Divorce laws on dividing wealth to be rewritten
Laws on dividing wealth between divorced couples are to be rewritten to make it easier to avoid costly legal battles.
The current arrangements have been criticised as costly and unpredictable, with spouses often turning to expensive litigation because of a lack of clear guidance on how wealth should be split.
Now the Government is in the process of commissioning a thoroughgoing review of the 50-year-old Matrimonial Causes Act.
Lord Christopher Bellamy, justice minister, told the House of Lords that he plans to ask the Law Commission to examine whether the act needs updating.
He said: “The Government is in close consultation with the Law Commission, which we consider the most appropriate body to carry out that review. These matters will be considered fully in a forthcoming review, hopefully by the Law Commission.
“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.”
'Guidelines 50 years out of date'
The English legal system tends to split the combined wealth of divorcing spouses equally even if one partner is the breadwinner, in contrast to many other European countries, where financial awards are far less generous and maintenance is only given for a limited number of years. However, under the current law, spouses who go to court can spend thousands of pounds on fees because legal aid is no longer available for most types of family law, and the drawn-out court battles can be detrimental to children.
The current system has seen London become a top legal destination for wealthy ex-wives seeking a divorce, drawn by the generosity of financial awards given by the courts in the capital.
Baroness Fiona Shackleton, a peer and leading divorce lawyer whose clients have included King Charles, Princess Haya and Paul McCartney, said in the House of Lords this month that the law relied “entirely on finance and the discretion of judges” and was “hopelessly” outmoded as a result.
“Divorce practitioners like me make a fortune in arguing, because the guidelines are 50 years out of date,” she added.
Judges use discretion
Following a key 2010 ruling in the Supreme Court involving German paper industry heiress Katrin Radmacher, prenuptial agreements specifying how assets are to be divided when the marriage ends are now recognised by the courts.
However legal experts believe these contracts should be put on to a more formal, statutory footing and enshrined in law.
There are also complaints that the legislation allows judges to use their discretion to assess each case and make different awards, creating uncertainty.
Lawyers say the variation in judgments over the allocation of settlements makes it difficult to advise clients about the likely outcome of their case.
They also highlight regional variations, with London courts tending to award more generously, while many outside the capital prefer to give “time-limited” maintenance to financially weaker spouses.
There are also claims that women have become more financially independent over the past half century, with dual earning couples becoming the norm.
Jo Edwards, chair of the family law reform group for Resolution, which represents family justice professionals, told The Financial Times: “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.”
The Ministry of Justice said it could not add to Lord Bellamy’s comments at this stage.