Further to my post here on Tuesday, I have been giving a little more thought to the Law Commission’s proposals for reform of the law regarding cohabitants’ rights. OK, I know that the proposals are now nearly seven years old and that the present government has no intention of implementing them, but I still thought it might be worth giving them some fresh consideration and setting out my views. After all, if you indicate that you agree with a broad proposal for reform you really need to consider how that reform might actually look in practice.
Please note that what follows are only my own thoughts upon the Law Commission’s proposals. They are not based upon anything discussed in the Law Commission’s report, or elsewhere.
As I stated on Tuesday, the scheme proposed by the Law Commission had three key features. I will deal with each in turn.
The first feature was that anyone using the scheme should meet certain eligibility requirements. These were either that the couple had had a child together or that they had lived together for a certain length of time – a period of between two and five years was suggested.
To be honest, I’m not sure that these are required. As will be seen in a moment, the essence of the problem of cohabitants’ rights is that one party can suffer severe financial hardship as a result of the cohabitation. That is the problem that any scheme should be seeking to address. If an applicant can show that they have suffered such hardship, then that is the only eligibility criterion they need to meet.
What if there are children – won’t they need some provision? Well, that is what Schedule 1 of the Children Act 1989 is there for. Under that schedule one parent can already apply for financial provision for the children against the other parent including, in particular, provision for their housing.
As to any qualifying period of living together, I could see that causing difficulties with relationships as the ‘deadline’ approaches. It could also lead to unnecessary arguments as to exactly when the cohabitation began and ended – the whole nature of cohabitation is that it is ‘free’, not subject to artificial rules regarding its beginning and end. In any event, as I indicated above, a qualifying period is just not needed – all that is needed is proof of hardship. Having said that, it is probably the case that any such hardship is only likely to materialise after several years of cohabitation.
The second feature of the Law Commission’s scheme was the possibility that the parties could ‘opt out’ of it. This might satisfy some of those who do not believe that cohabitants should have any rights, and I accept that it should be a possibility, just as it is a possibility that married couples ‘opt out’ of the rules on financial relief after divorce, by entering into a pre-nuptial agreement.
Two things should be noted about the ‘opt out’, however: firstly, there must of course be no duress on the part of the financially stronger party, forcing the weaker party to agree to the ‘opt out’. Secondly, this is a positive step that must be taken – like pre-nuptial agreements, the party who is being asked by the other to agree is ‘put on notice’ of the other party’s feelings regarding money and property. Perhaps the party who is being asked may reconsider the whole relationship?
The final feature of the Law Commission’s scheme is that the party applying for financial relief would have to have made ‘qualifying contributions’ to the relationship, which give rise to the respondent retaining a benefit, or the applicant suffering a continuing economic disadvantage. As I indicated earlier, this is the crux of the problem. The classic situation is where the contributions take the form of one party, usually the woman, giving up work to look after the home and the children. If she does this for an extended period then the other party has gained and she has lost. In such a situation the court should be able to redress the balance.
Note, however, that this does not mean that she will be entitled to the same sort of settlement that a wife might expect after a long marriage. There will be no ‘starting-point’ of equal division of assets – she will only be receiving some compensation for her loss, which will hopefully help her to re-establish her economic independence.
Well, those are my thoughts. If (as I hope) this reform is going to be back on the agenda then there needs to be some discussion, and this is my small contribution.