Proposed changes on divorce regime won’t solve the pressing issues

The Law Commission has published a report calling for reform of the law governing finances on divorce and the dissolution of civil partnerships in England and Wales. According to the report, the current law “promotes disputes” and the 50 year old statute which governs this area is “no longer fit for purpose”, however, the situation is more nuanced.

Evolution vs stasis?

Most of the principles in this area come from judge-made case law, rather than the statute which dates from 1973. Successive governments have long ignored the need to examine fairness in finances on divorce, leaving judges to modernise the law themselves – and they have done so very successfully.

The statute entrusts judges with broad discretionary powers. This flexibility has allowed the law to develop with societal shifts. For example, until 2001 financial provision for a homemaker was generally restricted to that person’s “reasonable requirements” – they were not entitled to an equal share of the assets built up during the marriage. In the landmark case of White v White, Lord Nicholls determined that there should be no discrimination between the homemaker and the breadwinner, and assets built up during the partnership should generally be shared equally. This decision reflected society’s evolving view of what is fair.

Critics argue that our current system leads to inconsistent outcomes and is very unclear for separating couples. Clearly there is a balance to be struck between discretion and certainty, however, if the pendulum swings too far in the other direction, we risk unfair outcomes for families and rigidity in the law when we need scope for progression.

Roadmap for reform

The Law Commission report explores four possible models for reform:

1. Codification: This would involve consolidating settled case law principles into statutory form, whilst retaining significant judicial discretion. A reformed statute would make clear what the law is, rather than the law being set out in various court decisions.
2. Codification-plus: Building on codification, this would also involve reforming specific areas of the law such as spousal maintenance and nuptial agreements through legislation. Clarity on certain areas, including nuptial agreements, would be broadly welcomed.
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 a lesser) degree of judicial discretion being retained.
4. Default Regime: There would be 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-style matrimonial property regimes.

Some of these models risk sacrificing fairness at the altar of certainty if they were implemented. It is not possible to legislate for every situation, and we should view the discretion of our judges as a positive – our current system prioritises fairness in individual cases and allows for evolution over time.

The model based on continental-style matrimonial property regimes could have widespread consequences for inheritance, property and tax law – such wholesale reforms could in fact lead to greater uncertainty in the short-to-medium term.

The bigger picture?

The Law Commission’s report does not address the biggest issue in family justice: an under-resourced system that is close to breaking point.

The most pressing issue for many separating couples is a lack of access to legal advice and long delays in the court system. Although we pride ourselves on a highly bespoke and discretionary system, in practice few have access to it.

The withdrawal of legal aid from most family law cases has left a significant vacuum, with many couples left navigating the process without legal advice. Reaching an agreement outside of court is more challenging where one or both parties are unrepresented, and this has added to a backlog of court cases.

Any changes to the current law will likely place additional pressure on a court system that is already struggling, and a new statute would undoubtedly lead to more contested cases as to its correct interpretation.

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.

Next steps

The government must issue an interim response to the Law Commission’s report within six months, and a full response within a year.

With a busy legislative schedule, it remains to be seen whether reforming this area of law will be a priority issue for the government, but we certainly do not expect to see any reforms before 2026.

In the meantime, couples who want greater certainty regarding their finances on divorce or dissolution should consider entering a pre- or post-nuptial agreement.