After weeks of speculation, Tom Cruise and Katie Holmes have reached an out-of-court settlement in their divorce, and Cruise has given up his battle for residence of their six year old daughter, Suri.
It was anticipated that the couple, who had been married for five years and thought to be worth a total of $275 million, would enter into a jurisdiction race in the hope of being able to issue proceedings in the state whose laws would be more favourable to their case.
In the US each state has its own divorce laws. The Cruise/Holmes jurisdiction race concerned two key issues, those of privacy and custody (or “residence” in England and Wales).
In the state of New York, files can be sealed and public access to divorce proceedings is limited, but in California, the privacy rights are not quite so stringent.
In terms of decisions regarding children, in New York, the courts are more willing to award sole custody, believing that a separated couple cannot make joint decisions regarding what is in a child’s best interests. In California, however, it is more likely that the court will award joint custody. The parent with sole custody will be able to make all the key decisions in a child’s life (without needing to consult the other parent).
Keen to keep her divorce out of the limelight, and to prevent the public having access to proceedings, as well as wanting to protect her daughter from Cruise’s scientology beliefs, Holmes quickly realised that issuing proceedings in New York would work in her favour.
Where divorce proceedings should be issued will depend upon the priorities of each party and the ability of that jurisdiction to make the orders they are seeking. The EU directive Brussels II can give spouses in Europe the choice of issuing in more than one possible jurisdiction. Each EU country has its own separate divorce law, and the choice of country that handles the divorce could substantially impact upon the financial settlement that will be received. For example, under English law, where there has been a long marriage, it is usual for there to be a joint lives maintenance obligation, which will only be terminated on the receiving spouse’s remarriage, or either party’s death. This is in contrast to Scotland, where spousal maintenance usually only lasts for around three years.
Under Brussels II, the “golden rule” is that the first party to issue in the EU will seize the jurisdiction of choice. Historically, England and Wales has been the jurisdiction of choice for wives seeking a generous financial settlement and has led to London being dubbed the “divorce capital of the world”.
There are, however, additional factors that must be considered to ensure that a spouse is eligible to issue proceedings in a certain jurisdiction. Holmes, for example, would have had to prove that she had been a resident in New York City, and intended to make to her fixed and permanent abode, in order for the court to be satisfied that it had jurisdiction to deal with her divorce. For England and Wales to have jurisdiction, certain conditions must be met in terms of domicile and residence.
One way of preventing so-called “forum shopping” upon separation is to pre-empt this by determining from the outset of the marriage which country should have jurisdiction. This is something that can be included in a premarital agreement.
If you are uncertain which jurisdiction you should issue proceedings in, or there are potentially two or more jurisdictions involved in your circumstances, it is important to seek legal advice to determine how best to proceed.
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at August 2012. Specific advice should be sought for specific cases; we cannot be held responsible for any action (or decision not to take action) made in reliance upon the content of this publication.
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