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A fresh start for financial claims on divorce

Posted on 4 April 2023

The Government has recently confirmed its intention to review the law dealing with financial claims on divorce in England and Wales. The current law dates back to 1973 and while many have criticised the uncertainties inherent in it, others favour its perceived flexibility.

But what might change as a result of the review?

We consider below the potential areas for change, which some could argue are ripe for updating:

Extent of Judicial discretion

One of the main criticisms of the current law is that judges have extremely wide discretion as to how assets should be divided between parties on divorce. Although the relevant statute, the Matrimonial Causes Act 1973, contains guiding principles, and case law has clarified how those principles should be applied, different judges can still legitimately make different decisions on the same facts. This has led to uncertainty and parties, knowing that there is no "set" outcome, can end up in protracted litigation. A greater "steer" for judges, perhaps in respect of how the needs of a child or a party should be met, or as to how assets built up during a marriage (by either party) should be shared, would reduce scope for argument and help many more cases reach a resolution without going to court.

Ongoing periodical payments

In England and Wales, the court can order one party to make periodical payments (often known as paying maintenance) to the other, potentially indefinitely. Some campaigners have sought to replicate provisions in other jurisdictions, where any requirement to pay maintenance is ordinarily limited to a number of years. While this would be a welcome development for those seeking to move on from a divorce with their income unfettered, particularly where an older couple separates after a long marriage, or where one spouse will be wholly responsible for looking after young children and unable to maximise their earnings, the ability of the court to order longer term support may be a lifeline for the financially more vulnerable.

Nuptial agreements

Pre-nuptial and post-nuptial agreements are not currently binding in this country. However, since the case of Radmacher v Granatino [2010] UKSC 42, where an agreement is freely entered into and both parties have a full understanding of its implications, the court will frequently give effect to it, provided it is fair. In 2014 the Law Commission recommended that qualifying nuptial agreements should be binding, but the proposals were never implemented. Making nuptial agreements binding, with certain safeguards, would provide far greater certainty to couples and help avoid litigation.

Rights for cohabiting partners?

In August 2022, the Women & Equalities Committee published a report on the rights of cohabiting partners. They made a number of recommendations, including for the adoption of an "opt-out" cohabitation scheme, as proposed by the Law Commission in a report dating back to 2007. This would provide those exiting qualifying cohabiting relationships with a (limited) ability to make a financial claim. The Government's response was published in November. It indicated that it would need to conduct its review of the law on financial provision on divorce before looking at any provision for cohabiting couples. The Women & Equalities Committee report noted that a "staggering" 46% of the population incorrectly believe that there is a system of "common law marriage" in this jurisdiction. In fact, cohabiting couples have no claims on the breakdown of their relationship (other than through property law or in respect of children). It is hoped that the Government's review of financial provision on divorce will hasten a review of the law on cohabitation.

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