Henry Brookman identifies some of the potential pitfalls in a recent European Commission proposal. Published in Times Online.
The European Commission has recently published a proposal relating to EU-wide rules on property rights for married couples. Unfortunately, the proposal appears not to take into consideration the real and practical situations faced by couples in England and Wales.
The proposed regulation aims to create a ‘uniform’ set of rules across EU countries relating to married couples’ property. This more standardised approach may appear a logical approach, but is actually littered with potential pitfalls for UK couples.
To some extent, the proposal seems to be remedying an issue that does not actually affect married transnational couples who live in England or Wales. The proposal states that a large number of transnational couples face difficulties both in the daily management of their property and in the division of that property if the couple separate. But in Brookman’s experience of transnational couples living in England or Wales, this is not the case. Couples in a functioning marriage rarely have problems managing their property. Instead, problems occur in relation to recognising and enforcing divorce settlements.
The European Commission’s proposal goes on to say that the only way to address the issues it raises (however questionable those issue may be in reality), is to have “common rules on matrimonial property regimes” across countries. But in English law there is no such thing as a matrimonial property regime.
‘How do UK marriages differ from those in wider Europe’
In most continental jurisdictions, couples at the time of marriage choose their ‘matrimonial property regime’, i.e. whether they will hold their property as separate property, hold the property jointly or make tailor made arrangements. This is simply not how it works in England and Wales – here a person owns what they own and they can deal with it how they wish.
Under the new regulation, UK couples would have to choose their matrimonial property regime. We would then face the prospect of spouses in England and Wales having to make a conscious decision and enter into written agreements at various points throughout their marital life to state what ‘marital regime’ applies to their property. Then they will be stuck with a very rigid set of rules governing their divorce.
How could the proposal affect divorcing couples in the UK?
Unsurprisingly, these new proposals could have far reaching financial consequences for divorcing parties in England and Wales. The most startling example of the impact would be where the law of the country that a couple first lived in would govern their divorce settlement: conceivably an English couple who first lived in Cyprus but returned to England after some years, may find that Cypriot law would still govern their divorce. One party could end up with nothing.
These proposals reveal a woeful misunderstanding of the marital system in England and Wales. The European Commission has put forward concepts which simply do not make sense in jurisdictions where there is no such thing as a marital regime before a divorce. This is a fundamental mistake.
One hopes that the UK will reject the proposed regulation. Meanwhile though, we would strongly advise that couples with an international element to their property consider whether a nuptial agreement may be useful to protect their property rights.
If you would like to know more about this issue please contact Brookman Solicitors for more information.