Law Commission Scoping Report on Financial Remedies on Divorce concludes the law needs reform

The Law Commission published its Scoping Report on Financial Remedies on divorce in late December 2024 - just in time for some light Christmas reading (all 373 pages).  It is a must read for every Family lawyer and will no doubt stimulate debate for months (and years) to come. 

In summary, the report says that the current law for determining how finances are dealt with on divorce contains no purpose or objective and simply reading the legislation does not explain how the courts apply the law. The case law that has developed over the last twenty-odd years provides a gloss on the legislation as a guide to the approach that should be taken, but the court still retains a wide discretion. The report concludes the current law is uncertain and difficult to understand, meaning divorcing couples struggle to apply the law without legal advice and even when lawyers are involved the discretionary approach means there can be a divergence of opinion. This is unsatisfactory and does not provide a framework for a couple going through a divorce.  

The Law Commission has suggested four models of reform: Codification, Codification Plus, Guided Discretion and a Default Regime. 

• Codification would put the current settled case law on issues such as needs, sharing and compensation and the concepts of matrimonial and non-matrimonial property on a statutory footing but otherwise would leave the law largely unchanged and there would remain a large degree of discretion. 
• Codification Plus would put current settled case law on a statutory footing but also codify aspects of the law which are not settled, such as the treatment of nuptial agreements and spousal maintenance.  While Codification Plus would further clarify aspects of the law, the court would still have a wide discretion. 
• Guided Discretion is a model which seeks to give more guidance to the courts and those applying the law without legal advice. The aim here is to retain the court’s discretion but with a clear purpose of the law and principles on how discretion should be applied. Such guidance and principles would be in addition to the current legislative factors the court takes into account.  
• The last model outlined in the report is the most certain and has the least discretion. This would require a complete change to the current legislation and the adoption of a Default Property Regime. This would create a set of rules that come into effect on marriage which determine how property is dealt with during a marriage and on divorce. The Default Property Regime is likely to be a community property regime most likely to be “community of acquests” where property acquired during the marriage is shared and property acquired prior to the marriage is kept separate. It would be possible for a couple to opt out of this regime. As the regime would create a firm set of rules, it should be easier for a divorcing couple to understand how finances are divided on divorce. The potential downside is the lack of discretion which may mean that it is harder to achieve a fair outcome. The report says that this can be ameliorated by the application of other “pillars” of a property regime such as payment of maintenance and having specific rules relating to the family home. 

The Law Commission also considered that as part of an overhaul of financial remedies on divorce, the law relating to nuptial agreements, maintenance, financial provision for children over 18, conduct and pensions should also be reviewed. 

The report does not make any specific recommendations and it is for the Government to consider whether further reform work should be conducted. If the Government does ask the Law Commission to make recommendations for reform, this will not happen quickly and will likely take many years. In the meantime, divorcing couples will have to continue grappling with the current law despite its shortcomings. 

I, for one, hope the Government will take steps towards reform and in the interim provide more readily available legal information and guidance to help those going through what is undoubtedly one of the most distressing life events. 

Half a century after the passage of the 1973 Act, the Government asked the Law Commission to review whether the current law is working effectively, and delivering fair and consistent outcomes for divorcing couples.

https://lawcom.gov.uk/project/financial-remedies-on-divorce/