Following years of campaigning, many family lawyers rejoiced in 2022 when the government introduced ‘no fault’ divorce, which removed the need for couples to assign blame for their marriage breakdown.
However, while ‘no fault’ divorce eased the strain of separation for many, lawyers highlighted another area requiring attention: financial remedies. ‘There is no use having a divorce if the money is not sorted out – the house has to be sold and the children are caught in conflict,’ high-profile divorce solicitor Baroness Shackleton (Fiona Shackleton) told a House of Lords debate.
So, it was no surprise that financial remedies was one of the topics dominating the agenda of a Westminster Legal Policy Forum conference this week entitled ‘Next steps for family justice reform’.
Financial remedy orders are governed by the Matrimonial Causes Act 1973 and mirrored in the Civil Partnership Act 2004. The Law Commission was tasked by the Ministry of Justice last year to look at whether the law is working effectively and delivering fair and consistent outcomes for divorcing couples.
A comprehensive study on the financial arrangements made by divorcing couples, led by Bristol University’s Professor Emma Hitchings, highlighted the challenges. The research found that in general wives, and particularly mothers, were in a more precarious financial position at the point of divorce than husbands, and worse off financially than men up to five years after divorcing. Only one in 10 divorced people with a pension yet to be drawn made pension-sharing arrangements. The use of legal advice was linked to a greater likelihood of wives receiving ongoing support, the home being transferred to the wife and the wife receiving a higher percentage of any sale proceeds. However, half of divorcing couples sorted out their own financial arrangements.
Tamsin Caine, director of financial planning at adviser Smart Financial, told the conference that three-quarters of the clients she is working with have left abusive relationships. ‘Perpetrators often put pressure on my clients to settle quickly. My clients are regularly gaslit. A huge number of messages are sent. Not physical threats but financial threats. “If you don’t accept this [offer] you’ll get less”.’
‘Lots of important principles have been laid down which, despite the vagueness of the act itself, make the law tolerably clear and easy to understand’
HHJ Edward Hess, London Financial Remedies Court
The Law Commission will publish its scoping paper on 18 December. Law commissioner Professor Nick Hopkins told the conference it will focus on four potential models for reform.
- Model one: Codification. Minimal change to the existing law contained in section 25 of the Matrimonial Causes Act 1973. Current law as it has developed through cases codified and the court retains wide discretion.
- Model two: Codification-plus. The current law is codified, with additional reform to deal with specific areas where the law is not yet settled. The court retains discretion, but limitations on discretion may be introduced in relation to areas of reform.
- Model three: Guided discretion. A set of principles and objectives guides the court when exercising discretion.
- Model four: Default regime. A new matrimonial property regime enables couples to know when marrying how property will be divided on divorce. High level of certainty and the court has very limited discretion.
However, actual reform may not happen any time soon. Hopkins told the conference the scoping paper will not contain any recommendations. It will be a ‘toolkit’ for the government on whether the law for financial remedies should be reformed and what shape any reform could take.
His Honour Judge Edward Hess, lead judge of the London Financial Remedies Court, cautioned against concluding that too much judicial discretion is the problem. Yes, section 25 of the Matrimonial Causes Act 1973 act is vague, Hess told the conference, but judges ‘have made the law operative in this area’.
Under the leadership of several judges, including Mr Justice Mostyn and Mr Justice Peel, ‘lots of important principles have been laid down which, despite the vagueness of the act itself, make the law tolerably clear and easy to understand’, Hess said. One such principle is that the court should meet the reasonable needs of parties in the context of their health, earning ability, financial circumstances and caring for children or other dependents.
Neal Barcoe, deputy director of the family justice policy unit at the MoJ, told the conference that the government will want to consider the findings of the commission’s work ‘and what that means going forward’.
Family lawyers campaigned for over 30 years for ‘no fault’ divorce. Let’s hope they don’t have to campaign as long for financial remedies reform.
