The Law Commission has decided to review the laws around financial needs and the division of “non-matrimonial property” to make things easier for couples who are legally ending their marriage or civil partnership.
“Increasingly for couples who are not receiving legal advice, they need to know what their liabilities are and what their rights are,” explains Professor Elizabeth Cooke, the Law Commissioner responsible for this area of law reform.
The new consultation focuses on two specific aspects of the law relating to financial provision on divorce - to what extent one spouse should be required to meet the other’s financial needs, what exactly is meant by needs, and what happens to property that one of the partners owned before the relationship, or acquired during the course of it.
Last year’s consultation on pre-nups led the Commission to widen its inquiries into the law around divorce.
“We started a project on pre-nups and we consulted on that in 2011,” Prof Cooke says.
“We had some very useful responses, but one of the things that came out was a very strong view that looking at this on its own would not be enough.
“The law relating to financial provision in divorce or dissolution of a civil partnership is old, it dates from the 1973 statute, which was a consolidation of what was done in 1969, the last time we had divorce reform.
“The courts have interpreted the statute, but it really gives them no idea of what to do, it gives them things to think about and the courts have worked hard to interpret it.
“You look round at this landscape with pre-nups on the stage as well and you think it is really complex.”
In 2000 the House of Lords ruled that there should be a principle of sharing family property.
“At that point virtually every country in Europe and across the common law world had the principle that you share family property,” says Prof Cooke.
Despite the media focus on high-wealth divorces, the consultation aims to help more modest families.
“Multi-million pound payouts are very rare and multi-million pound families are very rare, but where the family assets are very considerable the sharing principle applies and nothing we are going to say will impinge on that.”
The consultation will look at financial need and the concept that spouses are responsible for each other’s needs after divorce or dissolution.
“How much responsibility is there and how long for?” asks Prof Cooke.
“The law does not tell us and a lot of the practitioners we spoke to said this needs clarification.”
The concept of the sharing principle triggered the development of the concept of non-matrimonial property.
This also needs clarification.
“Inherited property or property inherited before the marriage may not be shared, that is not always the case,” says Prof Cooke.
“The courts give different weights to the origins of the property depending on the length of the marriage, whether there has been cohabitation. There is also considerable confusion if the property changes, meaning it is sold and replaced, or invested in, or if one of the spouses has worked on it.
“These very awkward questions are now coming before the courts and we felt it was worth looking at.”
The consultation is not aimed at “reducing or increasing the level of payment,” she adds.
“In a year’s time we intend to end up with a report that deals with financial need, non-matrimonial property and pre-nups.
“We are looking for something that is much more useful to the ordinary case the people who are trying to make ends meet.”
After the consultation has ended the Commission will prepare a draft Bill. The Government will then decide whether new legislation is needed.
One option is to remove the case-by-case deliberations by judges and introduce a more formulaic calculation. That would need more work, and also take into consideration the nature of financial need.
“Are we trying to compensate people for what they lost? Or give them time and support for a period to support transition. How long is that transition supposed to be?” asks Prof Cooke.
“Nobody likes being dependent, nobody likes having to support someone with whom they do not have a relationship, but on the other hand that move to independence after divorce or dissolution can take a very long time and the law needs to acknowledge that.”