A good friend of mine recently told me of her four-year-old niece and some fairy cakes. After making them, said niece was sent to share half a dozen between her and her two brothers. Only later did aunt find her niece had given her siblings a cupcake each and kept four for herself. Cue exasperation from her aunt and a prompt redistribution to make sure everyone received their fair share.
It would perhaps be easy at this point to draw a comparison between divorcing couples and arguing children, yet most couples in England and Wales are able to reach an agreement as to the division of their assets. However, a significant minority requires the assistance of the court, leading to litigation and expense.
The statute governing financial remedies on divorce was enacted in 1973 and has barely been amended since. In essence, the instruction from parliament to the courts has been thus: consider all the relevant factors in the case, then achieve a fair outcome. That leaves us with a situation today where the original statute is largely intact, but the practice of the courts has changed organically with shifting societal attitudes. Principles have been developed by the courts to achieve fairness. To take one example, three decades ago a financially weaker spouse (invariably a wife) would be awarded an amount sufficient to meet her needs (and no more). That all changed twenty-five years ago with the case of White v White, when the court began developing the concept of 'sharing' matrimonial assets to recognise the non-financial contributions made, in one fell swoop recognising the potential discrimination against women within the existing law. Of course, this is just one of many principles that have emerged – but it is perhaps the most seismic example of judges developing the law in circumstances where successive governments had no appetite for legislative change.
The Law Commission’s scoping report on financial remedies on divorce sets out four potential ways forward, which are now subject to consultation:
1. Codification: consolidating settled case law principles into statutory form, such that the law is recorded in the statute rather than in various court decisions.
2. Codification-plus: building on codification, with additional reforms of specific areas of law, such as spousal maintenance and nuptial agreements.
3. Guided Discretion: the statute would set out the purpose of the law and the principles which must guide judicial decisions, with some (but probably less) judicial discretion being retained.
4. Default Regime: fixed and pre-determined rules for asset division at the end of a marriage or civil partnership, with very little discretion afforded to judges, similar to continental matrimonial property regimes.
In putting forward those options, the commissioners suggest that the current law 'promotes disputes' and that the fifty-year-old statute is 'no longer fit for purpose.' The situation is more nuanced than that. The best solution is almost always the one that couples can reach between themselves, even if that does not represent the outcome that would be ordered by a court. Codifying principles, or otherwise reforming the law, will not in and of itself make life any easier for those couples: information might be recorded in a different place, but access to specialist legal advice will remain a necessity.
That takes us back to the question of fairness. Although most people have an innate sense of what they think is fair, dividing resources fairly on divorce is by nature a complicated exercise. The proverbial cake being divided may not yet be fully cooked, or may have been partially eaten by one party. One spouse may need more of the cake. Some of the models put forward in the Law Commission’s report risk sacrificing fairness at the altar of certainty if they are implemented. It is not possible to legislate for every situation, so we should instead view the discretion of our judges as a positive.
We also need to be alive to the law of unintended consequences. Some of the models put forward may in fact lead to more uncertainty, particularly the model based on continental-style matrimonial property regimes, which could have widespread consequences, including in relation to inheritance law. Such radical and extensive reform would require very significant time and resources to implement properly.
If there are to be changes to the current law, attention will need to be given to the potential for additional pressure on an under-resourced system that is already near breaking point, and a new statute would lead to more contested cases as to its correct interpretation in the short-to-medium term. Pressure on our creaking court system will be further exacerbated if judges are also expected to deal with future cases arising from the assisted dying bill and proposed reforms to cohabitation laws, which are also said to be under consideration by the government.
This is a cake that needs to be cut very carefully.
John Davies is a partner at Farrer & Co
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