It has been reported that the current 50-year-old laws in respect of how assets should be fairly distributed when couples divorce may be rewritten to make the overall process simpler and quicker, thereby reducing the legal costs involved.
MPs are currently in the process of commissioning a comprehensive review of the Matrimonial Causes Act 1973 (“the Act”). Under this legislation, many have argued that there is a lack of clarity in respect of how matrimonial assets should be split, which often means that parting couples turn to costly Court proceedings.
This follows comments made in the House of Lords by Lord Christopher Bellamy, justice minister, last week in which he stated that he would be requesting that the Law Commission undertake an examination of the Act to see whether it needs to be updated. He said:
“The Government thinks that the Law Commission is best placed to investigate all these matters, establish what the existing law and practice is and where the problems lie, and make comparative studies of various other jurisdictions, including Australia and elsewhere, as has already been mentioned.”
Peer and divorce lawyer, Baroness Fiona Shackleton, commented in the House of Lords earlier this month that the current system was “hopelessly” outdated as it relied “entirely on finance and the discretion of judges”.
How are matrimonial assets currently split between divorcing couples?
Section 25 of the Act sets out the basic guidelines that the English and Welsh Courts must apply when dealing with financial claims involving property, savings, pensions, and maintenance. There are no rigid rules regarding how the combined wealth of a divorcing couple is distributed and the Courts have wide discretion and flexibility. Whilst, therefore, the starting point is a 50/50 split of the matrimonial assets, there are numerous reasons that may justify a deviation from equality.
What are the problems with the current system?
As current legislation allows the Courts to use its discretion to assess each case and make different awards, this has led to complaints that this approach creates uncertainty in the majority of cases and that it is therefore difficult for lawyers to advise their clients on the likely outcome of their case.
In many European countries, where one person is deemed to be the breadwinner, the financial awards to the other person tend to be less generous and maintenance is likely to be given for a limited period.
In recent years, the UK has been a popular destination for many high-value divorce proceedings being brought by wives due to the financial awards they are likely to receive.
There have also been references to regional variations in how assets are distributed, with many Courts outside of London tending to give “time-limited” maintenance to parties who are perceived as being financially weaker. In London, the Courts tend to award more generously.
In comments made to The Financial Times, Chair of the family law reform group for Resolution, Jo Edwards, said:
“There are undoubtedly areas which need greater clarity such as spousal maintenance payments — whether any should be paid and if so, how much and for how long.”
Comment
The proposed review is a very welcome one to family lawyers and their clients alike.
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