Compared to England and Wales, Scotland is an idyll for unmarried couples. But is change on the horizon?
In 2006 the Family Law (Scotland) Act became the first major legislation in the UK to secure unmarried couples’ rights. It does not seek to give separating cohabitants the same rights as divorcing spouses. Instead, it aims to provide a limited version of the same. The legislation applies to couples who have been living together for at least one year. The courts there now take account of:
- whether the applicant has suffered economic disadvantage due to the other cohabitant or the child; and
- whether the defender has derived an economic advantage from the applicant’s contributions.
If these matters are satisfied, the court has the power to do the following:
- Make an order that requires the other cohabitant to pay a capital sum to the applicant.
- Make an order that requires the other cohabitant to pay an amount in respect of any economic burden of caring for a child that both cohabitants parent or
- Make any other order the court thinks fit.
The Scottish law has much in common with the recommendations that the Law Commission for England and Wales made to the Government in 2007. A Law Commission Advisory Group (of which Marilyn Stowe was a member) helped to formulate the final recommendations and green paper produced by the Commission. Its conclusion: that due to the unsatisfactory recognition of cohabitants’ rights in this country, new legislation was required.
The Law Commission Advisory Group recommended that unmarried couples should be able to apply to the court for financial relief should their relationship break down. It felt that in order to maintain a distinction between married couples and cohabitees there should be a “minimum duration requirement” of 2 years spent living together, when there were no children. There would also be the opportunity of “opt out” agreements for couples who did not wish to obtain a financial settlement order from the court.
These recommendations did not make any provision for the 50/50 split of assets as in a long marriage. Instead they considered the financial disadvantage suffered by one of the parties and benefiting the other. If a couple have lived together as man and wife and one has stayed at home so that the other can get ahead, why should the non-working party lose out?
This gave a glimmer of hope to unmarried couples. If the proposals were taken up, cohabitants would not be left destitute or reliant on the archaic provisions of Chancery trust law, as at present.
Unfortunately, our Government decided that they would not bring such reforms into existence until they had considered the results of research conducted in Scotland. The research is certainly of interest: it explores the costs of schemes to give cohabitants rights, and how such schemes can help resolve cases. The downside is that the research is not scheduled to commence until 2010.
Some viewed this as an excuse, trotted out so that contentious and difficult issues could be placed on the political backburner.
Lord Lester of Herne Hill, a Liberal Democrat peer and human rights lawyer, noted: “It is a scandal in modern Britain that existing law does almost nothing to prevent such people from losing their home or sliding into poverty if their relationship breaks down or if their partner dies”.
In 2008 Lord Lester took the bold step of introducing a private members’ bill, the Cohabitation Bill, into the House of Lords, propelling the issue back into the political limelight. The first reading of this bill was conducted on 11 December 2008, and the second reading is likely to take place in March 2009.
This bill, if successful, would afford even greater statutory protection to cohabitants than has been recommended by the Law Commission. It would provide a wide range of financial settlement orders including payments of lump sums, maintenance payments, transfers of property, property settlements, sale of properties and even pension sharing.
The Law Commission’s recommendations are based on providing proof of the economic advantages and disadvantages to the couple in question, both during the relationship and after separation. Lord Lester’s bill includes these as two of the factors to be considered by the court in making any orders. It states that the court may make a financial settlement order if the cohabitants are no longer living together and if the court feels that it is just and equitable to make an order.
The bill has no minimum duration requirement to qualify for legal relief. However, the court would have various factors to take into account when making an order, which are similar to those of a divorce court. These would include:
- The welfare of any relevant child.
- The length of cohabitation.
- Contributions by the parties (both financial and otherwise)
- Income and other financial resources
- Financial needs and obligations of the parties.
It is hard to see that this radical bill would be accepted by Parliament, given the fears that arose around the more moderate recommendations made by the Law Commission.
While this has been going on Scotland has had its first relevant judgement, in a 2008 case known as CM v STS. In this case, the cohabitation provisions of the Family Law (Scotland) Act 2006 were applied. A legal secretary was awarded one payment of £1,460.31 and £13,000 to be paid in instalments of £400.00 per month, to be paid by her former partner and cohabitant. The £1,460.31 was awarded to cover the tax credits previously obtained by the defender. The £13,000 was awarded as a result of the financial loss and the economic burden that had come about because the woman cared for the couple’s two children. Although this seems to be a breakthrough on cohabitation law, it is not quite as favorable as it could have been.
One of the main distinction’s between Scottish provisions for cohabitants and for divorcees is that aliment (maintenance) is not available on breakdown of cohabitation, but has an ‘obligatory’ status on the breakdown of a divorce. The court in CM v STS made it clear that the £400.00 instalments did not represent an award of alimony. More information can be found in the guest blog post by John Fotheringham.
I am a strong supporter of Lord Lester’s move to improve the financial position of cohabitants here in England and Wales, but I fear that his private members’ bill may be too extreme for the Government – and will simply disappear into a backlog of paperwork.