Brexit has had at least one silver lining. We will (post-Brexit) finally have some certainty as to how the UK is treated under Brussels IV.
Since Brussels IV, also known as the EU succession regulation, first came on the scene there has been debate as to whether the UK is a "member state" or a "third state". The ambiguity arose because the UK decided to opt out of the regulation, but the drafting of the regulation did not make clear whether a reference to a "member state" was a reference to an EU Member State or merely to those states that had opted in to Brussels IV.
The purpose of Brussels IV was to give clarity as to how a testator's estate should be administered and, so far as possible, harmonise the country of jurisdiction and the country governing the applicable law. This is where the distinction between a member state and a third state becomes important.
Under Article 4, the court of the deceased's habitual residence has jurisdiction by default in all succession matters. Under Article 21, the law of the deceased's habitual residence will be the applicable law.
However, under Article 22 it is possible to elect for the law of your nationality to apply as the applicable law. This can be either a member state or a third state. If that nationality is a member state under Brussels IV, then this will also be accepted by other member states as the jurisdiction if any of the requirements in Articles 5 – 7 are fulfilled, mainly that:
- The parties have agreed in writing that the court of nationality should have jurisdiction (and court of habitual residence has declined jurisdiction); or
- The court of habitual resident has exercised discretion to decline jurisdiction at the request of one of the parties, on the grounds that the court of nationality is better placed to decide on succession; or
- The parties have expressly accepted the jurisdiction of nationality.
Currently it is considered by many commentators that the UK is not a member state for these purposes, but a third state; this position will be certain post-Brexit. This means that when an election is made for the UK as the applicable law, jurisdiction will still lie with the country of habitual residence or another member state which is connected to the estate (see below re Article 10).
Article 34 adds further complexities. Where the applicable law is a third state (such as, post-Brexit, the UK), this will include that third state's private international laws insofar as they make a renvoi to either the law of a member state or to the law of another third state that would apply its own laws. Renvoi is excluded altogether in certain situations referenced in Article 34(2), which include if the applicable law is that chosen under an Article 22 election.
This means that renvoi will only come into play when the applicable law is that of a third state via habitual residence. If the deceased made a choice of law, either a third state or a member state, then renvoi will not apply as per the exclusion in Article 34(2). If the applicable law is that of a member state via habitual residence or choice of law, then renvoi also won't apply as it only comes into play under Article 34(1) when the applicable law is that of a third state.
Watch out for situations where the deceased was not habitually resident in a member state (e.g. lived in a post-Brexit UK), had not made an election, had any assets (of even de minimis value) in a member state, and was either a national of that member state or had been previously habitually resident in that state within the previous five years. Under Article 10, this member state would then have worldwide jurisdiction over the whole estate rather than the third state in which the deceased was habitually resident at the time of death.
So while we will now know how to treat the UK under Brussels IV post-Brexit, do not be lulled into a false sense of security – there are still plenty of issues to trip up an unwary testator.
Many EEA and Swiss citizens will be concerned about their immigration position in the UK and UK citizens and businesses will be concerned about their ability to live, work and do business in Europe. Furthermore, if EU free movement is restricted as a result of Brexit, we would expect to see wider changes in the UK immigration system.
There is no cause for immediate concern. The UK is still part of the EU. This means the right to free movement of people will continue to apply and this will remain the case until the UK formally leaves the EU, which could take more than 2 years. Furthermore, it may be that European citizens who are already living in the UK will be protected by transitional arrangements so they are not prejudiced by any future change in the law. The decision to leave the EU is unlikely to result in any immediate changes to the points based system for non-European migrants and in fact it may for the time being result in a freeze on significant change to the immigration system until the UK has reached agreement with the EU on free movement.
UK expats living in Europe will need to wait and see how their position is affected and we can obtain foreign advice where necessary.
We would hope that the UK will maintain a relatively liberal policy on immigration from the EU, even if more controls are introduced, and in fact there could be positive change to the immigration system as a whole, with policy less driven by the fear of vast influxes of immigrants, and more focussed on properly administering the system and encouraging the immigrants the country needs to support its future prosperity. However it should be noted that recent pronouncements by the Home Secretary and Prime Minister are discouraging as they have emphasised a continued desire to dramatically reduce the number of immigrants.
We recommend that anyone who is relying on their European citizenship (or that of their family member) reviews their position and considers applying for a residence certificate or residence card if they have not already, or for indefinite leave to remain or citizenship if they are eligible.
Those who are planning to come to the UK in the future on the basis of EEA or Swiss citizenship, or to have access to Europe by acquiring citizenship in the UK, should review their options.
UK citizens who are eligible for EU citizenship may wish to consider applying for this (although there may be no urgency).
Brexit and English Family Law
As with most areas of law, the effect of Brexit on English family law is largely unknown. Theresa May has of course promised a 'Great Repeal Bill' enshrining existing EU legislation into UK law, and family lawyers suspect any deviation from the existing rules will be a very low priority for UK negotiators.
In many ways, this will not significantly impact family law. Family law legislation from the EU has largely avoided the question of how family disputes should be decided and focused primarily on where they should be heard. So, for example, all EU countries work to the same list of qualifying criteria for deciding which member states are entitled to hear a divorce application - Brussels IIA not only sets out those criteria but the rule that, if there are two qualifying jurisdictions, the first to be seised will automatically have jurisdiction.
It would be odd, post-Brexit, to find ourselves in a position where the English court is forced to cede jurisdiction to an EU state which was first in time in circumstances where that country would not be obliged to do the same for us. Informal polling of English family lawyers shows strong support for the UK to abandon the first in time approach and revert to the "forum conveniens" approach used for all non-EU jurisdiction disputes. While this will avoid the need for jurisdiction races, it will not necessarily be a good thing as, with huge disparities between different countries' matrimonial regimes, wealthy parties risk spending huge sums fighting to secure their first choice jurisdiction. This is most recently demonstrated in the case of Peng v Chai (where the husband is thought to be worth over £440m) in which over £5m is said to have been spent arguing about whether the divorce should be heard in England or Malaysia.
Originally published 28 November 2016
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