Money and divorce

Baroness Deech

After two years of work – and decades of studying and lecturing about the subject – I have finally introduced my private member’s bill, the Divorce (Financial Provision) Bill.  It is about the division of money and assets on divorce (and on the dissolution of a civil partnership as well). The basic law on this has not been debated in Parliament for 30 years, during which time we have experienced profound changes in society (women at work, divorce itself no longer based on fault, and commonplace, civil partnerships and same sex marriage.) The basic law about dividing assets is in s.25 of the Matrimonial Causes Act 1973, which lists the many factors that have to be taken into consideration by the court, and which has been amended to take into account pension sharing and the desirability of a clean break in the financial relationship between the ex-spouses. There are so many factors that have to be taken into account that decisions have become unpredictable, and the judges have tried to update the law, in the absence of Parliamentary reform, by introducing principles of general applicability.  They used to say that “need” was the main consideration; then in an attempt to keep up with the times, the principles of “compensation” and then “fair shares of the partnership” were superimposed by judges. This has made it very hard to predict quite what one might expect to get from the family assets on divorce, and it is said that different judges in the various regions of the country come to different conclusions. Lack of predictability makes mediation and settlement out of court harder. The last straw is the removal of legal aid from this area, with a resulting great increase in the number of spouses having to represent themselves in court at one of the most troubled times in their lives, with consequences that will affect the rest of their lives.

I have looked at all the proposals made over the years and at the law in other countries. London is called the “divorce capital of the world” because awards to wives are more generous here than they would be anywhere else, and until recently our courts did not treat as binding any agreements the couple might have made before or during the marriage to organise their own division of assets. In a nutshell, my Bill would make such prenuptial and postnuptial agreements binding (with certain conditions to ensure that they are properly understood and entered into freely). Most couples probably would not want to make them when they are engaged, but those who have been married before and want to preserve assets from their first marriage for the family of that marriage might well avail themselves of the opportunity. My Bill would also introduce the system which prevails in Scotland and much of continental Europe and N. America, sometimes called the “division of postmarital assets” – that is, the norm would be a 50-50 division on divorce of all the property that the couple acquired after they were married. Not what they owned before the marriage, not inheritances and gifts and not what they agreed to exclude. I have not got the space to go into the details, but it ought to be a fairer, cheaper system, and it ought to help to reduce the vast amount spent in legal costs in fighting over ownership of the property on divorce.

As a private member you get hardly any help with drafting. It is a very skilled activity, way beyond my capability, and it was hard to find an expert to help me, but I did. I am fortunate in that I have a slot for the Second Reading, the initial debate on the principles of the Bill – but it is on a Friday afternoon and I fear that many peers who have something to contribute will be unable to attend. It would be a major achievement to persuade the government to take up the cause of reform, and to do it promptly. And it would benefit the public if they were able to discover what the law was and how it might apply in their case without having to go to court. Delay, hostility and expense are not good for the children caught up in it all.

To be continued, I am sure.

9 comments for “Money and divorce

  1. Howell of Trent Valley
    16/06/2014 at 6:57 am

    The Baroness gives excellent credit to the profession, and vocation, of Law.

  2. maude elwes
    16/06/2014 at 8:53 am

    Whilst I feel this would be an excellent update to the financial settlement issue after a divorce or long standing relationship, 50/50 being absolutely right from all points of view. However, I’m doubtful about the matter of its resting on ‘money amassed after the union.’ It does indeed sound good and fair, until you look into the shenanigans of people well off enough to have accountants and advisers who can so quickly and easily reduce any ‘so called’ after marriage earnings to zero with the click of a switch. Which ultimately will effect far more women than men.

    Something doesn’t sit right with that. The praying of old men with means on the barely out of her teens woman whose only asset is her beauty, uses her until the sheen departs the skin, and then complains, ‘I inherited all my worldly goods, this strumpet deserves nothing.’ Look at the 71 year old, ‘Jumping Jack Flash,’ with the latest naive 26 year old ballerina. Do you really believe she will fair well once he finds yet another girlie thrilled by his God like fame? There she is believing she is the paragon who will once and for all be able to tame him. ‘Surely his libido will have waned enough by now,’ she muses. Silly girl. He is already a known denier of his offspring and of marriage vows taken on small idyllic islands abroad. Come on, Baroness, you are a clever and savvy long term law gamer. You must know the ones who will do anything rather than face the humiliation of feeling ‘others’ or even him/herself will say, she/he only married him/me for his/my fame and or money. And that also goes for the children not in favour with the ‘King/Queen’ in such situations.

  3. MilesJSD
    16/06/2014 at 10:25 am

    This issue,
    in essence rooted in the shifting-economic-sands of Contractuality rather than of Life and Love Covenance
    between parents, offspring, and “society”
    [not to necessarily involve “God” at all]
    surely needs to be continued.

    And of course its overarching and underpinning “Mother” and “Father” Issues, (one sickening-instance of which I wish to mention below),

    surely also need not only continuing
    but publicly-broadcasting and worldwide participatory scrutinising, discussing; and (last-of-all) debating.
    ————-
    One not complex but always “too difficult”, “silly”, or “simplistic” issue is
    “Why should any individual human-being
    ‘need’
    two or more human-livings from the Common-Purse and from the Common-Earth-Environment ?
    [On top of all workplace/business expenses being already paid by their Employer]. ”
    ————–
    As intimated, the marriage-contract can be terminated, bought-off, broken, faulted-upon;

    whereas a Covenant is unwritten, and is unquantifiable, yet is often practically proactivated as real-life love, qua “one hand washes the other”, between members of a family.
    ————
    Another inhibitive ‘Gordian knot’ within the Money and Marriage Record is that of
    “purposes (individual)
    pro
    or
    versus
    Purpose (Longest-Term; or God’s)” .

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  5. Baroness Deech
    Baroness Deech
    30/06/2014 at 3:30 pm

    I find it reassuring that one (so far only one!) practitioner is sounding rather panicked about law reform that might make the law cheaper and clearer. Of course the Law Commission has recommended a change in the law. There is a draft bill attached to their report. But waiting for them to complete their work on property may take years, and in every year that passes another 200,000 or so people and their children go through the misery of dividing up assets on divorce. It is for Parliament to decide what to do, in the public interest.

    • Ann Mallaby
      13/07/2014 at 7:49 pm

      If pre-nups are binding, business partnership agreements should be too (being governed by the Partnership Act 1890 in the absence of a written contract). In cases where divorcing business couples hold equal shares and there is no need to vary those shares, why are they denied access to the chancery courts to wind up their business affairs? As LJ Thorpe rightly commented in the Court of Appeal (White v White, 1998), “much anguish and considerable legal costs would have been saved” had the partners simply followed the winding up procedure.

  6. maude elwes
    01/07/2014 at 5:05 pm

    It strikes me that people in this country like to shoot themselves in the foot when it comes to the realistic machinations of marriage and divorce. The lawyer above certainly was worried about how she was going to string out an adversarial divorce if it was established that the law was for equality regardless. Either that or she had made far more than her other half and could see it may lead to her losing some of it she it go to a divorce court.

    Fifty/fifty works pretty well in California. Which is why so many UK divorce seekers are terrified if they marry an American who wants the settlement arranged in their home State. I will never understand why Jerry Hall had hers heard here. I know I would not have. Or, come to that, Diana, Princess of Wales. Although her difficulty would be as a UK resident and her then husband a powerful family member. From my point of view, these women both got very poor deals. I wonder why the British feel so undeserving when it comes to their rights as human beings?

    http://www.divorcenet.com/states/california/cafaq03

  7. David Cooper
    07/07/2014 at 11:14 am

    Dear Baroness Deech

    I am delighted that, finally, someone in a position of importance and respectability has recognised hw unfair the current system is.

    To cut a very long and painful story short:

    I divorced 4 years ago; th judge awarded my ex-wife the full proceeds of the marital home plus most other assetts totalling approx £250k leaving me with nothing accept £30k from my endowments as a deposit for a new property. Living in the south east, I now have a new mortgage of £250k whilst my ex-wife has a 3 bed house with no mortgage. As my earning are 65k pa net, I was also ordered to pay her £1,200 per month for 3.5 years. However, now that time is up, she is taking me back to court to have the period of spousal maintenance extended ‘for life’ as she claims she is depressed and cannot work. A psychiatrist (expert witness) has confirmed she is ‘depressed’ but only concludes this by administering a self-assessment questionairre that can be falsified by the patient by exagerating the answers. My barrister does not hold out much hope and believes the judge will award her further maintenance even though the original term was for 3.5 years. This will basically condone her not wanting to work or get a full time job whilst I work 45 hours a week and commute for upto three hours everyday! I know her well enough to know she is exagerating the depression and I have evidence to show what a liar she can be but none of this is considered applicable.

    I hope and prey that your bill goes through as the current system is abhorrent.

    Thank you for representing those of us that suffer due to this outdadted legislation.

    Dave Cooper

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