The Ministry of Justice has today launched its consultation following the Law Commission’s 2024 scoping report. The consultation, ‘A Fairer End to Relationships’, proposes reforms to financial remedy law, the law for cohabitants on separation, and the law for cohabitants on intestacy.
The proposal in respect of financial remedy law is the ‘codification plus’ model. An overarching objective will be applied in all cases. The existing case law derived principle of ‘fairness’ is described as being potentially vague. The overarching objective will instead be one which sets out how fairness will be achieved. The principles of ‘needs’ and ‘sharing’ will be codified in statute.
‘Needs’ will have a three-stage hierarchy: children first; capital and income needs including housing and pension needs, second; and thirdly, discretionary needs (referred to as ‘luxuries’). ‘Needs’ will include those not directly linked to the relationship such as illness or disability. The principle underpinning ‘needs’ will be to support individuals as they move from shared lives and joint finances towards financial independence. ‘Sharing’ will adopt the approach set out in Standish. The proposal sets out that reform so as to limit the term of spousal periodical payments is not needed and nor is reform to the law in respect of provision for children over the age of 18.
‘Compensation’ will be added to the s. 25 factors, which will otherwise be adopted in the new law. ‘Compensation’ will cover the relationship generated disadvantage of a party stepping back from a career to care for children.
Couples are to be encouraged in achieving greater autonomy in planning their future financial arrangements with qualifying nuptial agreements being given a statutory basis.
The proposal in respect of the rights for cohabitants on separation will address the legal position of the 3.5 million+ people in England and Wales who cohabit without marrying. The MoJ proposes a new needs-based framework for eligible couples, being people who have lived together for 3 years or who share a child. The legal framework will be narrower than for those who are married with no equal sharing, discretionary needs, reference to the principle of compensation, and with maintenance only in exceptional circumstances. It would however extend beyond housing needs to include housing, capital, income and pension needs. The earning capacity, financial resources of each individual, any disabilities, their ages, as well as the duration of and standard of living during the relationship will be taken into account. These proposed reforms would see the TLATA and Schedule 1 regimes for eligible separating cohabiting couples entirely replaced with an approach that is closer to that which exists for divorcing couples.
Importantly, the consultation seeks views on how domestic abuse, including economic abuse, should be recognised and weighted in financial remedy proceedings and in respect of cohabitants on separation.
In respect of the inheritance rights for cohabitants on intestacy, the proposal is for an extension of intestacy rights to qualifying cohabitants on the same basis as spouses and removing the 2-year eligibility threshold under the I(PFD)A 1975 where cohabitants share children.
Lots of this is recognisable. The principles underpinning the proposed reforms, namely prioritising fair outcomes for children, protecting the vulnerable, providing a clear and accessible framework, and preserving the distinct status of marriage, are the very principles with which family court judges have been grappling since 1973. However, the reforms proposed have the potential to be the most significant in this area of the law for decades.
Further information
For more information from the family team, contact clerks@36family.co.uk
