A meal ticket for life or protecting the financially vulnerable?

A meal ticket for life or a way to protect the financially vulnerable spouse in a divorce? Guest blog writer Julian Hawkhead, Senior Partner at Stowe Family Law, Leeds shares his reactions to Baroness Deech’s Divorce (Financial Provision) Bill.

I must confess that I was a little dismayed at the recent article in The Times outlining proposals for the reform of financial settlements (I am keen to avoid the word award) by Baroness Deech.

The focus on maintenance has been sparked by several high-profile cases which have seen ex-wives awarded large sums despite their ability to return to work. This Bill tabled by Baroness Deech is calling for up to a five-year cap to be placed on most maintenance payments, bringing England in line with Scotland, the rest of Europe and North America.

But is this really a progressive step? Reform should always bring progress. In this case, I feel it does not and the concept is naive. This approach is an attempt to over-simplify what can be a very difficult and vital issue in any divorce settlement. The further suggestion by Baroness Deech is that the better way to deal with the provision of future need is through the provision of greater capital and pension to the financially weaker party. However, experience tells me that in most cases where maintenance is required, there isn’t enough capital or pensions to meet future financial needs and quite frankly a pension is little help to somebody who is in their 40’s and a long way from retirement.

The Times article goes on to say that such reform would encourage mediation and out of court settlement and I agree there is a possibility of this but only because the wife would have no other choice than to expect the law. This does seem to be fair or appropriate.

In its Family Matters campaign, The Times and Marriage Foundation are urging an overhaul of the divorce laws to make them fairer. Recent high-profile cases including Waggott v Waggott has led to debate about eye-watering costs when settling maintenance awards. But eye-watering costs are incurred by people who have eye-watering amounts of money. For the everyday cases, that affect people up and down the country, there are simply not the assets to battle over.  Divorce requires compromise from most people to avoid legal fees and long-contested cases that they can ill afford. If you set a hard and fast rule as Baroness Deech is proposing, it is going to create cases of real financial difficulty. This could well lead to greater dependency on the state, a need that will then have to be funded by the tax payer. Which is better? For husbands to be paying maintenance for longer than they would like or the tax payer to be paying for the cost of divorce?

I agree that we need reform and accept that any uncertainty is a fertile ground for dispute. However, there is a real risk in over-simplifying the law and creating unfairness and potential financial difficulties. No divorce is the same so to apply a global cap of five years for maintenance will not ensure both parties needs are met reasonably or that their contributions to the marriage are fairly reflected.

We certainly have a lot to do. In the meantime, I end with a different suggestion for maintenance to avoid “open-ended” maintenance awards or what some, in my view unfairly, call meal tickets for life.

How about a rule that maintenance should not exceed longer than the length of the marriage (i.e. married for 5 years, maintenance lasts no more than 5 years) or their youngest child ending their financial dependency (usually 18). It’s not perfect but it’s a starter for ten. I’m happy to put the suggestion out there for debate. The right answer however is to look at the law concerning financial settlements on divorce as a whole and not on a piecemeal basis.

The bill has its second reading on May 11. I’ll wait to see what happens.