Cohabitation Rights Bill has first reading

Last Thursday Lord Marks’ Cohabitation Rights Bill had its first reading in the House of Lords. If passed, the Bill would, amongst other things, provide basic financial protections for former cohabitants. I have mentioned the Bill, which has actually been around for some years, on this blog previously on a number of occasions, including in a post that I wrote way back in 2014.

Unfortunately, this is a Private Members’ Bill, and therefore has little chance of passing, particularly as there are many who oppose it. Still, I thought I would have a little look at the Cohabitation Rights Bill’s provisions.

Financial settlement order

The Cohabitation Rights Bill has two main operative parts: one dealing with financial protection for former cohabitants, and the other making provision about the property of deceased persons survived by a cohabitant. I will deal here only with the former.

The Bill provides that a former cohabitant (defined essentially as someone who has had a child with the other cohabitant, or who has lived with them for at least three years) may apply to a court for a ‘financial settlement order’. A financial settlement order may require the payment of a lump sum, the transfer of property, a property settlement, the sale of property or pension sharing.

The application for an order must be made before the end of the period of 24 months starting with the date on which the former cohabitants ceased living together as a couple unless the applicant satisfies the court that exceptional circumstances would justify a late application being made.

The court may make an order if it is satisfied either that the respondent has ‘retained a benefit’, or that the applicant has an ‘economic disadvantage’, as a result of ‘qualifying contributions’ the applicant has made; and that having regard to various discretionary factors (income, needs, etc. – much like those that the court must consider on a financial remedies application on divorce), the court considers that it is just and equitable to make an order.

So the crucial part is the definition of those three terms: ‘retained a benefit’, ‘economic disadvantage’, and ‘qualifying contributions’.

A ‘retained benefit’ is defined as “a financial benefit which has been acquired, retained or enhanced by or for the respondent during the parties’ cohabitation or in contemplation of the parties’ cohabitation, whether in the form of capital assets of any kind, income, whether actual or potential or earning capacity”.

An ‘economic disadvantage’ is defined as “a past, present or future financial loss, burden or cost sustained by the applicant during the parties’ cohabitation or in contemplation of the parties’ cohabitation or likely to be sustained by the applicant following its breakdown”.

And a ‘qualifying contribution’ is defined as “any financial or other contribution made by the applicant to the parties’ shared lives or to the welfare of members of their families during the parties’ cohabitation or in contemplation of the parties’ cohabitation or likely to be made by the applicant following its breakdown”.

The other crucial thing is that the Cohabitation Rights Bill allows the parties to agree in writing to opt-out of its provisions. However, this does not prevent an application for an order being made – the court may vary or revoke the opt-out agreement if it determines that the agreement is “manifestly unfair” to the applicant.

Basic financial protection

I have long been in favour of providing financial protection for former cohabitants, and I have to say that I find much to recommend about the provisions of the Bill. It will give former cohabitants some basic financial protection, whilst not giving them the same rights as those who have married or entered into a civil partnership.

In particular, it will protect the person that I came across numerous times whilst I was practising: the woman who has given up her career to look after the home and bring up a family, but who did not marry her former partner, or have any interest in the home in which the family lived. As the law stands at present, she could, at the end of a long relationship, find herself left with nothing. That never seemed right to me.

I realise that there are many who argue that if the parties choose not to marry or enter into a civil partnership then they should not have any financial obligations towards one another. To that, I would point out that the Bill enables them to agree to opt-out, and if they do not so agree then it only provides basic protection for those who need it, not the full protection provided to married couples.

You can follow the progress of the Bill here

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If you would like any advice on the myths of a common-law marriage, you can find further articles here or please do contact our Client Care Team to speak to one of our specialist cohabitation lawyers here.