This week sees the second reading of a private member’s bill, the Divorce (Financial Provision) Bill, which was introduced by Baroness Deech earlier this year. The Bill focuses on the division of money and assets on divorce or dissolution of a civil partnership. It proposes to make pre-nuptial and post-nuptial agreements binding, with certain conditions to ensure that they are properly understood and entered into freely. It would also introduce a system of division of post-marital assets which seeks to exclude property owned before the marriage, inheritances and gifts.
Baroness Deech outlines four reasons why the changes she proposes should be brought in by Parliament:
She says that the law has become uncertain as a result of the broad range of factors that judges are able to take into consideration when making a decision. This has allowed judges to update the law and move from a principle of ‘need’ to a principle of ‘equity’.
She feels that the leading judgments arise from cases that involve large assets and therefore these do not relate to the vast majority of families who have modest assets in comparison.
The removal of legal aid has resulted in an increase in ‘litigants-in-person’, which can leave parties who cannot afford legal representation in a vulnerable position.
Making pre-nuptial and post-nuptial agreements binding aims to provide certainty and prevent couples from needing to enter into costly and drawn out legal proceedings.
What do we think?
The principle of ‘equity’ has come about on the basis that it recognises a spouse or civil partner’s contributions to the marriage that are not necessarily tangible or monetary. While this may result in unpredictability in terms of outcomes, as each case is considered on an individual basis, removing this would de-value the role of a spouse who has invested time in making a home, raising children or playing the role of a carer.
Furthermore, as Baroness Deech rightly points out, the leading judgments arise from the ‘big money’ cases but they are not entirely irrelevant as they provide judges with guidance and a wide range of factors to take into consideration when making their decisions. This allows for cases to be considered on their individual merits and for parties to be provided for in order to meet their needs.
The introduction of a system which divides only post-marital assets cannot be used as ‘a one size fits all’ solution. For instance, it does not take into consideration situations where one party brings a property into the marriage and the other sells their own, or a situation where one party contributes substantially to the maintenance/expansion of the property brought in by the other. Excluding this from the marriage assets does not present a fair outcome for the parties.
If you would like to discuss any of the issues raised above or discuss your situation generally, please contact a member of our Family team.