The need for review of financial provision following divorce or dissolution

The need for review of financial provision following divorce or dissolution

No-fault divorce will be here in less than a week. Only time will tell if this law change will yield hoped-for benefits of reducing negative emotions within the separation process, making things generally simpler and less financially costly.

The minimum timeframe for no-fault divorce is 26 weeks from start to finish. So, nobody will have experience of the new process from start to finish before the autumn of 2022 at the very earliest. Until then, any comment on whether the process is achieving its aims can be no more than incomplete anecdotal overview.

Notwithstanding the clear information void, heavy-weight attention now seems to be focused on general criticism of the existing law governing financial provision in this area. The suggestion seems to be that unless that law is also now reviewed (and changed in a big way), no fault divorce will achieve nothing and have been a waste of time. Can this be right?

It is helpful to look at how everything fits together from a legal point of view, and it’s important to understand that divorce, and financial provision, are two separate issues.

Will removing the ‘blame’ help?  

At the most basic level a divorce, or dissolution of civil partnership, just changes people’s marital status.

Up until now, though, without separation exceeding two years, it hasn’t been possible to obtain that change to marital status unless one person blamed the other for something. Thus in many, many divorces, the very first point to be raised has been whose fault it is that the relationship isn’t working. Perhaps it’s not surprising then that a generally negative tone is set.

From next week not only will it not be necessary to attribute blame within court documents, it will not be possible.

This should simplify the legal paperwork but can this alone be reasonably expected to achieve wholesale change? The sad truth is that many relationships break down because one person perceives the other to be at fault: can people resist the urge to rehearse negative feelings in private discussions, or even solicitors’ correspondence, simply because it’s not a legal requirement to do so?

Even if the answer was ’yes‘, there are other factors which can cause or prolong negative emotion. This is where financial provision starts to link in with divorce - fear of the unknown, or uncertainty about where a person might live and how they might afford that, can cause problems in even the most amicable of splits. It has been said, by a titled solicitor to the rich and famous that ’…no one can predict the outcome…accurately‘, and implied that the current law is not clear or explicit.

Are formulas the answer?

Certainly, the current law is not precise. It does not use calculators or formulae to assess and compute faceless numbers about people’s lives.

The law operates by considering various factors including what assets are available to meet needs, the age of the parties, standard of living, who contributed what, any disabilities and (in very, very few cases) any abhorrent conduct. This qualitative approach combined with judicial discretion enables the law to flex and adapt according not only to the individual circumstances, but also societal values of any given time. The ultimate aim is, in fact, fairness, rather than express clarity of law.  Albeit this can be a difficult landscape to navigate, family lawyers are adept at helping people find the right path. To an extent any alleged vagueness or inconsistency in the law is part and parcel of our common law system.

The position is very different in civil law jurisdictions, such as those in place in many European countries. The law tends to be a lot clearer there because various property regimes apply, stipulating the financial relationship between the parties during and after the marriage. By and large, however, those regimes bypass the concept of financial ’need’ which is central to most orders and settlements here. For such a regime to apply here, where concepts of ’fairness’ and ’need’ often go hand in hand, would cause real problems.  

The calls for reform, specifically the Divorce (Financial Provision) Bill which essentially seek a ‘one size fits all’ approach to matrimonial finance matters, could be interpreted as a call for law far more in line with that of our European neighbours. The Bill, for example, proposes equal division of matrimonial property and a five-year limit to spousal maintenance save for in circumstances of extreme financial hardship. Of this Lady Hale has said ’I fear that it assumes an equality between spouses which is simply not there in many, perhaps most, cases’. I agree.

Conclusions

It is already possible to seize a high degree of certainty if that is what people want, by using a pre or post nuptial agreement. As long ago as 2014, the Law Commission made recommendations about the need for properly made agreements of this nature to be binding on the court as well as the parties. Those recommendations were broadly welcomed by family lawyers, and the bill includes similar provisions which will be just as well received.

As for whether the Ministry of Justice should feel itself under significant pressure to go further by reviewing the current system and changing the law to make it clear and explicit akin to a matrimonial property regime? No. That type of rigidity, and the framework proposed in the Divorce (Financial Provision) Bill, does not accord with our very English (and Welsh) sense of fairness.

That is not to say that the current law and systems being used are necessarily working, or working as well as they might. Where people cannot agree financial outcomes between themselves, they need advice about the legal position and the approaches which can be taken. Mediation can be a very helpful and cost-effective way forward and is often all people need to reach a resolution. Where that doesn’t work though other routes need to be explored including Court. Aside from the relationship breakdown itself, a lot of the stress, unhappiness and heartache in this process is due to delays and difficulty within the hugely underfunded Court system. It is that process where urgent review, reform and funding could deliver the most obvious results and improvements.

The current financial provision law is nearly 50 years old. Of course it’s time for an update and perhaps something more than that. But process and procedure is more responsible than the law for aggravating the very human condition of sadness and concern which naturally occurs when relationships end.

Graham Coy is a partner at

 

 

 

 


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