Law Commission suggests ways to reform financial remedies law
The law on financial remedies on divorce has largely remained the same for the last fifty years.
But there are many people who have called for the law to be reformed, in particular to make it more certain. In response to those calls the Law Commission has undertaken a ‘scoping project’, to look at whether the current law needs reform, and if so what that reform might look like.
The Commission has now published its Scoping Report.
In the report the Commission concludes that the current law does need reform, but says that the shape that reform should take is a matter for Government to decide.
The Commission has identified four possible models on which future reform of financial remedies law could be based.
The current law is essentially based upon judicial discretion, giving judges a wide discretion as to what financial settlement they consider is appropriate. Whilst this enables judges to tailor their awards to each individual case, it can also give rise to some uncertainty as to what award the court will make. This uncertainty can in turn make it more difficult for parties to resolve matters by agreement.
The four models suggested by the Law Commission range from keeping greater discretion at one end of the spectrum (number 1 below), to introducing greater certainty at the other end (number 4 below). They are as follows:
1. Codification: This involves keeping the existing law as it is, but also codifying the case law that has amended the law over the last fifty years. The court would retain a wide discretion.
2. Codification-plus: This would involve codifying the existing law and also reforming the law to deal with specific areas where it is not yet settled, for example in relation to nuptial agreements and the effect of a party’s conduct upon the settlement. Under this model the court retains discretion, but limitations on discretion may be introduced in relation to areas of reform.
3. Guided Discretion: This model would introduce a set of underpinning principles and objectives which would guide the exercise of the court’s discretion.
4. Default Regime: Lastly, this model would involve the creation of a ‘matrimonial property’ regime, imposing a set of rules which come into effect from the date of the marriage, and which dictate with a high level of certainty the financial outcome when the marriage comes to an end. Under such a regime the court would have very little discretion, and couples would know when marrying how property will be divided on divorce.
It is now for Government to consider and respond to the Scoping Report. Under a Protocol between the Lord Chancellor (on behalf of Government) and the Law Commission, the responsible Minister will respond as soon as possible, and in any event with an interim response within six months of publication of the Scoping Report and a full response within a year.
We will obviously have to wait to see whether the government will decide to proceed with reform of the law and, if so, what the reform will look like. But even if there is reform, it seems clear that it is still some way off.
You can read the full Scoping Report here.
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