Divorce litigation, child support, and Costco in Iceland

Conferences are fun because you get to talk to people from all over the world. Of course, at the International Conference on Shared Parenting 2017, the subject of the conversation tends to be divorce, custody, or child support litigation. Over coffee with Ragnheidur Gudrunardottir, the District Commissioner of Greater Reykjavik, I learned as much as I could about all things Icelandic.

I told her how shocked I had been at the prices when changing planes last summer on my way to the Royal Caribbean Baltic cruise. How could Icelanders afford it? Ms. Gudrunardottir agreed that the country might be due for another economic, um, adjustment. “Costco is coming to Iceland and 40,000 people signed up for memberships before they even opened,” said said. “That’s in a country with a total population not much over 300,000.” (story)

As in Denmark or Sweden, divorce can be obtained via an administrative process. It takes 2-3 months, but there may be an additional delay for the finalization due to a requirement that people spend “6 months separated from bed and table.” (Note that North Carolina uses similar terminology within their litigated process.) If parties can’t agree they may spend up to one year mediating. As a last resort, litigation is available and she estimated a maximum of $10,000 in legal fees might be spent, similar to what we heard about in Denmark.

Also as in Denmark, which formerly ruled Iceland as a dependency, child support seems to be calculated as a multiple of a basic amount. If an Icelander has custody of a child with a non-working co-parent, the government pays about $300 per month in “child support”. If the co-parent earns a good wage, the cashflow comes from the co-parent and is referred to as “alimony” even if the parents were never married. “What if you defrosted those rich bankers from 2007 and one of them was being tapped as a co-parent?” I asked. Ms. Gudrunardottir estimated that the alimony payment would be 3X the basic amount, or about $900/month ($10,800). This is a little more than the Danish maximum, much more than the Swedish maximum, and only a fraction of the potential revenue available in the U.S. (see California, for example). The after-tax (net) average monthly wage in Iceland is about ISK 370,000 (Wikipedia), $3740. Thus an Icelandic child support plaintiff would need to be collecting on a minimum of four children before being able to out-spend a median wage earner.

As was typical of conference attendees from Civil law and administrative divorce-oriented countries, Ms. Gudrunardottir didn’t say “Now that I have learned about the marvels of litigation and how Americans with lawyers and witnesses really get at the truth, I wish we had more litigation and Common law procedures in Iceland.” (And, correspondingly, people from the litigation-oriented societies (U.S., U.K., Australia) would talk about how litigation might be improved, almost never about how it could be replaced with an administrative procedure.)

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