Divorce, pension sharing and the Jersey courts

A recent High Court case shows how important it is to consider what the courts of different jurisdictions can do when a couple divorces. 

The background details to this case is that after a long marriage, the husband left the family home in Berkshire and set up home with his new partner in Jersey before immediately commencing divorce proceedings there. 

1.         Why is that a problem and isn’t Jersey part of the United Kingdom anyway?

Legal jurisdictions can be funny things. For example, if you live in Berkshire your divorce is covered by the laws of ‘England and Wales’. Scotland has its own separate legal jurisdiction. So does Northern Ireland. So does Jersey. 

2.         What was the difficulty in the divorce taking place in Jersey?

The courts of Jersey have all the same powers as the courts of England and Wales, save for one, in this vital difference. The Jersey courts cannot make a pension sharing order. 

Briefly, a pension sharing order takes some of one spouse’s pension and puts it into an entirely separate pension pot for the other. They then have independent pension funds as they head towards retirement. Pension sharing has been allowed in the courts of England and Wales since 2000 and is usually a vital part of a divorce case. 

3.         Without pension sharing, what happened instead?

Both parties fully engaged in the divorce proceedings in Jersey and reached an agreement which gave the wife 55% of the value of the family home and the husband 45%. The wife made it clear to her Jersey solicitors she was not happy with the deal but nevertheless she signed it off and the court approved it. 

4.         Events following the divorce in Jersey

It seems clear that the wife had already decided to make an application to the English and Welsh courts under a little known provision which enables a spouse to make a financial application in the English courts following a ‘foreign divorce’. It was argued on her behalf that since Jersey had never adopted the pension sharing legislation, she was therefore financially disadvantaged and the English courts should make a pension sharing order to compensate her. 

5.         Did the argument succeed?

The wife’s argument failed. There was a basic point that her lawyers appear to have overlooked. 

In the relevant legislation, ‘overseas country’ is defined as a country or territory outside the ‘British Islands’ and British Islands is defined as including, amongst others, Jersey. 

It was suggested on her behalf that when this definition was drawn up, pension sharing had not come into effect in any of the courts. The fact that it was now allowed in England but not in Jersey means that the wife would suffer a ‘serious injustice’ which is what was necessary to establish before the court allowed her to go ahead with her application. 

6.         What did the court rule?

The court ruled against the wife, dismissed her application and ordered her to pay £11,000 in costs (to be deducted from her share of the proceeds of sale of the house).

7.         What should the wife have done?

It is always easy to be wise after the event. Strategically, I suspect it would have been far better for her to argue in Jersey that in the absence of pension sharing, she should receive a larger share of the property. 

The Jersey courts are allowed to take into account all assets that the parties have at their disposal and just because pension sharing is not available, that does not mean the court cannot take into account the existence of a pension. As it was, the unfortunate wife lost her opportunity to share in her husband’s much more valuable pension.  I cannot help feeling that anyone reading the judgment would think she has been treated unfairly by the system. 

The case demonstrates the need to get independent legal advice at an early stage so as to best consider the strategic considerations that can be of vital importance in any divorce. 

If you would like any advice please contact our specialist divorce lawyers for a free, no obligation 15 minute conversation to discuss your own situation.  

I am based in our Colchester office and can be contacted on 01206 217320 or [email protected].