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Law Commission review of financial remedy on divorce

Posted on 16 October 2023

The Law Commission has been tasked with reviewing the law of financial remedy on divorce, with a scoping report to be published in September 2024. Specific areas to be looked at include how ongoing payments for an ex-spouse should be dealt with, how the law should treat "conduct" by separating spouses, pension sharing orders and whether there needs to be a clear set of principles enshrined in law, setting out how cases are to be dealt with, rather than the current, more discretionary, process. The Law Commission will also revisit its 2014 report on marital property agreements.

Barbara Reeves says: The current law relating to financial remedy on divorce dates back to 1973. Yet its discretionary approach has permitted it to evolve over time so that older notions of the financially weaker party (usually the wife) having only their "reasonable requirements" met have shifted to adopt the more modern concepts of the sharing of matrimonial property, and an increasing recognition of pre-nuptial agreements without the underlying legislation even changing. 
However, that same flexibility has also led to uncertainty – the court order that a party might have received even 10 years ago is very different to one they might receive now (and indeed, unrecognisable compared to that received 25 years ago). Therefore, whilst this discretion allows tailor-made solutions, it also reduces predictability, potentially leading to more couples engaging in litigation. It can therefore be a difficult balance to strike. Certainly, given the increasing reliance by couples (particularly HNW and UHNW couples) on pre-nuptial agreements, a review of the enforceability of those agreements is highly desirable.      

Further, recent figures released by the Ministry of Justice have shown that, between January to March 2023, there were 28,865 divorce applications, but only 11,432 financial remedy applications. This suggests that many divorcing couples are not sufficiently aware of their rights and of the financial orders that may be made on divorce (including orders dismissing all financial claims including future claims). This will be particularly important for those who may experience financial hardship, or indeed, an unexpected application years after the divorce was finalised as occurred in the case of Wyatt v Vince [2015] UKSC 14, in which the writer represented the wife in securing a financial award some 27 years after the divorce. 

It is therefore hoped that this financial review will reform the 1973 legislation in recognition of the society we now live in. It will also need to address the unpredictable nature of the legislation without sacrificing the need for fairness for all.

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