit according to Article 50 of the Lisbon Treaty. It is unlikely this will happen before the UK installs a new prime minister (current Prime Minister David Cameron has said he plans to step down by October). Negotiations are then required to be completed within two years, unless the EU and UK agree to an extension. Once an agreement is reached, it will need a majority vote by the European Council, and likely approval from British Parliament.

Moving forward, it is likely the UK will need to enter into treaties with the EU to address disputes over choice of forum and choice of law issues. Only time will tell if the UK will decide to adopt the EU regulations as their own, or create new regulations to answer the jurisdictional questions that are sure to arise upon Brexit for couples divorcing.

 

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Anne Prenner Schmidt

About Anne Prenner Schmidt

Anne Prenner Schmidt uses her acute business acumen to guide individuals through the complex division of retirement plans regarding family law matters. Prior to joining Schiller DuCanto & Fleck in 2015, Anne focused her practice on compliance of employee benefit plans and executive compensation arrangements. She frequently advised clients on Internal Revenue Code, ERISA, HIPAA, COBRA, the Affordable Care Act and other federal statutes. Anne understands the importance of retirement plans in association with divorce and helps clients navigate the multifaceted issues involved.

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