Eri Horrocks, Polly Atkins & Constance Tait share views on law reform in ThoughtLeaders4 HNW Divorce Magazine
Eri, Polly and Constance’s article was published in ThoughtLeaders4 HNW Divorce Magazine, Issue 17 (page 7), and can be seen here.
Law reform: views from the next gen lawyers on the frontline
Many distinguished members of the legal profession have been sharing their views on reform in family law – so we wanted to share our Next Gen perspectives on which areas actually need changing.
Cohabitation – Constance Tait
We are all aware that cohabiting couples are the fastest growing family structure in the country. Recently published ONS 1 stats show that they now account for 18% of families in the UK.
It often comes as a surprise to lawyers how many people believe the common law marriage myth. The issue is twofold: we need both greater awareness of cohabitants’ limited legal protection and clarity as to what reform should look like. Whilst some may argue that if people had a better understanding of the legal position they may make different decisions about marriage, negating the need for reform, the most vulnerable are unlikely to be in a position to insist on marriage.
Whilst the first limb has government support, the latter does not, arguing that it cannot consider cohabitants’ rights before the current Law Commission review on financial provision of divorce has concluded, as cohabitants’ rights must be considered against a “baseline of rights” afforded to married couples and civil partners.
The two are closely linked and if we want to see an overall system that is fair, they should be considered at the same time.
The Law Commission’s 2007 recommendations put forward a sensible, fairer model for separating cohabitees, applicable to all eligible cohabitees (meaning couples who have lived together for between 2-5 years, as well as any couple with a child), with the possibility of an opt-out agreement.
The proposals sought to “ensure that the pluses and minuses of the relationship” are “fairly shared”. Relief would be based on qualifying contributions, which would offer better protection for the financially weaker party than what is available at present. The suggestion that the scheme would not be exactly the same as financial relief on divorce (e.g., financial remedies would not be granted on the basis of needs) would also help to address criticism from those who see it as a threat to marriage.
Any proposed reform would need to provide both flexibility, to allow for different circumstances and reflect varying degrees of commitment, and autonomy, by ensuring that those who wish to opt-out, and decide the financial arrangements for themselves on separation, may do so.
Prenuptial agreements – Eri Horrocks
“Well, what’s the point in having one then?!”
How many of us have had clients say this when told that pre-nuptial agreements (PNAs), when entered into with the standard safeguards, will have significant weight but are not binding? As lawyers, we know that it is still worth having a PNA to place boundaries on the awards that can be made on divorce as well as to ensure couples have discussed their financial future and offer some degree of certainty. For our clients however, the experience of negotiating their possible divorce settlement whilst preparing for their wedding is inevitably stressful, and they want to know those efforts are not in vain. Moreover, there are some clients who, no matter how clear our advice that they must expect to be held to the PNA’s terms, sign in the hope of being able to renegotiate or resile from it later on.
Although some judges, such as Moor J, have clearly said that “Litigants cannot expect to be released from the terms that they signed up to just because they don’t now like what they agreed” (see MN v AN [2023] EWHC 613 (Fam)), there are other judges who do not take that same approach and may be more willing to exercise their discretion.
The Law Commission has already recommended that PNAs should be made binding in their February 2014 report by way of “qualifying nuptial agreements” but ten years on, we are seemingly no closer to the law being changed. In family law, where there are other more pressing priorities than the wholesale reform of financial remedies on divorce, making PNAs binding would be one way to tackle the issue of “uncertainty” which exists in our discretionary financial remedy system and would give people the ability to “opt out” of having section 25 of the Matrimonial Causes Act applied to their finances.
Legal services payments orders – Polly Atkins
The practical implications of the law relating to Legal Services Payment Orders (LSPOs) pose real challenges for solicitors, their clients, and the solicitor-client relationship. The purpose of an LSPO is to enable financially weaker parties to obtain legal representation. Whilst it is often said that this is to create a level playing field, in reality that is rarely achieved.
The funding of a case is an important but often uncomfortable conversation to have with a client, particularly when acting for the financial weaker party who may have little knowledge of, let alone access to, matrimonial resources.
Whilst the ability to make a LSPO application is often welcome news, if the other party does not willingly agree to fund our client’s costs then the road ahead may not be straightforward.
The application can affect the dynamics of the case. It can only be made after Form A has been issued, which can mean starting proceedings where non court dispute resolution (NCDR) would otherwise be preferred. Further, going “cap-in-hand” to the financially stronger party may exacerbate a power imbalance which clients often feel sets the scene for the proceedings.
LSPOs also require solicitors to bear an element of risk. Preparation of a LSPO application itself is expensive. Whether historic costs are recoverable under a LSPO remains a matter of judicial disagreement 2, and solicitors face scrutiny over their cost estimates, with the client often awarded a lower sum than their carefully considered and thorough estimate 3. The restrictions on recovery of overspend 4 means that solicitors must then work within the court imposed budget. It is hard to see how that can be done without cutting corners.
In circumstances where the dynamic starts with a power imbalance and throughout the process the applicant (and their solicitor) is subject to scrutiny and control where the other party has carte blanche access to (often) matrimonial resources to fund their own legal fees, one has to question whether this is appropriate and fair. Whilst there may be no easy solution, we need to think about alternatives.
References
1 Families and households in the UK - Office for National Statistics (ons.gov.uk) - 8 May 2024
2 DH v RH [2023] EWFC 111
3 See for example MG v GM [2022] EWFC 8 and LP v AE [2020] EWHC 1668 (Fam),
4 See X v Y, Re Z (No. 4 Schedule 1 award) [2023] EWFC 25 and Xanthopoulos v Rakshina [2023] EWFC 50
