Family law has been very slow to change in the past, although a major shift took place in April 2022 when ‘no fault’ divorce was introduced making the process far simpler. Not surprisingly, the focus then turned to the linked financial process….
It surprises many parties that divorce severs their marital ties, but they remain linked financially unless/until a separate court order is made (either by consent or after contested proceedings) recording the division of their assets and income, etc. The Law Commission has now investigated whether the current law and financial processes need to be simplified, as with the divorce itself; whether the current system delivers a fair and consistent outcome; and whether some parties are losing out (because of gender, domestic abuse/control, or their reluctance to seek legal advice, etc).
The Commission published its “Next Steps” report on 18 December 2024. It is a detailed document (over 300 pages) and highlights particular concerns with the following issues:
- wide judicial discretion and interpretation of ‘reasonable needs’;
- lack of clarity, especially for parties without legal representation;
- problems predicting the likely outcome;
- high costs; and
- uncertainty regarding pre-nuptial agreements, their validity and enforceability.
While a subjective approach may seem preferable, with each case looked at individually, the resulting uncertainty can have a negative effect on the parties and on their negotiations. Fear of the outcome can sometimes lead to increased conflict.
As part of its investigation the Commission compared legal systems used in other jurisdictions (including Scotland, parts of Europe and the Nordic countries) many of which provide for ‘community of property’ (automatic joint ownership regardless of contribution) and/or default provisions (automatic application unless the parties opt out and enter into a binding pre-nuptial agreement).
Ultimately the Commission identified 4 potential models for reform, each suggesting limitations on the court’s discretion but always aiming to provide parties with more certainty of outcome at the end of the day. The proposed models range from mere codification at the lower end of the scale (producing greater clarity but no significant changes to the existing law) up to an effective default regime (as mentioned above) at the higher end, requiring a substantial changes to the current law.
So the report identifies a need to reform current procedure but does not make formal recommendations. Its purpose is to simply help the government decide whether any reforms should be introduced. If so, these will take time and careful consideration will be needed to balance the courts’ present subjective approach with a potential move away from the current (admittedly often vague) law and well-established principles.
The government now has 6 months to produce an interim response and there is no guarantee that any of the Commission’s suggestions will be accepted. We will update you as soon as we know anything further but in the meantime, if you would like to speak to us regarding your own financial situation or any queries you may have then contact us here.
