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Reform of Financial Provision on Divorce: For the Few, Not the Many?

Document Cited authorities 7 Cited in Related
Vincent
Published date01 May 2020
Date01 May 2020
Pages268-275
DOI10.3366/elr.2020.0632

The discretionary nature of the rules governing financial division of assets upon divorce in England and Wales have long been criticized for their complexity and uncertainty,1 resulting in a growing movement amongst practitioners for a modernisation of the statutory approach.2 However, debate rages regarding the nature of such reform, with the most prominent (and most recent) proposal being the Divorce (Financial Provision) Bill (hereafter “the Bill”).3 A private member's bill originally introduced by Baroness Deech in December 2018, it reached its second reading in the House of Lords before failing to proceed as a consequence of the dissolution of Parliament on 6 November 2019. Reintroduced, in its entirety, by Baroness Shackleton as a private member's bill, it received its first reading on 20 January 2020.

At the Second Reading in the House of Lords, Deech explained that the objective of the Bill was to correct the failure of the Matrimonial Causes Act 1973 to satisfy the requirements of the rule of law to “be accessible, intelligible, clear and predictable”.4 Whilst such aims are to be applauded, the rigidity of the Bill has been much criticised for its “one size fits all approach”5 and potential for “grotesque consequences”6 if applied in practice. This analysis considers the impact of the Bill on “everyday” cases, arguing that it fundamentally misunderstands the dynamics of family life, and theorises that its enactment will do little to change current practices in family courts, nor will it serve to protect vulnerable parties where couples opt for a “DIY divorce”. The progress of the Bill as regards England and Wales is also of interest to Scots lawyers, as Deech explicitly states that she has borrowed from the “success” of Scots law,7 contained in the Family Law (Scotland) Act 1985 (the “1985 Act”) in proposing the implementation of three key proposals: matrimonial property; periodical payments; and prenuptial and postnuptial agreements.

SUCCESS OF THE SCOTTISH MODEL

Underlying Scots Law is the clean-break principle, which favours financial settlement by way of lump sums or redistribution of assets (as opposed to periodical allowances or maintenance, as permitted in England and Wales).8 Much has been written about the success of the 1985 Act, which requires judges to consider both (i) the five principles as set out in Section 9 of the Act, and (ii) the resources of the parties, before making orders.9 Whilst being widely respected by practitioners as being “a very good piece of legislation” and a “gem”,10 others have been critical of its lack of flexibility, perceived unfairness, and harsh treatment of “homemaker” wives.11

In allowing periodical payments only in cases where capital sums or property transfers are inappropriate or insufficient,12 Lord Hope argues that this clean-break principle fails to make provision for “homemaker” wives, who may need longer than the (provisional) maximum period of three years to assist in the transition to becoming financially independent following divorce.13 Lord Hope outlines that one of the deficits of the Scottish model is that it does not compensate women for the future economic disadvantage experienced as a direct consequence of the marriage, and is thus is in need of reform.14 However, it is possible to make a compensatory award to a wife, by making full use of the 1985 Act. Whilst it is true that Scots Law limits periodical allowances to a maximum of three years under section 9(1)(d), in cases of financial dependency, there is no such limit at all under section 9(1)(e), which applies in cases of serious financial hardship. Moreover, compensatory awards can be made under section 9(1)(b) of the 1985 Act, in the form of a capital sum, which can be payable in instalments in terms of section 12(3) – for which there is no maximum time period.15 By making full use of the 1985 Act, and in particular sections 9(1)(b), 9(1)(c), 9(1)(d), and 12(3), fairness between the parties can be achieved, without the need for reform.16

Indeed, in a review...

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