This blog post has been contributed by Professor Robert Jago, Module Convenor for Family law.
In December 2024 the Law Commission published a scoping report on the laws governing financial provision upon divorce or dissolution of a civil partnership. Noting that the current law stems from the Matrimonial Causes Act 1973 and its equivalence in the Civil Partnership Act 2004, the Law Commission has concluded that the current law needs reform.
Baroness Deech (2024) has long argued that reform of the current law is essential due to its current ambiguity in practice. The law has evolved primarily through judicial decisions, diverging significantly from the original statute and the discretion exercised by judges has resulted in unpredictability and inconsistent rulings, complicating negotiations and increasing costs disproportionately. The removal of legal aid has left individuals of limited means without representation and with minimal guidance on achieving favourable outcomes.
The Divorce Financial Provision Bill, sponsored by Baroness Deech, has been introduced into the House of Lords over successive years, which aims to establish provisions akin to those found in Scottish law, The Bill proposes a fair starting point of equal division of all assets and pensions accumulated by the couple during their marriage. It includes provisions for short-term maintenance for an ex-spouse and longer-term support for children, along with the flexibility to retain the family home for the caregiver and children, as well as binding pre-nuptial agreements. The intention of the Bill is to promote mediation, minimise litigation and associated costs, and acknowledge the concept of equal partnership in marriage. As a Private Member’s bill, the aim has been to raise publicity around the issue and the Law Commission will now proceed with this new law reform project.
This is not the first time the Law Commission have considered this issue for reform. Back in 2014 a report was published which proposed that the law surrounding ‘financial needs’ should be clarified to ensure consistent application by courts and reinforce judicial best practices. The Law Commission suggested that guidance would provide unrepresented individuals with a clear understanding of their responsibilities and the goals of achieving financial independence through settlements. Additionally, it was proposed that tools should be developed to calculate ‘financial needs’ through non-statutory guidance which would offer a range of figures for negotiation between separating couples. The Law Commission also recommend introducing ‘qualifying nuptial agreements,’ which would be enforceable contracts allowing couples to establish binding financial arrangements. The report also included a draft Nuptial Agreements Bill for England and Wales. This did not lead to any additional legal reforms at that time.
The current scoping report identifies four models of reform. These are:
1. Codification: This model involves consolidating existing laws and judicial principles into a single, comprehensive code that clearly outlines the rules and guidelines for financial remedies in divorce and separation. The aim is to provide clarity and consistency in the application of the law.
2. “Codification-plus”: This approach builds on the codification model by not only consolidating existing laws but also incorporating additional principles or guidelines that reflect best practices and modern considerations in family law. This model aims to enhance the clarity and effectiveness of financial remedies.
3. Guided Discretion: In this model, the law would provide judges with a framework of guidelines to follow while still allowing them discretion in individual cases. Judges would have the flexibility to make decisions based on the specific circumstances of each case, guided by established principles.
4. Default Regime: This model sets out a default framework for financial remedies that would apply unless the parties agree otherwise. It provides a standard approach to financial settlements, ensuring that there are clear expectations while still allowing for negotiated agreements that may differ from the default terms.
In addition, the report also looks at other areas that may have the potential for reform, including the introduction of binding nuptial agreements, what consideration should be given, by courts, to the serious misconduct of separating parties, whether sufficient account is taken of pensions when dividing divorcing parties assets and whether there should be a time limit on how long a person can be required to pay maintenance for an ex-spouse.
The Law Commission now asks the Government whether it agrees that the law should be reformed and to choose the model for reform. From your own study of Family Law which model do you think would work best? There does appear to be universal concern as to how the current law works in practice, but those who are less committed to usurping the role of the courts and leaving the issue of finances for private individuals to resolve themselves may recall Lady Hale in Radmacher v Granatino [2010] UKSC 42 where she stated:
‘The object of an ante-nuptial agreement is to deny the economically weaker spouse the provision to which she- it is usually although by no means invariable she- would otherwise be entitled.’ [at 137]
Relying on freedom of contact is potentially more complicated within a marital setting and as Lady Hale confirms:
‘Perhaps, above all, some may think it permissible to contract out of the guiding principles of equality and non-discrimination within marriage, others may think this a retrograde step likely onto to benefit the strong at the expense of the weak.’ [at 135]
This does not mean it is not time for the law to get its finances in order. But it does perhaps suggest we should remain cautious at moving ahead too quickly in pursuit of simplicity and resolution without remembering that anything ‘ready-made’ may result in other unintended consequences.
References
Radmacher v Granatino [2010] UKSC 4
Financial remedies on divorce and dissolution. A scoping report. Law Commision
