On 18th December 2024 The Law Commission is set to publish its report on reforming financial arrangements following divorce and civil partnership separation.
At present, the division of financial assets upon divorce is governed by the Matrimonial Causes Act 1973 (and mirrored in the Civil Partnership Act 2004) but it isn’t the age of this legislation that is the reason for reform. After all, a lot of what was said about relationships in 1973, still applies today, but is the law as timeless as the Pink Floyd’s album ‘Dark Side of the Moon’ or as outdated as the first mobile phone call, which were both made that same year?
The report is due to undertake a detailed analysis of the laws and processes around financial remedy proceedings, and the orders and powers available to Courts and Judges, including:
- whether there should be clearer legal principles and/or less discretionary powers
- whether Courts should have wider powers to make Orders for children beyond the age of 18
- arrangements for maintenance payments for ex-spouses or civil partners
- greater consideration by Courts of the behaviour of parties when considering Financial Orders
- Orders relating to pensions when considering the division of assets
- factors the Court should consider when making financial remedy orders
Statistics published by the Family Courts in September 2023 suggest that of the 28,865 divorce applications issued between January – March 2023 in approximately half of these cases, neither party is represented. In the same period in 40% of private law cases, dealing with financial and children matters neither party had legal representation, and the number where both parties had legal representation was 18%, reducing from 41% in the same period 10 years prior, from January – March 2013.
Further research by Bristol University in November 2023 suggests that in cases where parties are yet to reach pensionable age, only 1 in 10 result in a order being made for any pension sharing. It cannot be that in 90% of cases parties both parties have equivalent value pensions, or sufficient capital assets to offset against them - one party is being left at a financial disadvantage.
I think the report is likely to conclude that the treatment of pensions on divorce is in need of a major review.
When making a Financial Order, the Court needs to be satisfied the terms are fair according to the criteria of:
- income, earning capacity, property and other financial resources each party has now or in the foreseeable future
- financial needs, obligations and responsibilities of each party now and in the foreseeable future
- the standard of living enjoyed before the breakdown of the relationship
- the age of each party and the duration of the marriage
- any physical or mental disability of either party
- contributions each party has made or is likely to make in the foreseeable future to the welfare of the family, including looking after the home or caring for the family
- the conduct of each party
This gives the court a great deal of discretion and Judicial interpretation, and although there should be continuity amongst Judges, they are humans, and each one of them is likely to have a different view. This is why determination by the Court should be considered a last resort.
It is my view that every family and their needs are different, and the law should accommodate this. Judicial discretion is vital as rules that are too prescriptive won’t work, but the current list needs updating.
In conclusion, I think the most apt analogy from 1973 is that of the James Bond film ‘Live and Let Die’. It’s still useful and enjoyable, but you can see it is over 50 years old and isn’t necessary reflective of current times. We shall see….
