The Financial Consequences of Divorce in a European Perspective

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The Financial Consequences of Divorce in a European Perspective Unedited book chapter, published in Scherpe (ed.), European Family Law, Vol. III, Edward Elgar Publishing 2016 - http://www.e-elgar.com/shop/european-family-law The Financial Consequences of Divorce in a European Perspective Jens M. Scherpe 1. INTRODUCTION AND OVERVIEW ............................................................................................................. 2 2. THE DEFAULT RULES ON FINANCIAL CONSEQUENCES OF DIVORCE.......................................................... 3 2.1. COMMUNITY OF PROPERTY JURISDICTIONS...................................................................................................... 4 2.1.1. Universal Community of Property ................................................................................................ 4 2.1.2. Community of Acquests ................................................................................................................ 5 2.2. SEPARATION OF PROPERTY/PARTICIPATION SYSTEMS ........................................................................................ 8 2.2.1. Deferred Community of Property ................................................................................................. 9 2.2.2. Statutory Compensation Jurisdictions ........................................................................................ 10 2.2.2.1. Community of Accrued Gains (Zugewinngemeinschaft) .............................................................................. 11 2.2.2.2. Participation in Acquests .............................................................................................................................. 12 2.2.3. The Hybrid System of Austria – Rule-based discretion ............................................................... 14 2.3. JURISDICTIONS WITHOUT A MATRIMONIAL PROPERTY REGIME ......................................................................... 16 2.3.1. England and Wales ..................................................................................................................... 18 2.3.2. Ireland ........................................................................................................................................ 22 2.4. FRANCO-GERMAN AGREEMENT ON AN OPTIONAL MATRIMONIAL PROPERTY REGIME OF A COMMUNITY OF ACCRUED GAINS 25 2.5. PRINCIPLES OF EUROPEAN FAMILY LAW REGARDING PROPERTY RELATIONS BETWEEN SPOUSES .............................. 29 2.5.1. General Rights and Duties .................................................................................................................. 30 2.5.2. The Participation in Acquisitions Regime ........................................................................................... 30 2.5.3. The Community of Acquisitions Regime ............................................................................................. 32 2.6. COMPARISON – A QUEST FOR FAIRNESS? ...................................................................................................... 35 2.6.1 Comparing the incomparable? ....................................................................................................... 35 2.6.2 Different paths to fairness .............................................................................................................. 36 2.6.2.1 Different views on equality and fairness ................................................................................................ 36 2.6.2.2 Discretion as a means to an end ............................................................................................................ 38 2.6.2.3 Holistic view or separate remedies ........................................................................................................ 38 2.6.3 Similar perceptions of fairness ........................................................................................................ 39 2.6.3.1 Sharing ................................................................................................................................................... 40 2.6.3.2 Need ....................................................................................................................................................... 41 2.6.3.3 Compensation ........................................................................................................................................ 42 3. MARITAL AGREEMENTS ......................................................................................................................... 42 3.1. GENERAL REMARKS ................................................................................................................................... 42 3.1.1. Terminology ....................................................................................................................................... 42 3.1.2. Fundamental differences in the function of marital agreements ...................................................... 43 3.2. LEGAL EVALUATION OF MARITAL AGREEMENTS AT THE TIME OF CONCLUSION ....................................................... 45 3.2.1. Marital Agreements are ‘special’ ....................................................................................................... 45 3.2.2. Formal requirements and legal advice ............................................................................................... 46 3.2.3. Disclosure ........................................................................................................................................... 47 3.2.4 Time requirement ................................................................................................................................ 48 3.3. LEGAL EVALUATION OF MARITAL AGREEMENTS AT THE TIME THEY ARE INVOKED .................................................... 49 3.3.1. The substantive ‘fairness challenge’ to marital agreements ............................................................. 49 3.3.2. Fairness in marital agreements .......................................................................................................... 50 3.4. FINAL COMPARISON – PROTECTION OF AUTONOMY AND PROTECTION FROM AUTONOMY ..................................... 52 4. SUMMARY – IS THERE A EUROPEAN REGIME FOR THE FINANCIAL CONSEQUENCES OF DIVORCE? ........ 53 Unedited book chapter, published in Scherpe (ed.), European Family Law, Vol. III, Edward Elgar Publishing 2016 - http://www.e-elgar.com/shop/european-family-law RECOMMENDATIONS FOR FURTHER READING .............................................................................................. 55 1. Introduction and overview This chapter deals with the substantive law1 of the financial consequences of divorce.2 These consequences can (but do not have to) include a division of property, certain periodical3 or lump sum payments, a sharing or division of pension rights (and similar) and the allocation of the use of the marital home and other assets. No ‘top-down’ European Family Law exists in relation to any of these,4 as the European Union has no competence to regulate such matters, and no cases on the financial consequences of divorce have yet been decided by the European Court of Human. This chapter therefore is a purely comparative one. The financial consequences of divorce are regulated in very different ways amongst the European jurisdictions. Even the very basic understanding of the nature and structure of the financial consequences of divorce appears to be fundamentally different. The most obvious contrast here is between the common law jurisdictions of England and Wales, Northern Ireland and Ireland5 and the continental European jurisdictions of the civilian tradition.6 Only the latter know statutory matrimonial property regimes which play a pivotal role in the financial consequences of divorce. Without doubt, the division/allocation of (matrimonial and other) property upon divorce is also central to the common law jurisdictions but it is embedded in a wholly different system and approach; it is part of a holistic exercise which considers all the financial consequences of divorce at the same time. By contrast, jurisdictions with a matrimonial property regime (irrespective of whether the regime applies by default or was chosen by the spouses) separate the various consequences outlined above into different remedies, usually beginning with a division of (matrimonial) property. The financial 1 For Private International Law instruments see the chapter by Dieter Martiny in this volume. 2 Much and, in some cases, most or even all of what is described and analysed in this chapter also applies to certain other legal regimes like the civil partnership of the jurisdictions of the United Kingdom or the registered partnerships of the Netherlands and the Nordic Countries. 3 Mostly so-called spousal maintenance, which often also is referred to as alimony. In the following the term maintenance will be used. 4 For an overview of international instruments touching this area see K Boele-Woelki/F. Ferrand/C. González Beilfuss/M. Jänterä-Jareborg, N. Lowe, D. Martiny and W. Pintens, Principles of European Family Law Regarding Property Relations Between Spouses (Intersentia 2013), pp. 18-24. 5 On which see 2.3. below. 6 On which see 2.1. and 2.2. below. Unedited book chapter, published in Scherpe (ed.), European Family Law, Vol. III, Edward Elgar Publishing 2016 - http://www.e-elgar.com/shop/european-family-law consequences of divorce in these jurisdictions is therefore commonly said to rest on several ‘pillars’,7 whereas
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