Mind the Split: London is the best city to be a divorce lawyer
London’s reputation as the divorce capital of the world looks set to grow after a recent court ruling paved the way for more foreign cases to be heard in the city.
Litigation-focused law firm Stewarts has expanded its high-net-worth practice to meet rising demand for complex, high-value divorce work.
High-profile, high-net-worth divorces collect media headlines like bees to a honey pot. There is no denying it, people love reading about the marriage breakups of the wealthy and the well-known.
But it is the ex-wives of Russian oligarchs that have kept lawyers in London busy, with a loyalty card to the Family List of the High Court.
Not surprisingly, the English legal system has a reputation for being willing to scrutinise global wealth structures while offering more generous financial settlements. “England has been a magnet for some time. It’s the best city in the world to be a divorce lawyer, because you get all these international cases,” Stephen Foster, head of divorce and family at Stewarts, told Morning Wire.
Recently, its ability to hear divorce cases was expanded following a ruling last month in the case against the former Prime Minister of Russia, Vladimir Potanin. The ruling by the Court of Appeal essentially opens the door for spouses to seek a financial claim in England after a foreign divorce.
However, at the same time, the president of the Family Court, Sir Andrew McFarlane, announced that the time allocated in financial cases was being reduced to prioritise public law cases.
“There is a paradox in that the courts are overloaded, yet that case has potentially opened the floodgates to more cases coming in,” Foster said.
He explained: “In practice, that means there will be last-minute cancellation of shorter hearings, and the court is double-listing on longer hearings.”
He noted that costs and stress will rise for individuals undergoing this process.
Arbitration rising as backlog mounts
“The decision in the Potanin case reinforces that we are a magnet for foreign divorces, but the court infrastructure can’t cope with it,” Foster explained.
As a result, he highlighted that the Arbitration process is becoming increasingly favourable to clients. “Arbitration is becoming a bit like a private hospital versus the NHS,” he added.
He pointed to research on Stewart’s clients, which found that 76 per cent went through the court system. Of this figure, 63 per cent found the process stressful, and a further 36 per cent found it slow.
“Stress and slowness are going to increase if the court now has less time for private law cases,” he added. As a result, he predicts that high asset cases and private insurance law cases will increasingly look to arbitration as the new norm.
The law firm is already working on that trend, as it recently hired a silk, Alex Verdan KC, from barrister set 4PB to head up its specialist children’s team and create a “one-stop shop advocacy offering for its ultra high net worth and high-profile clients”.
It is not often that barristers work at a law firm. “For hundreds of years, we had a split profession in England between solicitors and barristers, and we have a straightforward but radical idea of the benefits of bringing everything under one roof,” Foster stated.
Clear growth trajectory
Stewarts has been on a rapid expansion path, as Foster explained, “A few years ago, we called the market differently than other firms, because we concluded that the days of divorce being dominated by a handful of star individuals were coming to an end.”
“The world was changing, cases were getting bigger, and the globalisation and movement of money and people meant that you needed a team of lawyers on a big asset case,” he added.
As a result, the firm invested in people. Currently, the divorce and family team consists of 15 partners and 26 associates, from financial matters to children’s disputes and pre-nuptial agreements.
And despite its focus on ultra-high net worth and big-money cases, it also honed in on an “increasingly growing base of professional clients”.
These were individuals with substantial salaries, including partners in financial services, law, accountancy, management, and consultancy firms.
“We opened the professional practices group, which has grown exponentially as it tripled in the last three years. We now have three partners and six associates in that group, and that’s dealing with professional people,” he explained.
Sam Longworth was the lead partner at Stewarts for Clive Standish, the former chief financial officer of Swiss bank UBS, in his high-profile divorce battle with his ex-wife. Stewarts was successful for Standish, as the court rejected, in July, an appeal by his ex-wife over £80m of assets linked to a tax planning scheme.
Following the changes in the tax regime for non-doms by the Labour government, there has been considerable coverage on the exodus of non-doms from London as a result.
Stewarts has seen “a significant uptick in leave to remove application” as a result. Unless there is an agreement in place, you can’t move a child from the jurisdiction (England or Wales) without an agreement.
However, Foster added, “the exodus of non-dons is being offset partly by an influx of Americans.”
“We’ve had a significant number of inquiries about Americans who are very happily married, but they want to move here. They want to understand when they move from Silicon Valley to Notting Hill or the Cotswolds, what the position would be over here for them”.
“One of the attractions is the ability to arbitrate here and not necessarily [in the US],” he added.
As court delays persist, arbitration is emerging as a solution for resolving divorces quickly. Compared to the High Court, these cases are significantly more private, which may lead to a decrease in the number of notable divorces making headlines.