Divorce (Financial Provision) Bill [HL]
That the Bill be now read a second time.
My Lords, this Bill would replace the current system for splitting money on divorce, a system that is past its sell-by date, with a tried and tested system modelled on that used in Scotland and in most of Europe and North America.
In the world beyond this Chamber, family law and its shortcomings are daily fare. I am a devotee of “The Archers” and regard its storylines as good indicators of common concerns. For those of your Lordships who do not listen, I should explain that the following issues are ongoing: a no-fault divorce between Alistair and Shula; surrogacy for Ian and Adam; residence rights for Will; marriage versus cohabitation for Fallon and Harrison; and a prenup for Justin and Lilian. It is all over the television. The Times has taken up the causes: no-fault, money, prenups and cohabitation.
The outgoing President of the Family Division, Sir James Munby, has allowed me to say that he favours reform. The noble and learned Lord, Lord Mackay, the noble Baroness, Lady O’Cathain, and the noble Lord, Lord Grade, do too, although they are unable to be here.
Several judges of the Supreme Court are family law specialists and their decisions regularly, but sadly, make headlines. I say “sadly” because some obvious outcomes, such as one spouse not having a lifelong claim to a fixed share of the earnings of the other ex-spouse, are costing hundreds of thousands of pounds to determine. Other factual situations present themselves, such as no-fault divorce and how many times a former spouse can come back for more, which one would have thought were resolved but which were not, and the outcome is anyone’s guess. But the Government are doing nothing and, for decades, have not taken up pressing issues in family law apart from procedural ones. That is shameful, not just because the lives of ordinary couples and their children are laid waste by the costs and the bitterness and uncertainty of the law but because it has gone so far as to offend against the principles of the rule of law, as expounded by the late Lord Bingham.
In my speeches on this Bill, most recently just over a year ago, I have set out the relevant uncertainty, unpredictability and inaccessibility of the law, largely judge-made, despite the existence of a statute of 40 years ago intended to clarify matters. But the rule of law requires that the law be accessible, intelligible, clear and predictable. Issues should be resolved by application of the law and not by discretion. Means must be provided for resolving disputes without prohibitive cost or undue delay. The procedures should be fair. The current law, based on Section 25 of the Matrimonial Causes Act and as embroidered by judges for over 40 years, fails all those tests.
It is nothing to be proud of that the wives of wealthy men come to London from all over the world for a generous settlement, giving the city the title of “divorce capital of the world”. It is nothing to be proud of that, in many cases, the legal costs of resolving the finances eat up half or more of the entire assets available to a couple, depriving their children of what should be their future stability. In a recent case about a £30,000 annual award to a child, £295,000 of costs were accrued. I note also the case where the husband was awarded £50,000 but was left with a bill of £490,000 in costs, and the case where the costs swallowed up the entire assets.
It is nothing to be proud of that judge-made principles, as they strive to keep up with their view of societal changes, swerve from compensation to need to fair sharing, so that proper advice and predictability fly out of the window, as the noble Baroness, Lady Shackleton, will tell you. As lawyers grope for guidance, statements in judgments are parsed as if they were statutory provisions, with surprising outcomes. It is nothing to be proud of that financial issues may take years to resolve after the divorce is finalised and that an ex-spouse can return to court for a fresh award decades after the divorce.
It is nothing to be proud of that children are not only deprived by this state of affairs but that basic child maintenance is not well enforced and that the statutes that might give children more protection are not fully explored. My Bill would apply to all marriages and civil partnerships. It does not seek to change the law on child support, which remains vital and underenforced. I wish that the lawyers who campaign for no-fault divorce would campaign as strenuously for child support. My Bill would strengthen the position of children by requiring consideration of children’s housing to the age of 21, bearing in mind the increased rates of higher education and staying at home. It would make prenuptial and post-nuptial agreements binding as long as the parties had independent legal advice.
We hear much now about the desirability of no-fault divorce. That idea—a quick divorce without attribution of blame—places squarely on the table two irreconcilable notions. What is the point of fault-free divorce if the couple then spend years fighting over their money, with much more bitterness, expense, waste and loss to their children than ever was caused by the actual divorce petition? If it is sensible to recognise that a marriage may break down without fault, what rationale can there be for expecting one of the former spouses to continue to maintain the other for years and to give him or her half their pension and sometimes the home? The only rationale is, quite rightly, protection of the children.
As the Law Commission said in its 2012 report on this issue:
“The situation facing family judges has therefore been likened to that of … a bus driver who is given a large number of instructions about how to drive the bus, and the authority to do various actions such as turning left or right. There is also the occasional advice or correction offered by three senior drivers. The one piece of information which he or she is not given is where to take the bus. All he or she is told is that the driver is required to drive to a reasonable destination”.
The Law Commission recommended that prenuptial agreements should be binding and that the old bias against them was ended in the Supreme Court decision in Granatino. However, so many conditions are attached to their binding nature by the Supreme Court that couples now spend a fortune on litigating over whether or not the prenuptial agreement is in fact binding. A recent example is the case of BN v MA, where the prenup was upheld but the costs of doing so were £400,000, and another where it was largely overridden so that the husband was awarded £1.7 million for a house but the legal costs were also £1.7 million.
My Bill would put prenups on a statutory footing, with few conditions except those that normally apply to avoid fraud and duress in contracts. It may not quickly become the custom in this country for engaged couples to enter into such a contract, although it is de rigueur in most of continental Europe. For older couples who would like to enter a second marriage but are fearful that if the second marriage went wrong the children of the first marriage would lose out to the second husband, the ability to sign a prenup would allow them to marry with reassurance that the children would be protected and would not lose out.
Countries which allow prenups do not have higher divorce rates than we do, an argument put forward by those opposed to them. It seems to make little difference. Giving them statutory force would have the advantages of improved predictability of outcomes, meeting public expectations that they can make their own arrangements and maybe encouraging marriage for those who, with past bad divorce experience, may be reluctant to commit again to a potentially financially ruinous legal situation.
The main provision of my Bill is that it would introduce the well-known system elsewhere in the world of a fair starting point as the equal division of all the property and pensions acquired by the couple after marriage. It would exclude premarital assets, inheritances and gifts. There is flexibility in the Bill to allow the house to be retained for the accommodation of, for example, a mother and children, and to disentangle the situation where premarital assets are used to buy and improve marital property.
The noble and learned Lord, Lord Hope, criticised the Scottish law in the case of Miller as lacking inflexibility, but the recent report on the Scottish law by the University of Glasgow has reassured him that there is enough flexibility but still enough certainty. Provision is made in my Bill for maintenance of up to five years unless there is exceptional hardship, following Scotland and most of the rest of the world. Property, pensions and lump sums may provide more efficiently for the support of a woman who cannot or will not work.
This brings us to the nub of the changes in society which this Bill is trying to address. The law for centuries has seen all women as dependants, certainly once they marry, tied to their husband’s financial situation and social status for ever, regardless of the nature of the breakdown or her own capacity. In brief—noble Lords know the social changes all too well—72% of mothers go to work, according to the Institute of Fiscal Studies, whereas in 1975 only half did. Women’s education and career prospects, equal opportunities and pay law have driven this, and two-earning couples have become the norm.
However, to the law, this is unknown. There is a thesis to be written about the absence of the modern working woman from family law. Women with no children and with grown-up children are still treated as incapable by many of our judges, although the recent judgments of younger judges show a growing realisation of the change. Those younger judges need encouragement to stick to their guns with a change in the law.
There are those who will say that women suffer in the workplace and from childcare, and that men should continue to make it up to them for the rest of their lives. As long as judges accept as reasonable the demands of some women on divorce for millions and of many more for ongoing lifetime payments, then subconsciously or consciously male employers will never take women as seriously in the workplace as they should. The majority of women who work feel downgraded and belittled by the alleged helplessness and unreasonable demands made by some. Extreme handouts to divorced wives do nothing to help unmarried women and single mothers who are making their own way in the workplace. Women are not all victims, they are autonomous, and sometimes they have to make over property to less well-off husbands on divorce regardless of behaviour. Of course the law is equal, but the attitude of judges is not.
This brings me to the objections to any reform at all by the family law Bar and the objections to some reforms by solicitors. It is similar to the lawyers’ opposition to the Civil Liability Bill. As Mandy Rice-Davies so famously said, “They would, wouldn’t they?” Or, as an experienced judge put it to me, the Bar is blinded by its own self-interest. It is wedded to the system, as are some judges, because it believes that it is doing a good job. It is, within existing parameters, but at a terrible cost, for hundreds of thousands of pounds—which divorcing couples need—are spent on legal costs. The Bar objects to any changes because most couples reach an agreement without going to court, at great cost and because the expense of seeking what they see as fair is prohibitive. In the local family court, I have seen those poor couples who have no legal aid and representation on only one side. “That’s £50,000 costs chalked up already,” says the genuinely helpful judge, “and if you cannot reach accord today, in the little room at the end of the corridor, it’ll be another £25,000 if you go to another judge for further determination”. They settle because of the unpredictability of the next judge, as the noble Baroness, Lady Shackleton, will tell you.
Another report on the Scottish system, which forms the basis of my Bill, points to a far higher rate of negotiated outcome there because of clear guidelines. The family law Bar points to the guidance for such couples, issued by the Family Justice Council. I have read all 72 pages of it. It would make a great graduate thesis on the law but I have never seen it cited in a judgment and it is far too complicated for a couple to use, setting out, as it does, all the twists and turns the law has taken recently. The Bar ignores the empirical evidence of the more successful and less degrading operation of the law in other countries and the fact that no action has been taken on the substance of the Law Commission proposals. What the Bar sees as fair is a far cry from what ordinary litigants see as fair and the Bar makes the assumption that I have already criticised of women as victims.
The Bill offers an off-the-peg solution. It will end the attitude of some judges that, since we all look better in Savile Row suits, there must be no Marks & Spencer ready-made. The Scottish law, very like European law—with which alignment is arguably more desirable than ever—has been reviewed after 30 years of operation. The Family Law (Scotland) Act 1985 was based on the work of the Scottish law commissioner, Eric Clive; Scotland has no-fault divorce and cohabitation law. The recent report, Built to Last, gives Scottish law a glowing review; in particular, it spells out how much better it is than English law—a view widely shared except by the lawyers at the English Bar. I give you just two comments from the report. First, the law in Scotland,
“has been successful in achieving one of its aims which was to encourage parties to reach their own agreements about the financial and property consequences of divorce”.
“English law is broken and needs mending: but ours doesn’t … generally speaking, it’s a gem”.
I am offering that gem, which will reduce trauma for children and the need to go to court, lower costs, put less stress on couples and enable a fairer outcome, recognising partnership in marriage. For the first time, it would recognise equality of spouses, rather than subjecting their claims to the view taken of them by the judge. The wife would no longer be a supplicant but a partner ending a partnership on an equal footing. Above all, it would be the result of democratic debate here for the first time in decades, and take account of public opinion—I cannot tell you how many sad letters I get about this—and the changing nature of marriage.
It is a disgraceful state of affairs when the Government —this one and previous ones—neglect family law, which affects hundreds of thousands of people and their children every year. I know that the Bill as drafted is not as satisfactory as it should be, being a Private Member’s Bill—I must thank the noble and learned Lord, Lord Walker, for helping me so much—but its principles are clear. It has support from around the House. I say this to the Government: do something. Take this over. It is a vote winner and it is the right thing to do. I beg to move.
My Lords, I speak in support of the Bill. I will be reasonably brief because it has been described so thoroughly by the noble Baroness, Lady Deech. She has shown great determination and perseverance with it. In fact, it is virtually identical to a Bill that passed through all its stages in this House in the last Parliament but, sadly, did not have time to make any progress in the other place.
It is a remarkable fact that in these days of constant change—in economics, social life and fiscal and other fields—the law on financial provision on divorce is still regulated, in substance, by Section 25 of the Matrimonial Causes Act 1973, a statute passed more than a generation ago. Section 25(1) gives priority to the claims of minor children of the family; no one seeks to alter that primary need in any way. The trouble is that Section 25(2) contains the other main guidance from Parliament, given in eight paragraphs with no sort of hierarchy or pecking order between them. They are eight remarkably dissimilar paragraphs. Some are totally unsurprising, for instance paragraph (d), concerning,
“the age of each party to the marriage and the duration of the marriage”.
Others are more debatable, for instance paragraph (g), which is concerned with,
“the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it”.
Some are simply the starting point of what may be an almost endless debate, notably paragraph (f), concerning,
“the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family”.
It is hard to imagine a wider or a more important judicial discretion. Some judges and practitioners—not all, but some—take the view that it all works perfectly well in practice. With respect, it simply does not. The Law Commission reports fieldwork studies showing wide variations in practice between different judges, groups of courts and regions of the country. General guidance may be given from time to time by the Supreme Court, but only the biggest of “big money” cases get to that court and they are by no means typical.
Big money cases often incur very high legal costs, but even much more modest litigation about financial provision on divorce, as the noble Baroness mentioned, can be a heavy burden on ordinary families at a time when they are likely to have all sorts of extra costs to face. Legal aid is no longer available except for issues involving minor children or in cases of domestic violence. But at present the uncertainty of the outcome drives many parties to litigation. Divorce is often traumatic enough without the whole family’s resources being depleted by legal costs of the scale that has been mentioned.
I referred earlier to the Law Commission’s conclusions about whether the present law is predictable. I should add that the Law Commission has strongly recommended that there should be a change in the law regarding what lawyers call prenups. The Bill contains provisions to that effect. I should say a word more about so-called prenups as I was a member of the Supreme Court, which heard the important case of Radmacher v Granatino about seven years ago. To go into the issue of prenups, as so often, involves a bit of history. Before 1857, divorce was totally different. It was dealt with entirely by the ecclesiastical courts. It was not really divorce at all; it was divorce in the Latin phrase, a mensa et thoro—from the board and the hearth. It was much more like judicial separation. In those days, when marriage was indeed regarded as indissoluble, it was not wholly unreasonable that a doctrine arose that it was contrary to the public interest for parties contemplating marriage to enter into an arrangement as to what would happen if, finally, sadly, they separated. It was regarded as a bad thing that they should be thinking about that at all at that stage.
Now that we have had true divorce since 1857—some 160 years—it is less and less sensible to regard it is somehow contrary to the public interest that parties contemplating marriage should consider the prospect, however remote they hope it is, that something might go wrong. But it was not until the important case of Radmacher v Granatino that the Supreme Court decided that the notion that it was contrary to the public interest should disappear. Even so, it simply meant that the court could take account of the provisions of a prenuptial agreement and were not in any way bound by them.
Radmacher v Granatino was a quite remarkable case because Mrs Radmacher was a German national from a very rich German family and almost certainly still had a German domicile although she was living in London, and Mr Granatino was a French national and probably still had a French domicile. It was therefore odd. The noble Baroness referred in another context to London becoming the divorce capital of the world. Mrs Radmacher was advised that if she went back to live in Germany for quite a short qualified period of I think about six months, her divorce would have gone through on the strength of a very strong binding prenuptial agreement that she entered into with her husband in Germany. Surprisingly, she decided to continue the proceedings in this country and must have spent millions of pounds before her eventual victory in the Supreme Court, and then only on the basis that it was possible for the court to take account of the prenuptial agreement rather than being in any way bound by it. That would be dealt with by the Bill.
It is regrettable that the English Law Commission felt unable to recommend other changes to the law because of continuing lack of consensus across the country as to what they should be. On a subject of such general importance, it is understandable that the Law Commission should want to act only on a clear consensus. But change is long overdue.
Many of the Bill’s provisions reflect those which have now been in force in Scotland since 1986, the 1985 Act having come into force straightaway the next year, with minor changes in 2006 to reflect changes to the permitted grounds for divorce in Scotland. A key feature is that only “matrimonial property”, as specially defined in the Bill, is available for division between the parties. The Scottish Law Commission, unlike its English counterpart, has at all stages strongly supported the new Bill in Scotland. The general view appears to be that the provisions in Scotland are working well in practice. That was the main conclusion of a thorough survey conducted in 2015 by a team at the University of Glasgow led by Professor Jane Mair.
The House will want to look closely at the definition of “matrimonial property” and other key features of the Bill, but at this Second Reading stage, I invite your Lordships to say simply that, after 45 years, the time has come not only to sanction prenups but to make radical changes to the very wide and unfocused judicial discretion that is, sadly, a feature of Section 25(2) of the Matrimonial Causes Act 1973.
My Lords, I thank the noble Baroness, Lady Deech, for the time and energy that she has devoted to bringing this Bill before your Lordships’ House. As a practising divorce lawyer for nearly four decades, I want to register my total support for this legislation, which is long overdue, and I beseech the Government to do something about the existing sorry state of affairs. Practising in this field, I see people entering this area of litigation become victims of a statute that is no longer fit for purpose and which leaves too much discretion in the hands of the judges who apply it.
I have recently been reading a little book by George Mikes called Wisdom for Others. I alighted on a vignette about divorce. It was written in 1950, but could be equally applicable today. I quote from it:
“Once when I was about 12 I read a story in a boy’s paper about a big dance to which people were invited by huge posters with the announcement, ‘No Entrance Fee’. Many went, danced and enjoyed themselves then, on leaving, they were stopped at the door and requested to pay. ‘What do you mean? We were told there was no entrance fee’. ‘That’s quite true’, was the answer, ‘there was no entrance fee, but there is an exit fee’. I considered that story at the time silly. Silly indeed it was, but impossible? Look at the marriage laws of modern civilised countries, especially in the Anglo Saxon ones. There is no entrance fee but there is a terrific exit fee—financially as well as emotionally”.
To develop this line of thought, say it was worse than simply finding out that no entrance fee did not necessarily mean no exit fee, and that you knew that, in all likelihood, you would be charged, but what? Imagine if the level of the exit fee depended on the discretion of the person employed on the gate to levy it—let us call him the bouncer. On some nights leavers could be favourably treated, with perhaps a reduction for those over a certain age, or for couples who danced beautifully. On other nights, leavers could face far harsher treatment: perhaps a surcharge for failing to consume any refreshments. Such random increases or reductions in the exit levy are dependent on the identity and discretion of the bouncer, and nobody knows who the bouncer is until they get to the exit. Without meaning to sound at all disrespectful, substituting the bouncer on the gate for the judge in the divorce court brings us close to the sorry state of the operation of the law in the field in which I have practiced for so long.
As we have heard from the noble and learned Lord, Lord Walker, Section 25(2) of the Matrimonial Causes Act 1973, enacted some 45 years ago, gives the court almost total discretion in deciding the level and nature of financial awards on divorce. Judges can follow the letter of the statute but exercise their discretion in myriad different ways. It is not uncommon in High Court financial dispute resolution hearings, where a judge gives an early, neutral evaluation of the outcome of the case in the hope of encouraging settlement, for the parties to be told that there are mean judges and generous judges. That being so, and with parties perhaps not knowing until the day before the final hearing which judge is allocated to their case, it makes a great deal of sense to settle their case now, to get a result within their control.
I have done financial dispute resolutions where the recommended settlement bracket is wildly different from the trial judge’s ruling on identical facts. For example, the judges recommend that parties settle at 50%, only for the judge at the full trial a few months later to award the applicant 40%, or vice versa. Or the FDR judge says that a prenuptial contract is of no significance whatever, only for the trial judge and the Court of Appeal to find that it has magnetic importance. This disparity of judicial discretion, enshrined in an out-of-date statute, cannot be right or fair for the, sadly, very many couples engaged in matrimonial litigation.
The Bill of the noble Baroness, Lady Deech, seeks the production of a statutory framework to ensure a far more a reliable prediction of outcome. This would enable parties to reach an agreement soonest, as their lawyers could advise with confidence on the likely outcome, and the parties would be less likely to “roll the dice”. It would enable FDR judges or mediators to predict the outcome of a case with almost certainty, irrespective of the identity of the judge at the final hearing, and judges would have the comfort of operating within defined, determined and clear statutory parameters to produce more uniform judgments.
Having heard Professor Jane Mair speak about the Scottish system on which this Bill is based, I was overwhelmingly persuaded of that system’s infinite superiority. The appeal of predictability of outcome is obvious. The most difficult situation for most people to cope with in life is uncertainty. It may be true that many cases settle before a full trial, but the statistics do not mention the very significant financial and emotional costs involved in getting to the FDR. Because the ambit of judicial discretion is so wide, technicians practise the dark arts of minimising or maximising financial claims—depending on which side they are paid to argue for—as until the identity of the tribunal is known, it is not possible to know which arguments are likely to meet with favour. Sometimes the reasons for settling are akin to the television programme “Take Your Pick!”, where a contestant is asked whether they would prefer to take the money or open the box, the money being certain but the box—as in proceeding to a trial—being uncertain.
I recognise that I now specialise predominantly in high net worth cases, although I have in the past worked in a law centre and I take on non-high net worth, pro bono work. Where the asset base is lower and the legal cost often unaffordable or disproportionate, uncertainty of outcome is even more damaging. For example, it is not currently possible to predict whether an applicant—wife or husband—is entitled to maintenance payments for life or for a fixed period of time. This is quite a significant discrepancy, with huge financial consequences. Much depends on the postcode lottery. Anecdotally, the northern courts seem to prefer the applicant to get back on their feet and become financially independent. The southern courts seem more indulgent. Uncertainty of outcome leads to delay in settling cases. Delay in getting a court hearing not only has financial implications—money being wasted on costs unnecessarily—but a huge emotional effect in what is already a traumatic time for families. Financial proceedings cause bitterness and rancour and often aggravate the ability of parents to co-parent effectively. Children are damaged and become the unwitting victims of uncertainty and delay in resolution.
There is a further reason why I support the Bill. The appeal process has recently been changed. A request for permission to appeal from a High Court judge to the Court of Appeal is now to be considered by a single justice, often from the Family Division. If the single justice does not give leave, there is no right for an oral hearing to argue against the single family judge’s decision. This is the Family Division marking its own homework. Potential appeals will be blocked—appeals often being the lifeblood of change and clarification. Historically, when brakes have been imposed on the exercise of extensive lower court judicial discretion and “impermissible gloss” on the interpretation of the statute reined in, more often than not that is not driven by the family judges but predominantly by the non-family judges. It is often the latter who correct what they perceive as a misrepresentation of the law as applied by the lower courts, and create new law.
In the then House of Lords judgment in the ground-breaking case of White, the overriding application of the “reasonable needs” concept, liberally applied and developed over many years, was summarily replaced by the principle of sharing and a seismic change in the way that finances were divided on divorce. In 2010 in Granatino v Radmacher, to which the noble and learned Lord, Lord Walker, has already referred—I represented Mr Granatino in that action—the Supreme Court held that in certain circumstances prenuptial agreements could be effectively binding, but to illustrate what I am saying the dissenting judge was the only family judge sitting on the panel which voted in favour of the application of the prenup by a majority of eight to one.
The Supreme Court and the Law Commission have favoured changing the current law in respect of prenuptial contracts but nothing has yet been done. Even if the law on prenuptial agreements were changed so as to make them binding so long as they were “fair”, it is the bouncers, with their ultimate discretion, who would then determine what is fair. To quote the Supreme Court:
“Then fairness, like beauty, lies in the eye of the beholder”.
I conclude as I began, with gratitude to the noble Baroness, Lady Deech, for introducing this Bill, which is long overdue and which I implore the Government to move forward on.
My Lords, I should perhaps begin by saying that I know a good deal less about this subject and its operation in practice than the noble Baronesses, Lady Deech and Lady Shackleton, matrimonial law never having been my special subject, either at the Bar or on the Bench.
Inevitably, however, I was involved in a number of cases that reached the courts including that most seminal of early pre-nuptial settlement cases, referred to several times already, that of Granatino v Radmacher —the title can be the other way round, depending on where you see the case reported. This was a case on which nine of us sat in the Supreme Court and all but one, the noble and learned Baroness, Lady Hale of Richmond, who is now of course the President of that court, gave substantially greater effect to such an agreement than the noble and learned Baroness would have given, although, as the noble Baroness, Lady Deech, has explained, we hedged it about with more qualifications than were no doubt necessary or ideal. That decision was, as the noble Baroness, Lady Shackleton, has made plain, contrary to the interests of her client, for which I suspect she has never yet forgiven us although I was glad to see that, as I understand it, she now supports Clause 3. My noble and learned friend Lord Walker of Gestingthorpe was also on the case, as he has said, and I take this opportunity to acknowledge his great skills as a legal analyst and draftsman although, like me, he was never a matrimonial specialist.
Tinker as one may wish to do with some of the details of this Bill, its essential structure is, I suggest, a model of sound parliamentary draftsmanship. On the substance of the Bill, there is really very little that I wish to say at this stage. The essential points have already been made. Many will be repeated, I expect, perhaps with fresh shades of lipstick, if that is not nowadays an impermissibly sexist metaphor.
Essentially this subject raises, as so many areas of law raise, the age-old tension between the competing interests on the one hand of certainty and predictability, and on the other of flexibility. Yesterday, as it happens, we discussed in this Chamber that tension in the context of the Civil Liability Bill, in particular as to the compensation for whiplash injuries. We are described as the whiplash capital of the world. Today, the same tension arises in the context of financial provision following divorce; again, we are described as the divorce capital of the world. What this Bill essentially aims at, just as yesterday’s, is to shift the balance rather further in the interests of predictability so as, among other things, to shorten, cheapen and hasten the resolution of disputes or potential disputes about the division of assets and so forth, when a marriage ends.
For all the reasons so ably and compellingly set out by the noble Baroness, Lady Deech, in her truly brilliant opening of this debate, I am persuaded that it is indeed now time to make this area of our law altogether more predictable than, alas, it has increasingly become over the 40 and more years since the 1973 Act. As to the specific rules, principles, policies, approaches—call them what one will—by which the Bill proposes to further this fundamental goal of greater predictability, I find myself in broad and substantial agreement with its provisions. I look forward to hearing the views of others on certain of the niceties of the Bill and I hope to have a clearer view of my own when eventually we come, as I hope we shall, to Committee. Meanwhile, I wish the Bill a fair wind onward.
My Lords, I thank the noble Lord, Lord Davies, for allowing me to continue in the order of proceedings. I commend the noble Baroness, Lady Deech, for her persistence in pursuing this issue over many years. I am also grateful for the clarity of the briefing that she has provided me with and for her acuity in setting out the purpose and objectives of the Bill so clearly and brilliantly today.
I am not an expert on the issue, but I reflected on it a little, particularly during the case mentioned by so many others today—the Radmacher case—which I recall very clearly. I say very humbly in front of two former members of the Supreme Court that I think the balance in the court’s ruling was correct. Otherwise, I am, I think, the first of the lay speakers to comment on the Bill today. The only interaction I have had with divorce in the past few years has been in the context of the Brexit negotiations; I recall taking issue early on with Michel Barnier when he referred to the Brexit negotiations as a divorce. I think I suggested that divorce law was on the whole rather more thought through than Article 50, particularly in the provisions relating to financial settlements and provisions. My committee, European Union Sub-Committee A, had to deal with that part of the United Kingdom’s settlement, and I can just imagine what it must be like for courts to have to adjudicate on the matters in the Bill promoted by the noble Baroness, Lady Deech. Perhaps the use of a lawyer or two might have benefited the drafters of that part of the Lisbon treaty.
Turning to the Bill, I am sure I am not alone in my frustration that the UK, mainly London, is seen as the divorce capital of the world. I read recently about a wealthy couple who had no relevant connection to the United Kingdom, other than that they had parked some of their wealth in London property. Now that they were contesting a divorce, the significant consideration for one of them to was demonstrate, through the ownership of a flat, that they had a connection to the UK. Their application would, if accepted, presumably lead to a more favourable financial settlement for that person, as opposed to one in the jurisdiction where they had a real and ongoing connection. Jurisdiction shopping in this area has much of the same unsavoury scent as tax evasion, both being the preserve of the global wealthy elite. As the noble Baroness, Lady Deech, said, London being seen in that light is nothing to be proud of.
I have a slight reservation about the Bill in that the financial interdependence of couples varies across such a wide spectrum, from those with modest means to those whose cases make the media—the fabulously wealthy—and between those who need clear and accessible law and those who can afford lawyers and accountants. I am slightly concerned that, in order to provide consistency and clarity in disputes, we are in danger of eroding judicial discretion to an extent that may be undesirable. I say “may be undesirable” with great qualification. My discomfort is particularly to do with the commodification of pre and post-nuptial agreements. I see from legal comment in the media that some advocates see that as the equivalent of taking out life insurance or writing a will. I think the expression used by a lawyer was, “It’s as normal as”. In the real world, I would argue, most people do not take out life insurance or write wills before their wedding day, and the binding nature of these agreements may deter couples at a time of hope and optimism in their lives. My question to the noble Baroness, Lady Deech, and indeed to the Minister, would be about the extent to which they see a need for a public information campaign about how these agreements work, and the importance of people understanding the implication of financial settlements on divorce before they even get married.
I also have some niggles with Clause 3. I do not have a problem with the binding nature of prenups and post-nups. I think their take-up is relatively limited—for good reason, as most people who decide to marry do so in the desire for a binding commitment to each other for better or for worse, rather than the contractual mindset of, as we have heard in several cases that have been mentioned, for richer and for richer, which are the ones that make the news. However, for prenups as described in Clause 3(1)(c), I am not entirely clear why there is a requirement that the agreement must have been made 21 days before. I assume that this is so that duress on the part of either party is ruled out but, if so, why 21 days as opposed to 30 days or any other timeframe?
The clause also calls for legal advice to have been obtained. I can see the reason for this but, in the absence of funding for independent legal advice, does it not serve as a disincentive towards prenups for those couples who cannot afford that advice? Are there practical suggestions for the Government to devise a toolkit or guidance that could serve as a generic format and be considered independent advice in the absence of a lawyer? I note that the Law Commission has recommended a divorce calculator, and a cursory search on the internet showed up a number of platforms offering calculations. The question would be about the reliability of those tools.
I am in broad support of the Bill. I look forward to its progress, which I hope on this occasion the Government will agree to support. I conclude with a couple of thoughts. Fairness is a difficult and complex concept, inevitably subjective and very dependent on individual circumstances. The important challenge in this area of law is to achieve certainty in general without complexity eroding the flexibility to account for the individual circumstances of the people involved. I think the Bill acknowledges that and, as I said, I look forward to its progress.
My Lords, I apologise to the noble Baroness, Lady Falkner, for having misread the Order Paper and inadvertently jumped the gun. I was in the process of trying to congratulate the noble Baroness, Lady Deech, on her work in this field and on an admirably lucid and, if I may say so, succinct Bill that she has brought before the House. I believe that she is performing a valuable service for the country, for the law and—I will explain what I mean by this in a moment—for Parliament itself. To my certain knowledge she has been engaged in work on this project for three or four years, and I hope that we are now getting to the point where eventual success may be within sight.
In my view, the present state of the law as has been accurately described this morning is, if I can put it in slightly stronger language than has been used, a rather discreditable shambles. The jurisprudence has wandered a long way from the original statute, which people take little notice of, and that jurisprudence varies quite inconsistently and incoherently from one case to another, as the noble Baroness, Lady Shackleton, has just said, from first hearings to appeal hearings and so forth. That is obviously an undesirable situation for everyone. The law in a free society should be something that everyone can understand. In the present situation in the matrimonial area, it is quite impossible for lawyers to give clear advice to their clients as to the likely outcome of different cases. The fact that it is very difficult to give such advice does not mean to say that advice is not demanded or indeed being paid for at a very high price in many cases, as we have heard, but that highly priced legal advice could be of little value in many cases because of the uncertainties in this area.
Incidentally, I praise the noble Baroness, Lady Shackleton, for the line she is taking on this, because, given her substantial practice in this area, her endorsement to the Bill displays an altruistic and self-sacrificial attitude, and it is admirable when one comes across that.
There is another problem about the state of the law in addition to those already mentioned—which I therefore do not need to go into. That is that the law in its present state has proved to be a valuable and useful instrument for unscrupulous people who want to exploit others by means of fortune-hunting. There have been many cases in the press which have received a lot of publicity, and the one which we all remember from a few years ago was when a woman who had practised for some years as a professional prostitute at quite a high level in the market succeeded in marrying one of the greatest and best-known singers in the world—perhaps the best-known—and clearly expected a considerable dividend from that. She waited for the two years which is not of course statutory but often appears in the jurisprudence to be sufficient to get the full payout and then sued for divorce. She got only £20 million, not the much larger figure that she was expecting, so there is something to be said for that. Nevertheless, I think that £10 million per year is quite good payment, even in that profession. It is not in the interests of the law that it should be abused in that obvious way, which is one more reason for modernising it.
I am delighted that the noble Baroness, Lady Deech, as part of her programme, intends to provide legal backing for prenuptial agreements. Some years ago, I tried in another place to achieve that. I introduced a Bill which received an unopposed Second Reading in the other place but, as often happens to Back-Bench initiatives, it did not make any further progress and I have been waiting for an opportunity to support someone else in the venture. I am delighted that that opportunity may now have arisen.
As the noble Baroness said, the inspiration for her Bill has been many cases in Scots law, which is of course a form of Roman law. It is therefore not surprising that the general picture to which she is looking for us to conform is familiar to the continent of Europe, because all those jurisdictions have provisions much like these. The Scottish position, which says that matrimonial property is property accumulated or acquired during marriage by the two parties, not property received as a gift or inheritance from outside or which is acquired by one of the parties before the marriage, is sensible, coherent and immediately understandable. It is nice to think that, if the Bill or something like it gets on the statute book, there will be a clear criterion of that kind which everyone will be able to understand.
I make one general point before I sit down. I do not think that Parliament is very good at one of its essential tasks, which is to keep the law up to date. We are actually quite bad at it. When you come across a case where the jurisprudence is out of line with the statute, that is always a warning signal. That means that, in principle, Parliament should be looking at it, but often we do not.
I shall perhaps shock the House by saying that one incident that caused me considerable concern was a change in the law relating to rape within marriage. Under traditional common law, rape was impossible if the parties were married. I disapproved of that and was very much in favour of the law being changed, but I was horrified that the law was changed not by Parliament but by jurisprudence. That was a fundamental change, it was a matter of principle, it was a 180 degree reversal of what had existed before. That seemed to me to be a decision which Parliament should be taking, not the judges.
Another case that shocked me very much relates to the law on the right to die Bill—not the Bill itself, which of course failed in the Commons recently, unfortunately, since I supported it strongly. That was the issue of what happens to relatives and close friends of people who are dying and want to terminate their lives more comfortably and rapidly by going to Switzerland or some other jurisdiction where it is allowed. Are the accompanying relatives or friends guilty of a criminal offence, of aiding or abetting suicide? That is a very important issue, raising all sorts of moral and social problems, as well as some technical, medical issues. It should have been debated by Parliament, and Parliament should have taken the decision. What happened there was even more shocking. It was not the jurisprudence or the judge that determined the issue but the prosecutors—the Director of Public Prosecutions. My right honourable friend in the other place is a man for whom I have the greatest regard, and I think that he took the right decision—but it was completely wrong to get to the point when prosecutors had to change the law. That must be wrong. So Parliament is not good at doing that fundamental job.
We have another case here in which we all agree that the situation is very unsatisfactory. I have always said that the situation is discreditable to Parliament that there should be such a mess as we find in this area of the law. It is very important that in future Parliament makes a conscious effort to do the essential job properly of revising the law from time to time, and not just waiting for the Law Commission to come up with proposals, because on occasions it is far too pusillanimous—and this is one of those occasions. It is our responsibility, ultimately, to decide these matters; it is not a responsibility that we have carried out very well but one that has certainly been taken up in the most proper and effective way by the noble Baroness, Lady Deech. I shall strongly support this Bill as it goes through its various stages, as I hope that it will from now on.
My Lords, I join others in congratulating the noble Baroness, Lady Deech, for her persistence and perseverance in bringing this Bill forward and for her very elegant opening speech.
I have not spoken on divorce in the House before, but on a number of occasions I have spoken about marriage and its place in society, including in a balloted debate just a few years ago. So many of our social problems are exacerbated by the modern frequency of divorce and the break-up of relationships outside formal marriage—key drivers behind poverty, child poverty, homelessness and housing shortages as well as loneliness and all the social and psychological problems that can follow from that. The impacts on children can be variable and are disputed, but nevertheless they are surely real.
Yet we have to be realistic: divorce happens and, indeed, can be the right way forward; perhaps it often is. There are few things worse than being trapped in an unhappy marriage, although I sometimes wish that people started out with a more realistic sense of the inevitable ups and downs, tensions and demands of marriage. A president of the Mothers’ Union was once asked whether she had ever thought of divorcing her husband. “Divorce? Absolutely never”, she said—“But murder? Really quite frequently over the years”.
The Christian church has found divorce a difficult subject. The view developed in the main western branch of Christianity represented by the Roman Catholic Church and those protestant churches that emerged from it, including the Church of England, was that a marriage, once solemnised, was indissoluble. Divorce or annulment were virtually unthinkable, other than in the most exceptional circumstances—as, indeed, Henry VIII was to discover. To this day, the official teaching of the Roman Catholic Church maintains that, unless a formal ecclesiastical annulment is granted, those who are divorced and remarried should not be readmitted to receive holy communion. I am pleased that Pope Francis is pushing back against this, amid a vigorous debate in the worldwide Catholic Church.
Through a rather tortuous process, the Church of England has arrived at an acceptance of divorce, to the point where those who are divorced are usually able to remarry in church, subject to certain pastoral conditions. I warmly welcome that. Indeed, in nearly 40 years of ministry, I have always been willing to avail myself of the provision in the statute law which permitted me to remarry divorced people in church. I recall 30 years ago being severely admonished by the then Archbishop of York for doing so. The secret of success in the church is sufficient insubordination.
Interestingly, the eastern Orthodox churches have always permitted the possibility of remarriage after divorce, because they have always taken a rather different view of the status of vows. In many ways, the western churches have been catching up with the long-established practices of the eastern churches.
I say all this as background to the Bill of the noble Baroness, Lady Deech, which I warmly welcome. I value the flexibility that our common law traditions give, but there must come a point, as others have said, when Parliament provides a clear legal framework when a great deal of case law has built up over a period of considerable social change. The general withdrawal of legal aid is an important factor here. Couples should be able to seek clearly in law the principles upon which their practical separation and divorce will proceed. We may regret that more people represent themselves to save on legal costs, but it is a reality that is unlikely to change.
I hope that the Bill reaches Committee, and I mention one or two issues that I suggest may need some further examination. I do not think that I have ever said before in your Lordships’ House, “I am not a lawyer, but”, although I have heard that introduction to quite a few speeches in the past. However, I have benefited from comments from some leading lawyers who work in family law—my daughter is a senior lawyer in the City and I was able to glean some advice from her. So if I speak as a fool, as St Paul once put it, I at least try to be an educated fool in what I am about to say.
For my part, I think that prenuptial agreements, if entered into freely and after legal advice, should be recognised as legal agreements, and that has been the direction of travel, as we have noted, although I wonder whether they might be subject to an overall test of reasonableness in the Bill. The noble Baroness, Lady Shackleton, said “fairness”, and I wonder whether some overall test of reasonableness or fairness is required.
There is a sense of course in which prenuptial agreements are in tension with the traditional commitments entered at marriage—for better, for worse and so forth. I certainly do not want to encourage moving to an unduly contractual view of marriage. All is fair in love and war, it is said, and war is not governed by a contract with break clauses. Imagine Britain in 1939 sending a message to Berlin: “We are declaring war, but we would like to see how it is going at Christmas”. There is a certain dynamic in some human activities where you just have to go for it without, as it were, trying to predict everything in advance. Yet the reality is that people today often marry later or with children from previous marriages, and I can see a place for prenuptial agreements in providing a better basis for a new marriage. I would regret if they became too much the norm for all marriages—though I fear that may well be the direction of travel—because there needs to be a certain sense and element of open-ended commitment and, yes, a leap of faith, in our understanding of marriage.
I also accept the general wisdom of seeking to help the people concerned in a divorce to make as clean a break as possible. The Church has moved in this direction in the—fortunately comparatively rare—circumstances of priests divorcing. When this happened in the past, it generally used to be the case that the priest was male and the spouse a female, who had often devoted herself to supporting her husband’s vocation and their family. Divorce in these circumstances was very difficult indeed. Typically, there were few assets to distribute and a diocese would house what one often called “the deserted wife” for life and would provide some maintenance. Nowadays, we seek to facilitate a clean break and provide funds for retraining, if needed, and time-limited help with mortgage payments, where necessary.
I have some hesitations over the details in Clause 5. Why is the age of a dependent child limited to 16? Children these days are often dependent on their parents for much longer than that—I speak from my own experience. Again, five years seems a tight time limit for many folk who need significantly longer to retrain and get established in a career. I would prefer seven or perhaps even 10 years, notwithstanding the possibility of a court granting periodical support for a period of longer than five years.
However, my greatest concerns are about Clause 4. The potential danger with ring-fencing premarital property is with a marriage where most of the assets were generated pre-marriage, and the marriage was perhaps a comparatively long one, perhaps with one party, usually the wife, looking after children and not developing a career. Perhaps the husband had been very busy, which was in practice what needed to happen. Perhaps the income during the marriage had been fully spent on the children’s education. There could be very little matrimonial property to divide in those circumstances, yet one party has substantial premarital ring-fenced assets and the other has given half a lifetime to the marriage but does not have any entitlement to those assets.
The Bill as drafted does not seem to have an adequate safety net—the flexibility to which the noble Baroness, Lady Falkner, referred in her remarks—either for the other spouse or for children. Again, it is limited here to children aged 21. Children in education often go on well beyond 21, so it seems too low an age limit.
These are merely the thoughts of a jobbing Bishop who has been happily married for 40 years—and who, by pure coincidence, will return to Scotland in a year or two.
My Lords, it is a pleasure to follow the right reverend Prelate. On this subject and so many others, we so value the Lords spiritual, who help us to set the tone. This is not only about the law but is much more profoundly about the sort of society in which we want to live.
Many have commented on the extraordinary changing demographics, attitudes and expectations of marriage, which makes this piece of legislation all the more complex and timely. I warmly welcome the comments made by the noble Baroness, Lady Deech, a long-standing friend of mine. Indeed, for exactly the qualities we have heard from her today, I invited her 20 years ago to become chairman of the Human Fertilisation and Embryology Authority, a role where attention to the law as well as to the ethics involved was critical. In many ways, that is what unites us today.
There is a wealth of wisdom and experience in this House, and of course I defer to the greater knowledge, wisdom and experience of the noble and learned Lords who spoke earlier. Indeed, I had to go and put on a little more lipstick before coming back in to speak, following the noble and learned Lord’s comments a few moments ago.
I was also particularly pleased to hear from my noble friend Lady Shackleton. Her wisdom and experience are all the more important, and her clarity about why the degree of discretion has become completely unjustifiable will have registered with us all. As a great fan as a child of Hughie Green’s “Double Your Money”, the words “Open the box or take the money” will stay with me for a long time. However, for many years I have been concerned with family law. In my early 30s, I was chairman of the Inner London Juvenile Court. When I first came to this House I was responsible for the implementation of the Children Act 1989, working closely with the former Lord Chancellor, my noble and learned friend Lord Mackay, and with a long-standing friend and associate now, the President of the Supreme Court, the noble and learned Baroness, Lady Hale, an early and very enlightened thinker on these subjects.
On one occasion I was about to have an Adjournment debate, after my ministerial life was happily over, which again was on a matter of family law and divorce, and I met my noble friend Lady Shackleton and started to cross-question her about divorce, what needed to be reformed and what should change. She entirely misunderstood my intentions and thought I was trying to winkle out some ideas about all her celebrity clients, about whom I knew very little at the time. However, I was preparing for an Adjournment debate, which, in the way of life in another place, started at half-past midnight, and I spoke about these matters. Yes, there has been progress but insufficiently so. The fact that we are debating these matters now in relation to a piece of 1973 legislation suggests a critical mass of weight behind the idea that there needs to be progress.
Having been married for 50 years—I agree with the saying “Murder often, divorce never”—as yet I have no personal experience of divorce, but, like others, I have been closely affected by the experiences of family, friends and far too many constituents. As an MP, I found that often the hardest, most painful and most distressing cases were those involving divorce. I echo time and again that the process often exacerbates the problem. How many people think, “Our marriage has come to an end. It’s not right for anybody that we carry on living together, but we want an agreeable and conciliatory divorce”? However, by the end of the process, if they had not deeply disliked each other at the beginning, all trust and optimism is lost.
It has been argued that since it has become relatively easy to divorce on a no-fault basis, the splitting of a very deep relationship will always involve acrimony and the intensity of feeling gets displaced on to the property or the children. I am not sure about that. Mediation, not having to go to court and proper information being available must all be better for those concerned. Reasonable expectations over fair-settlement outcomes can do much to ease the pain, and that is my understanding of a key purpose of the Bill.
Since the 1973 Act, judges have been presiding over divorce cases at a time of profound societal changes in practice and attitudes towards marriage. However, the argument is that these changes have not yet been addressed by appropriate legislative review and reform, and that has been repeated time and again today. The matrimonial landscape of the UK today looks very different from that of 1973. We have a seen a decline in overall marriage rates, a decline in the proportion of religious ceremonies, an increase in first marriages relative to remarriages, the introduction of marriage equality, and a dramatic increase in the age at which people marry. The average age in 1973 was 26 for women and 28 for men; by 2015 it was 35 for women and 37 for men, but those figures relate only to heterosexual marriages.
Reports on these trends from the Office for National Statistics are fascinating and particularly informative. However, as I said, despite the changes, judges have been left with essentially the same legislation as was put in place in 1973. The result is the institutionalisation of a system which too often creates confusion, unpredictability and cost, placing excessive interpretive responsibility on judges. The extent of judicial discretion is such that lawyers and, of greater concern, the high number of self-representing litigants find it increasingly difficult to form reasonable expectations about what a fair outcome might look like.
Of course, divorce affects people across the full socioeconomic spectrum. We have talked about high net-worth individuals—some of the celebrated cases. However, the lack of legal aid provision often leaves the less fortunate in an acutely difficult place, where any money spent will come from the long-term benefits they have accrued. It was recently reported by Citizens Advice that 90% of self-representing litigants say how negatively this impacts on aspects of their lives, such as their mental health, their working lives, their finances and their personal relationships.
In a previous debate on this subject and again today, the noble Baroness, Lady Deech, correctly identified that such uncertainty threatens our commitment to the rule of law—a vital pillar of our democracy. The law must be accessible, clear and predictable. To borrow words from the late Lord Bingham of Cornhill, former Master of the Rolls, Lord Chief Justice and senior Law Lord:
“The rule of law does not require that official or judicial decision-makers should be deprived of all discretion, but it does require that no discretion should be unconstrained so as to be potentially arbitrary. No discretion may be legally unfettered”.
It is now evident that change is called for. With judges playing a central part in applying family law, we need to listen carefully to more views from the judiciary on the nature and effectiveness of such reforms. I am not able to say whether the means are the precise way of addressing the ends. I think all of us in the House support the ends and I hope that, in Committee, we can look more carefully at the precise means by which to get there.
Divorce proceedings inevitably occur at an exceptionally stressful and emotional time for those involved and can bring exceptionally difficult consequences for the children. Parental divorce can be particularly traumatic for any child, representing a profoundly distressing and disruptive event in their young lives. However, the extent of this disruption can be dampened or exacerbated by the nature of the divorce, particularly by factors such as witnessing vitriolic settlement proceedings or uprooting them from the family home. On the whole, children can cope with single parents but struggle to deal with enduring acrimony. This is repeated time and again by a wealth of academic literature. Family conflict is a greater cause of depression, anxiety and low self-esteem than divorce. The consequences of parental divorce on children worsen depending on the degree of parental conflict. Marital conflict that is hostile, aggressive, poorly resolved or concerns the child is particularly destructive and upsetting for children. So apart from the individuals concerned, it is in the interests of children that we examine how the Bill will impact them. I should be grateful for further clarity on the extent to which binding prenuptial and post-nuptial agreements might infringe on judges’ flexibility to prioritise children’s needs.
Improving predictability on the settlement process is a valuable outcome. But what about the distribution of effects that the Bill is likely to have for those in marriages where there is economic inequality between spouses, as in probably the majority of cases? All will have read the comments of Dr Sharon Thompson, of Cardiff University, who said that removing judicial discretion may prove disadvantageous for the economically less-advantaged spouse by diminishing the judicial flexibility to meet their needs through the division of non-matrimonial property.
We must also be wary of inequalities at the point when a prenuptial or post-nuptial agreement is created. As I understand it, these agreements are likely to safeguard the income of the wealthier spouse without compensating their partner for potential career sacrifices which may, in practice, facilitate their partner’s higher earnings. The concern is exacerbated by the reality that the wealthier spouse is likelier to have superior leverage at the time of negotiating these agreements. I hope we can look at this and other matters. Will the Bill diminish the ability of judges to correct for these disparities, except in the prevention of “serious financial hardship”?
I admire and applaud the noble Baroness and all those who have rightly spoken about the purpose and principles of the Bill. The job of the House now, I believe, is to give it careful scrutiny to ensure that there are no unforeseen circumstances, complications or adverse effects, and that we genuinely move to a more civilised and enlightened divorce process, where dividing the spoils does not create greater acrimony than the divorce itself.
My Lords, I join others in thanking my noble friend Lady Deech for her tenacity in reintroducing this much-needed Bill replacing Section 25(2) of the Matrimonial Causes Act 1973. It is well accepted that reforms of our divorce laws are long overdue, supported not just by the Law Commission proposals but by Resolution and the Centre for Social Justice.
Coming at the end of the batting order, I fear that almost every point I will make is a repetition of what other noble Lords have said so cogently.
I come to this debate with the experience of having been a divorce lawyer in South Africa—divorce attorney, it was, in those days—where I practised under Roman law, the corpus juris civilis, which is similar to the law in Scotland, respecting that antenuptial agreements are binding, and where many of the provisions of this Bill are incorporated in the divorce law. I also come, sadly, from the experience of having gone through a long, protracted, painful and expensive divorce. I congratulate the noble Baroness, Lady Bottomley, on having been married happily for 50 years.
Legal certainty is of paramount importance. It is absurd that the development of our divorce law has been evolved through judge-made law which bears little resemblance to the original statute. I find it hard to accept that one of the reasons for the Government’s reluctance to take the initiative for a root-and-branch reform of the law is the need to, in their words, maintain flexibility. It is tempting to bear reference to the Brexit divorce, where the uncertainty has been devastating to both businesses and individuals alike.
Let me touch briefly on the issue of costs, which is a major consideration. Many would argue that the only winners in many divorces are lawyers. The removal of legal aid has resulted in many parties being unrepresented and, without clearer guidelines and legal certainty, has added to the trauma of divorce. Making prenuptial agreements binding, as long as both parties have received independent advice, would certainly remove a great deal of the uncertainty as well as reduce legal costs. I agree with my noble friend Lady Deech that there is no evidence that marriage breakdown is encouraged by prenuptial or postnuptial agreements.
I agree also with the noble Baroness, Lady Bottomley, that often insufficient consideration is given to the harmful impact of protracted and acrimonious divorces on the children of divorcees. All too often attempts at mediation fail because of the current legal uncertainty on the division of post-marital assets. The Bill would provide much-needed scope for successful mediation, reducing the need to go to court, and a far fairer outcome. Clearly there is a strong case for divorce reform which makes the law more predictable and paves the way for swifter, clean-break financial settlements. A medium can be achieved for the provision of more certainty and an element of flexibility. It is shameful that London has the reputation as the divorce capital of the world.
I give this Bill, so ably introduced by my noble friend Lady Deech, my wholehearted support. I hope that the Government can, on this occasion, give more backing to these much-needed reforms.
My Lords, I add my welcome to the Bill of the noble Baroness, Lady Deech, which the Opposition are happy to support.
As the noble and learned Lord, Lord Brown of Eaton-under-Heywood, observed, in many areas of legislation there can exist a tension between statutory predictability and judicial discretion—a contest between predictability and flexibility. As the noble Baroness, Lady Deech, observed, for Scotland, Parliament decided in 1985 in favour of prescriptive predictability regarding the division of assets on divorce. This of course did not drive out all judicial discretion in deciding how the split of finances will fall.
In so far as the Bill has drawn inspiration from Scottish experience, I propose identifying a few caveats that Caledonian experience may suggest; I note my thanks to Ruth Innes Advocate, a family law specialist in the Scots Bar. First, however, I commend the Bill, which now includes the five-year period for periodical payments. The Scottish experience suggests that the three-year period is often too short. Furthermore, it is seen to impose a real obstacle to extending the period, even where overall fairness might so dictate. The Bill’s proposal of a five-year period is seen as an improvement on the Scottish experience. The noble and learned Lord, Lord Hope of Craighead, identified this as an area of reform in the Supreme Court cases already referred to—Miller and McFarlane—way back in 2006. Unfortunately, the Scottish Parliament has not yet seen fit to reform the three-year period.
For all the advantages of the predictability in Scots law regarding financial provision, I, with Miss Innes’s assistance, have identified three particular caveats. Where there is a potential competition of jurisdictions for divorce—as between England and Wales, and Scotland—I understand that the economically stronger party is generally advised to raise proceedings in Scotland but the economically weaker party is advised to do so in England and Wales. Thus Scotland is seen to favour the economically stronger party, by way of the 1985 Act. This is partly a result of the three-year period for periodical payments, as well as the practical exclusion of pre-marriage assets from the assets for division.
The second caveat is that the 1985 Act inevitably required a setting-down process, as with all legislation. That produced the other cases that identified and clarified the law, which identified some areas of concern where the law has become somewhat frozen, by reference to these earlier cases shortly after the 1985 Act. These early test cases have tended to discourage later appeals for the usual reasons of cost and risk. The concern is that the freezing of the position may be at the wrong points established by these earlier judicial decisions. To be clear, the concern is for the interests of the economically weaker party.
The third caveat relates to the somewhat rigid definition of “matrimonial property” that has, from time to time, produced outcomes regarded by practitioners in Scotland as unfortunate. For example, in cases of a high-income lifestyle but a low accumulation of assets, the economically weaker party can suffer a dramatic downturn in living standards while the high-earning party can maintain their standard of living. This is seen as an undesirable outcome in situation—a point partly referred to earlier by the right reverend Prelate.
However, none of these caveats should detract from the support given by these Benches to the Bill. My observations point us to where problems may arise and, perhaps more helpfully, where problems may be avoided. The Bill’s principles of equality, clarity and fairness plainly deserve support, which these Benches are happy to provide.
My Lords, I congratulate the noble Baroness, Lady Deech, on securing the Second Reading of her Bill. Indeed, I thank her for all the work she has done, and no doubt will continue to do, in this vital area. Although currently much maligned, it is a strength of your Lordships’ House that noble Lords such as the noble Baroness, Lady Deech, with a passion for and deep understanding of an issue, can work tirelessly with Governments of all persuasions to encourage reform. It has been my pleasure to listen to your Lordships today. I thank all noble Lords for the insight they have brought to the debate. I will encourage my colleagues in the MoJ to study them carefully.
The resolution of financial matters is one of the many challenges of divorce or civil partnership dissolution. Although there are differences of opinion within your Lordships’ House and beyond, it seems that there is an agreed and twofold objective: that the process should be as supportive and clear as possible, and that the outcome for both parties and any children involved should be fair.
From the debate it is very clear that there is consensus among your Lordships that reform of the law governing divorce finances is overdue, but it is also the case that consensus on the type of reform is not universal. The President of the Family Division, Sir James Munby, who, as the noble Baroness, Lady Deech, noted, favours reform, also recently observed that,
“views on what form such reform should take are sharply divided”.
It seems that this divide comes from the differences of opinion about how we should balance the law. We can all agree that the current legal framework gives the court wide-ranging flexibility in making financial orders and that judges skilfully exercise that flexibility and discretion every day. For those who see the virtue of the existing law, that flexibility allows for fairness. For those who see a problem with the law as it is, that same flexibility makes for uncertainty. For example, the noble and learned Baroness, Lady Hale, the President of the Supreme Court, has suggested that, sometimes, open-ended periodic payments are the only way to,
“give each party an equal start on the road to independent living”.
It is clear to me that the breadth of views, including from those at the very top of the legal profession, warrants careful consideration by the Government.
Rebalancing a law such as this—if we are satisfied that it needs rebalancing—cannot be an easy undertaking. The law—one law—must allow the court to deal equitably with the widest range of cases, from shorter marriages of young people, both with successful careers and great prospects, to longer marriages of older people where it was jointly decided that one of them should give up a career to build a home and raise children. Here I must note that, although there might be a perception that the law is out of step with how men and women live their lives today, the law is gender-neutral. Equality of spouses is in statute, so how does it get put into practice? One might conclude—indeed, some have alluded to this—that it is not the law that needs to change but the attitudes of some of those who apply it.
It is clear that the law must retain a measure of flexibility. The question before your Lordships’ House is how much flexibility is needed to allow the court to make orders that are fair to both parties in a very wide range of cases and circumstances. This must be balanced with the need to provide greater certainty about financial outcomes to inform and manage the expectations of the separating couple. The Government want to encourage couples to agree financial arrangements themselves where it is appropriate and safe for them to do so.
In 2014, the Law Commission noted criticism that the law on financial needs was not always consistently applied, but it concluded that the law on this did not need statutory reform. Instead, it recommended that the Family Justice Council prepare guidance on the meaning of “financial means”. The Government listened and took action. With government funding, the Family Justice Council produced detailed guidance for the judiciary and legal practitioners. The noble Baroness, Lady Deech, commented on the guidance’s complexity, but it is for those with the skills and experience to deal with complexity, not for the divorcing couple. It was only relatively recently that this work was completed—indeed, within the last few years. It is only right that we give it time to bed in. If, in due course, it is decided that it is not fulfilling its purpose, perhaps it will need to be reviewed.
There is good guidance for the divorcing couple—a topic mentioned by the noble Baroness, Lady Falkner. The Government produced an excellent guide for divorcing couples to help them agree their finances. The guide, Sorting Out Your Finances When You Get Divorced, is accessibly written, is just 50-odd pages long, is well presented and has been available since September 2015. It explains the options available and how the court makes decisions, so that divorcing couples can have a realistic perspective on their separate financial futures.
I need to repeat the difficulties presented by that document when the judges applying it do not agree. When you are advising somebody and want somebody to mediate an agreement, or when you are faced with a client who comes into your office and says, “What should I settle at?”—it does not matter if you are dealing with a pro bono person or somebody who can afford many times most people’s annual income—if the adviser cannot predict the outcome because judges apply the same rules differently, we are in big trouble and a settlement cannot be agreed. Therefore, there is a delay; therefore, there is uncertainty; therefore, people get upset and, therefore, children become involved or get disaffected. Most people can deal with things when they know what it is; they cannot deal with uncertainty and delay. The cost of finding out the solution from the document that has been produced is not working.
I thank the noble Baroness for her insights on that. To a certain extent, the Government agree. It is why we have been working with the Family Justice Council and are continuing to look at this area. We want to make sure that everything is in alignment. Everything has eventually to be in alignment, whether that be the decisions of the judges or the expectations of those going in front of them and seeking a fair divorce.
Returning to the guide, I wish I had seen it when I went through my—thankfully—only moderately costly divorce. Reaching a financial agreement is very stressful, as I think all divorcing couples can attest. The further away from judges that agreements between the individuals can be reached, the better it is.
I return to flexibility and certainty, as mentioned by the noble and learned Lord, Lord Brown, my noble friend Lady Bottomley and the noble Lord, Lord St John of Bletso. In any reform of the law to balance flexibility and certainty, the Government need to be sure that a proposal would achieve what it sets out to do and would not cause unintended difficulties. Given the complexity involved in disentangling the finances of a shared life and the impact of any changes at a personal level, the Government are keen to see a solid evidence base for reform. We are very open to reviewing any and all evidence from the noble Baroness, Lady Deech, or any noble Lords. Put simply, we all want to get this right.
I acknowledge that noble Lords have pointed to the model of Scots law. I am grateful to the noble and learned Lord, Lord Davidson of Glen Clova, for his comments on its operation and some of its consequences. The noble Baroness, Lady Deech, has drawn attention to research by Professor Jane Mair and others on how the Family Law (Scotland) Act 1985 has worked in practice. A proposal to amend English law in line with Scots law may well appear attractive. I am conscious, however, that there are dissenting voices among the judiciary, family law practitioners and beyond—and, perhaps as significantly, in another place. If the Government conclude that the law in England and Wales needs reform, whether of the duration of periodical payments or of the matters that a court must consider, we must take account of the provisions as a whole and the effects of any changes.
The so-called “big money” divorces mentioned by many noble Lords make for eye-catching tabloid headlines, and I appreciate that several of your Lordships think that awards have been overgenerous. One might also conclude that because such cases come to our country and to the English courts demonstrates perhaps our laws in this jurisdiction are fair, and that the impartiality of our judiciary is highly regarded. But such cases are small in number and a world away from the circumstances faced by the vast majority of divorcing couples.
The question for government is where any reforms would leave more typical cases, perhaps those involving people of an age at which it would be difficult to return to their former career, be that a man or a woman. Couples who have no intention of divorcing make decisions in the expectation of a long-term partnership. These decisions then have serious repercussions on one or more of the parties when, against their initial expectations, their marriage breaks down. With all this in mind, I now turn briefly to the detail of the Bill.
Clause 2 defines matrimonial property—in broad terms, this is property acquired during the marriage but not, for example, from an inheritance—and seeks to exclude property acquired before the marriage from consideration as an asset when financial orders are made. The Government’s concern remains that this could cause hardship if someone’s financial needs could be met only if assets that the other spouse had acquired before the marriage were included.
Clause 3 seeks to make nuptial agreements enforceable on condition of certain safeguards. The Government are considering a similar recommendation, made by the Law Commission, which has additional safeguards. I note the comments of the right reverend Prelate the Bishop of Chester, suggesting a test of reasonableness or fairness when making an agreement, and the need for independent advice, noted by the noble Lord, Lord St John of Bletso. We are considering introducing nuptial agreements and we will make our position known on this recommendation in due course. If the Government decide to go ahead, we will of course give consideration to the guidance needed for couples, as mentioned by the noble Baroness, Lady Falkner.
Clause 4 sets out a presumptive 50:50 split of property. People do not, of course, always leave a marriage equally. One partner often has better employment prospects. One partner is often expected to shoulder most of the caring responsibilities. The existing law allows for redistribution of assets to make up for this. The Government remain concerned that changing the law in the way proposed could have an adverse effect on the financially weaker party and their transition to full financial independence.
Clause 5 seeks, in part, to limit the duration of periodical payments to five years,
“unless the court is satisfied that there is no other means of making provision for a party to the marriage and that that party would otherwise be likely to suffer serious financial hardship as a result”.
I appreciate that periodical payments often draw headlines, being called “a meal-ticket for life” in divorce cases that involve the more affluent. However, it is worth noting that most people do not, in fact, apply for periodical payments when they divorce. It is important that one type of divorce should not cloud the debate around what happens to those of more limited financial means. We have, it is important to say, common ground in wanting to support people to move to financial independence. The Government are not persuaded, for the time being, that the existing law does not support this objective. However, as I said previously, we are happy to review any evidence that comes to light.
On Clause 6, the Government continue to believe that the existing provision on taking a party’s conduct into account remains adequate.
I have outlined the Government’s reservations about the Bill, but I want to focus on where we agree. While the Government’s position on the accessibility of the law and the clarity that it offers divorcing couples may differ from the position of the noble Baroness, Lady Deech, we all want the law to support couples and encourage a fair outcome. I am conscious, too, that other individuals and groups have also shown an interest in divorce finances, and the Government will wish to take a range of views, and solid evidence, into consideration if we conclude that reform is necessary. My honourable friend Dr Phillip Lee recently said in another place that he is hopeful that the Government can work across the House and beyond as we continue efforts to improve the family justice system. This remains true. It would not be helpful to approach consideration of reform in any partisan way.
I am aware that I have spoken at length and may not have covered as many points as I would have liked, but I really wanted to set out the Government’s position. If I am able to add more colour, I will write to all noble Lords who have spoken today. I acknowledge the mood on all sides of this House and the strength of support for the Bill. I assure your Lordships that the Government will reflect on all that has been said today.
My Lords, as you would expect from this House, a wealth of wisdom and experience has been shown. Some of the prime movers in some of the most important cases of recent years are right here and have spoken in support of the Bill. There has been support from right around the House, including from the Bishops’ Bench—what more does one need?
Before I address the government response, the main worries expressed by those who have spoken were about prenups. The Law Commission looked into this very thoroughly. There is actually a draft Bill appended to the most recent Law Commission report on this. If one is looking for consensus, one could pick up that Bill, already drafted, and run with it. I think it has a little too much uncertainty in it but there is no lack of consensus on the need to have prenups and the fact that they will not do any harm.
The other note of contention—not so much about discretion and statute, because we have that in every area of the law—was about the weaker partner. This brings me to something that I can only touch on lightly, which is how we see women today. In most other countries where they have a system like the one I have put forward, women actually feel less discrimination and have better childcare and more equal pay. There is a close relationship with the insistent message from some lawyers and judges—and, regrettably, some younger academics who are reinventing the wheel—that women are victims and women are suffering.
We changed the divorce law to “irretrievable breakdown” in 1969 and the message should have gone out to women then that, “You cannot expect to stay married because if your partner wants out he will go and there is nothing to stop him”. It is a bit late now to say, “If you are a housewife and you have given up your career to look after your children, a man will have to keep you”. He may not have any money. He may remarry to someone who is equally deserving. In our society now the Government say that women should take half of all positions on boards, should form half of the judiciary and should be in the Supreme Court—women should be running the world. I agree with that but you cannot at the same time say, “It’s all right. You will be kept. You don’t have to pursue a career. You are a victim”. We have to get away from this victim mentality and see women as equals.
To the Government I say: lack of consensus has never stopped the Government pursuing a reform if that is what they want to do. We can all cite many examples of that. I put forward a suggestion this year that we should have a Select Committee on family law, which would have brought the attention of the House to bear on these matters and maybe produced a consensus, but I am sorry to say that that notion was turned down in favour of what I have previously described as some motherhood and apple pie Select Committees in this Session.
The guidance that the Minister referred to has never been cited in a case—it has not achieved any sort of consensus, as the noble Baroness, Lady Shackleton, pointed out—nor has the guidance which is put forward for litigants, or they would not be weeping in court, as I have seen them do, and spending so much money. It has not worked. The Government are missing the point if they think that that guidance is going to help. Anyway, what sort of condition is the law in when you have to set it to one side and turn instead to guidance put together by the Family Justice Council? It is not binding and it has not helped.
The Minister said we need evidence. We have a wealth of evidence from the whole of the western world: Europe, America, Canada and, most notably, Scotland. It has worked there since 1985. The evidence in the report Built to Last shows that no more women are going on social security than before. The evidence is there. England is an outlier. This is not a situation to be proud of. Why not get on with it? The more years that go by, the worse it will be. The money that is wasted on legal costs would rescue many middle and lower-income couples from the penury that they might otherwise face on divorce. So I am not satisfied with the government response. I think they will find that the public are not satisfied with their response. When this is covered in the media, they will find that the weight of opinion is against the “make do and mend” attitude that we have just heard.
On that note of severe dissatisfaction, I ask the House to give the Bill a Second Reading.
Bill read a second time and committed to a Committee of the Whole House.
House adjourned at 2.20 pm.