The Law Commission has recently published its recommendations to assist couples reach financial agreement following their divorce or civil partnership dissolution.
In a report on the reform of matrimonial property laws, the commission calls for the introduction of standard formulas to help resolve disputes over financial settlements and publication of official guidance on what constitutes legitimate ‘financial needs’.
Currently, judges have a very wide discretion when deciding what should happen to a couple’s finances when they divorce. These decisions are based on many different factors including the length of the marriage, ages of the couple and financial needs of both parties and any children. In effect, this means that the outcome is often very uncertain and difficult to predict.
It is hoped that the proposed guidance will serve to explain the outcome a judge would aim for in determining a settlement and that this will have the effect of achieving consistency across different courts, making settlements more predictable.
A further recommendation of the Law Commission is the introduction of legally binding ‘qualifying nuptial agreements’ in place of full prenuptial agreements.
Qualifying nuptial agreements would allow both married couples and civil partners to make a mutual agreement on how their finances or property should be divided if they split, but they would only apply after the financial needs of both partners and their responsibilities towards any children had been met. In addition, such agreements would only be legally binding if both partners had disclosed all relevant information about their financial situation and had received legal advice.
The recommendations will undoubtedly be welcomed by couples seeking clarity on what would happen to their assets upon divorce or dissolution. In what is understandably a very stressful time, the added uncertainty that currently exists only adds to the worries many couples experience.
As a family lawyer, these reforms will also assist in being able to advise clients and tackle the confusion that currently exists. The recommendations do not propose a radical change, but they do provide a solution to an existing problem. By providing this additional information the Law Commission hope to simplify the current system and this can only be welcomed.
Before becoming law, the Law Commission recommendations need to considered by the Government. It is not the first time that the Commission has made recommendations in this area and it is to be hoped that the Government agrees this sensible change of law and brings forward legislation on it for consultation.
By Ian Brunt, Lancashire Divorce Lawyer