July 11, 2014

Reforms of divorce proceedings – what will they mean?

Due to the recent removal of legal aid within divorce proceedings, more individuals are making applications to the court for financial settlements, without a lawyer. This is resulting in a back log of cases and delays as individuals are often representing themselves, even when they don’t know their legal rights.

The current “ discretionary” system
Section 25 of the Matrimonial Causes Act 1973, sets out the factors the court will take into account when dealing with finances on  divorce - ie. provision for capital (“lump sums”), property transfers or sales,  income (“maintenance”) and pensions.

These factors include:

• the welfare of any children
• income/earning capacity
• property
• financial needs
• obligations and responsibilities now and for the foreseeable future
• standard of living of the family before the separation
• ages and length of the marriage
• any physical or mental disability
• conduct within the marriage (where relevant) and
• contributions ( financial and non-financial ).

This is a discretionary exercise, rather than a scientific formula and so financial settlements will fall within a range of “fair” outcomes which means they can be unpredictable and hard to negotiate - even for lawyers.

Reform and a more “scientific” system?
Lady Deech believes that this section of the law is now outdated and is in need of reform, which has led to the Private Member’s Bill, divorce (financial provision) being drafted. It proposes:

• a straight 50/50 split of post marital assets
• binding pre and post nups and
• spousal maintenance being limited to three years after the divorce, rather than “joint lives” - even in cases where someone has given up a career to be a homemaker rather than breadwinner.

If it’s not broke don’t fix it?
The current system, if properly resourced, allows for a fair financial settlement that is tailored to each case. There is a risk that fair outcomes will not be reached if these proposed changes become law. A one size fits all approach might mean simplicity but at the risk of fairness, especially where there are children involved. If the court retains discretion, it can allow for the circumstances of each individual family to be met.

Simon Bassett has specialised in family law for over 16 years and provides advice on all aspects of separation and divorce including financial matters and complex settlements, pensions, matters involving children, cohabitation agreements and pre-nuptial agreements.

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