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Could Hong Kong Be The Next Divorce Hotspot?

Date: November 22nd, 2010 - Written by: Brookman Solicitors

The Times reports on a recent divorce judgement in Hong Kong that could see future financial settlements in the jurisdiction divided equally.

Until last week, divorce settlements in Hong Kong were typically decided on the basis that the wealthier partner would keep any surplus after the weaker partner’s financial needs had been met. This meant that the weaker partner – often the wife – might receive a much lesser proportion of the finances.

However, last week, a divorce judgement by Hong Kong’s Court of Final Appeal changed the ‘starting point’ at which settlements are now likely to be considered.  It is now probable that many settlements will work to the principle of ‘equal sharing’ as the starting point in deciding how to divide surplus assets.  This may now prompt the wealthier members of the Hong Kong community to protect their financial assets.

The Court of Appeal’s reasoning followed the recent trend of English case law, which has established that in a medium length marriage, and in the absence of special factors, the starting point for a Judge is to consider equality.

Pre-nuptial agreements

In recent years, Hong Kong has seen an increase in the number of couples opting for a pre-nuptial agreement before tying the knot.  Many have attributed this trend to couples in Hong Kong getting married later and also the general upward trend in divorce rates in the city (in 2009 20,000 couples petitioned for divorce compared to 13,500 in 2001).

This latest ruling is expected to boost the number of pre-nuptial agreements even further.  However, there is also the potential for the ruling to influence the overall number of divorces in Hong Kong.  Financially weaker spouses that are in unhappy marriages may see the potential for a greater financial settlement and may therefore take their opportunity to divorce.

The practicalities of divorce in Hong Kong

Whilst this latest ruling will impact upon the way in which divorce settlements are considered, it does not guarantee the weaker partner will receive half of the assets.  It can be very difficult to establish an individual’s true wealth in Hong Kong and once a settlement is awarded, it can then be difficult to enforce it.

In addition it becomes even more important for both parties in a failing marriage – where there are links to Hong Kong – to closely consider whether there are any other jurisdictions available to them.

If you have any questions about international divorce or prenuptial agreements, please contact Brookman Solicitors for advice.

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