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Insights // 24 April 2023

Law Commission Launches Review of Laws on Finances After Divorce and End to Civil Partnerships

Senior solicitor Catherine Currie, in our Family Law team, looks at the review and potential reforms.

Having just pressed ‘Share’ on my recent blog article about the Ministry of Justice’s consultation into making mediation compulsory, another consultation into what could bring (potentially) monumental change is afoot.

On 4 April 2023 the Law Commission announced that they will be carrying out a detailed review of current laws on financial remedies on divorce and dissolution of civil partnerships. The Commission is due to publish a scoping report in September 2024. Potentially, this could lead to a full review and future reform of financial remedies law.

Financial remedy orders are the orders a Court can make following divorce/dissolution of a civil partnership. These are broadly sales or transfers of property, maintenance (for spouses/civil partners and children) and the sharing of pensions. The law which currently governs this area is the Matrimonial Causes Act 1973 (MCA 1973), mirrored in the Civil Partnership Act 2004 (CPA 2004). The original legislation is therefore 50 years old!

Will things really change?

This is not the first review carried out in the last 10 years. In 2014, the Law Commission published a report on “Matrimonial Property, Needs and Agreement”. That report looked at reforming the law and aiming to make it clearer and more accessible to spouses. The main conclusions were that:

  1. The underlying law about spouses meeting each other’s financial needs did not need reform. That said, there was a suggestion that guidance about the meaning of ‘financial needs’ should be provided to ensure the term is consistently applied by the courts.

Guidance in this respect was published in 2016 with a second edition in 2018.

  1. The government should undertake work to assess whether a non-statutory formula (used in other jurisdictions such as Canada) could be produced in England and Wales to give spouses a clearer idea of maintenance that may be payable.

This has not been introduced to date and there is debate over having a discretionary system vs a defined system.

  1. A draft bill be introduced to make qualifying nuptial agreements legally binding (as they are in other jurisdictions), provided certain safeguards are met.

Nuptial agreements (pre-and post-marriage/civil partnerships) remain unenforceable and the Court have discretion as to what weight to attach to them. That said, if agreements are prepared in line with the Law Commission’s recommended safeguards, the Court are more likely to consider them binding on the parties.

The Law Commission’s new review will consider whether the issues covered in the 2014 report need to be reviewed.

The areas of potential reform

The new project will consider whether there are problems (inevitably, there are) with the current framework which require reform. The main areas being:

  1. Whether a clear set of principles, to give more certainty to separating couples, should be enshrined in law. In addition, a review of the factors Judges must consider when deciding which, if any, financial remedy orders to make. At present the Judges have discretionary powers over the division of the couple’s finances having regard to the statutory factors set out in the MCA 1973/CPA 2004.
  2. Whether there should be wider powers given to the Courts to make orders for children over the age of eighteen.
  3. How maintenance payments for an ex-spouse or civil partner should work.
  4. What consideration the courts should give to the behaviour of separating parties when making financial remedy orders.
  5. Orders relating to pensions and whether they are overlooked when dividing the divorcing parties’ assets.

There is some time between now and the end of the consultation but watch this space for potential reform on the horizon.

For further information or legal advice, please contact law@blandy.co.uk or call 0118 951 6800.

This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.

Catherine Currie

Catherine Currie

Associate Solicitor, Family Law

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