New formula to settle divorce payouts?

Emma Alfieri reports on the Law Commission’s recently published consultation.

The Law Commission has today (Tuesday 11 September) published a consultation claiming there is a “lack of legal clarity” about the way in which financial matters are decided upon divorce and upon dissolution of Civil Partnerships.

Under the current law, there are detailed statutory provisions about the orders that the court can make where couples cannot agree financial matters between them; but the statute does not say what the court is to achieve by making these orders. Therefore the report claims that if a member of the public read the relevant legislation they would have “no sense of what the outcome would be”.

The reports goes on to say that the judge in the family court has been compared to a bus driver, who has been told how to drive the bus and told that he must drive it, but has not been told where to go, nor why he is to go there.

There is also evidence of regional inconsistencies, with different outcomes favoured in different courts. The uncertainty in the law has given rise to dissatisfaction, as has its obscurity, and both those factors are increasingly causes for concern in an era when access to legal advice is going to be more limited following reform of legal aid.

The paper goes on to ask whether financial support should continue to be determined by the court, at the judge’s discretion, or whether it should be calculated by reference to a formula, so substituting greater predictability for individualised discretion. A number of other jurisdictions have taken this route, notably Canada where interestingly financial support is based on the length of the relationship and the difference between the spouses’ incomes.

The report also proposes that “non-matrimonial property” held in one spouse’s name alone and acquired as a gift or inheritance, or before their marriage, should not be shared unless it helps meet their partner’s needs.

The consultation period is open until 11 December 2012. The Commission’s final Report on Pre-nuptial and Post-nuptial Agreements (expected in the autumn of 2013) will then make recommendations for principled reform.

Emma Alfieri from our family team comments: “A formulaic approach would provide certainty however parties should still be able to apply to the court if the formula works out to be unfair given the particular circumstances of the case.

This is a difficult area of the law and there is not going to be any “quick fix” solutions. The report stresses that other jurisdictions that have achieved fundamental reform of the law have done so after years of research and piloting. This is an important area of social policy and therefore reform is going to take time”.