Too chicken for hot potato?

Until laws on divorce and cohabitants are brought into the 21st Century injustice will continue, says Julian Lipson

Too chicken for hot potato?Let’s face it. Reforming family law is rarely a vote winner.

How often have family lawyers been handbagged for supporting the lot of the unwed mother, the same-sex partner or the abolition of fault-based divorce? The Press cite these as de-valuing the sanctity of marriage. It’s no wonder that family law reform is the political hot potato the Government leaves untouched.

The Law Commission has consigned to the scrapheap the potential reform of how assets are to be divided on divorce. Apparently, it is too costly and complex to undertake such a review and it has been moved onto a backburner (possibly not to be brought back).

It joins the Law Commission’s earlier recommendations for the modernisation of laws concerning unmarried cohabitants’ claims, that is to overhaul the existing arcane system, which is incomprehensible to most clients and frequently results in financial injustice. Family lawyers are told that cohabitants must wait for an indefinite period whilst a “costs/benefits” analysis of Scottish legal changes is considered first. Who knows how long that will take?

The legislation governing asset division on divorce celebrates its 35th birthday this year. The Matrimonial Causes Act 1973 was enacted at a time when most women did not work, few children were born out of wedlock and a litre of petrol would have cost only 8½p. Its operation in the completely different world of today is difficult to predict, not fit for purpose and often applied differently in practice by the judiciary.

The judges have striven valiantly to update the law by imposing different judicial glosses over the years. Each of these has, in time, fallen out of fashion or been discredited and the cases always say somewhere that it is up to the legislators to change the law.

Since the House of Lords’ decision in White (2000) the yardstick has been equality – there is (probably) a presumption of equal division in all cases (except in those where there is not) – and therein lies the problem. The difficulty to predict.

The White decision rightly ended institutionalised financial discrimination against non-working women, but it has introduced injustice to others (frequently to financially successful men or women). Fewer people are now marrying because they are worried by the ramifications of wedlock.

With the stakes now so high where a lot of money is at stake, the unintended result of White is that the number of litigated cases has risen exponentially because the uncertainty makes people litigate. We have reached a level where the Courts have trouble coping with the number of cases.

The Court of Appeal recognised in Charman the need for a fundamental legal review and unusually closed its judgement with a plea to the Government for reform. Sadly, this has fallen on deaf ears and the “shelving” of reform been justified as being too difficult, slow and expensive. This decision will cause immense disappointment and further tarnish the reputation of the family justice system.

For the wealthy client, there is some comfort. The Law Commission will fortunately review whether pre-nuptial agreements should be made fully legally binding, though we will likely have to wait until perhaps 2012/2013 before draft legislation materialises, and it will likely be some years after that when it is brought into force.

If pre-nuptials are legitimated, that will soften the blow, to some extent, of the existing legal mire. It will reduce uncertainty for some couples and help them to agree that the generally perceived excesses of the changing case law in recent years should not apply to them. It will certainly allow affluent clients to opt out of an unpredictable system, but, that is likely to be the privilege of the wealthy few. This compromise is a ‘fudge’ which leaves most people stuck with the existing muddle.

Julian Lipson is a family law partner at Withers