As the Government consultation on cohabitation reform closes, now is the time to deliver meaningful reform
Today (Friday 14 August) marks the close of the Government’s consultation, A Fairer End to Relationships, a potentially transformative moment for family law in England and Wales. For the first time in decades, there is an opportunity to modernise the legal framework governing relationship breakdown so that the law better reflects the way millions of people live their lives today.
The proposed reforms focus on simplifying the law about how assets are divided on divorce; and introduce for the first time a framework of rights and responsibilities for unmarried couples in certain circumstances, both on separation and when one partner dies without leaving a Will.
Forsters’ Family team supports reform that addresses the significant gaps in protection currently faced by cohabiting couples, whilst preserving individual autonomy by allowing couples to opt out of any new framework if they choose to do so. Unmarried couples who separate presently have no automatic rights to lay claim to assets or income based on fairness or need, regardless of the length of their relationship, whether they have children together, or the extent to which their finances and lives have become intertwined. This can lead to difficult outcomes where, for example, one partner has lived for many years in a home owned solely by the other partner and has contributed to the relationship in non-financial ways – perhaps caring for children, giving up work and supporting the other partner’s career, by joint agreement. Current legal remedies for unmarried cohabiting partners are based largely on direct financial contributions or claims to house/support children during their education (but not beyond). Though we help many couples to navigate the existing law – whether in making or responding to claims – we think that the law should do more for unmarried couples, as it does in other countries. Many people don’t marry for lots of different reasons – sometimes conscious/mutual, sometimes not.
The Government’s proposals seek to address these issues through a new framework for qualifying cohabitants. While the detail remains to be worked through, the proposed model would apply to adult couples in “an enduring family relationship” who meet specified eligibility criteria, including a minimum period of cohabitation (3 years is suggested) or having a child together.
The proposals don’t give unmarried couples the same rights as married couples. A more limited framework of claims is suggested, with a partner able to seek to have their needs met on separation, but not to share in the fruits of what was built up during the relationship. Under the proposals, the starting point would be that each party generally retains what they legally own, but courts would be able to step in to make financial orders focused on meeting housing and income needs, particularly where children are involved. The emphasis would be on meeting financial needs through one-off capital provision wherever possible, to achieve financial independence and minimise ongoing financial ties. ‘Spousal’ maintenance would only be available in exceptional circumstances such as serious illness or disability.
Couples would be able to enter into opt-out agreements if they wish to make alternative bespoke arrangements, which is likely to be the case for many HNW individuals who currently use cohabitation agreements to set out their intentions around property ownership, financial contributions and what should happen if they separate. To be effective, an opt-out agreement would require certain safeguards, such as financial disclosure and independent legal advice. It would be up to the individual couple whether they wish to opt out of the legal framework completely – which may be the case e.g. if they were each of independent means and confident they could be financially independent on separation, or if a couple start cohabiting later in life (perhaps after earlier marriages) and want to protect wealth against claims on separation so that it is preserved for any children of an earlier marriage. Other couples may be content to opt out of the legal framework but to do so only partially, by having a tailored cohabitation agreement setting out other financial arrangements in the event of separation. Forsters’ Family team can advise on those agreements as well as working alongside colleagues in our Private Client and Residential Property teams who can advise on Wills and declarations of trust setting out ownership shares in any co-owned property. We provide a holistic, joined up service.
Reform is also important for survivors of domestic abuse. We know that financial vulnerability can be a significant barrier to leaving an abusive relationship. A clearer and more accessible legal framework has the potential to provide greater certainty, fairness and protection to those who may currently feel trapped.
Head of Family, Jo Edwards, says: “The case for cohabitation reform is compelling. Cohabiting couples are the fastest-growing family type in the UK, yet many continue to assume that living together creates legal rights and responsibilities comparable to marriage. Despite decades of public education efforts, belief in the myth of ‘common law marriage’ remains widespread, leaving many people vulnerable to unexpected financial hardship when relationships end or a partner dies. The reality is that millions of people expect protections which the current law does not provide.
Many unmarried couples share homes, raise children, blend their finances and make significant sacrifices for their family. Some choose not to marry for cultural, personal or financial reasons; others remain unmarried because one partner does not wish to, or because the other partner doesn’t realise they have to, to have better financial security. Whatever the reason, the financially weaker partner and any children of the relationship should not be left exposed to hardship because the law has failed to keep pace with modern family life.
By the same token, we realise that many people will not want to be subject to any new framework for unmarried couples and it is important that their views be respected, provided that doesn’t risk causing financial hardship and unfairness to their partner and/or their children”.
Experience from countries including Australia and New Zealand demonstrates that carefully designed protections for cohabiting couples can operate successfully without undermining marriage or producing the consequences sometimes predicted by some. Reform provides an opportunity to learn from countries that have successfully navigated the balance between autonomy and protection.
Joanne and Elizabeth’s comments on the need for cohabitation reform were also featured in FT Adviser. Click here to read.
Nuptial agreements
The consultation signals a decisive move towards the introduction of legally binding nuptial agreements. “Qualifying Nuptial Agreements” (QNAs) would be enforceable, subject to key safeguards being satisfied, including independent legal advice, material financial disclosure and (for pre-nuptial agreements) execution at least 28 days before the wedding.
While nuptial agreements have carried weight for many years, their legal status has remained uncertain, subject to the fact-sensitive fairness test set out by the Supreme Court in the 2010 case of Radmacher v Granatino. The proposed reforms nod to greater autonomy and certainty for divorcing couples, albeit with an important safety net: where needs are not met by the QNA, the court may still intervene – but on a narrower basis than at present.
Forsters’ Family team regularly advises HNW individuals on complex pre- and post-nuptial agreements involving family wealth, businesses, inherited assets and cross-border considerations, and welcomes greater clarity and certainty in this important area of law.
As the consultation closes, we await the Government engaging with responses and setting out next steps. This is a defining moment for family law – a rare opportunity to create a clearer and more coherent framework of rights and responsibilities that protects children, supports vulnerable individuals, respects personal autonomy and reflects the reality of contemporary relationships.
