Cohabitation again
Jul. 31st, 2007 12:31 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
ewxCohabitation: The Financial Consequences Of Relationship Breakdown. This is the law commission report referred to in today's news about cohabitation law changes (not the research report I linked to a few days ago). Bluffers may wish to skip straight to the summary list of recommendations in part 8.
Initial remarks:
We recommend that cohabitants should not be disqualified from claiming financial relief on separation on the grounds that one or both of them are or were at any relevant time married to, or civil partners of, or cohabiting with, another party.
...implying that polyamory wouldn't in itself get you out of the new responsibilities.
We recommend that:
(1) the scheme
(b) should be capable of applying to any relationship which exists at that date; and
i.e. existing relationships would be grandfathered in.
Unlike on divorce, periodical payments should not generally be available.
...so you'd pretty much sort things out once and then have a clean sheet.
We recommend that goods given to one party by the other should not comprise a retained benefit, nor should it be possible to mount a claim for economic disadvantage on the basis of making such gifts, unless it can be proved by the donor that the gift was conditional upon the cohabiting relationship continuing.
Nobody's going to be forced to give presents back.
The text of part 8:
PART 2 SHOULD THERE BE REFORM?
We recommend that legislation should create a scheme of general application, whereby cohabiting couples would be entitled to apply for financial relief on separation:
(1) provided they satisfy statutory eligibility criteria;
(2) but not where they had reached an agreement disapplying the statutory scheme ("an opt-out agreement"), in which case the parties' own financial arrangements (if any) would apply.
PART 3 ELIGIBILITY FOR REMEDIES ON SEPARATION
We recommend that persons should be cohabitants for the purposes of being eligible to apply for financial relief on separation where:
(1) they are living as a couple in a joint household; and
(2) they are neither married to each other nor civil partners.
For these purposes, references to marriage and civil partnership should be taken to denote relationships recognised as such for the purposes of the law of England and Wales.
We recommend that cohabitants who are by law the parents of a child born before, during or following their cohabitation ("cohabitants who have a child together") ought to be eligible to apply for financial relief on separation.
We recommend that:
(1) save where cohabitants have a child together, they should not be eligible to apply for financial relief on separation unless they have lived as a couple in a joint household for a duration specified by statute (the "minimum duration requirement");
(2) any such minimum duration requirement should be set by statute within a range of two to five years;
(3) if the minimum duration requirement is set at two years, then the court should have no discretion to dispense with the requirement; but
(4) if the requirement is set at a period longer than two years, then consideration should be given to allowing the court to dispense with the requirement, including in particular cases where, although cohabitants do not have a child together, they treated a child who was living with them in their joint household as a child of their family; and
(5) any minimum duration requirement should be satisfied only by a continuous period of cohabitation.
We recommend that persons should not be eligible as "cohabitants" where sexual activity between them would constitute a criminal offence owing to the age of either party or to the fact that the parties are relatives.
We recommend that cohabitants should not be disqualified from claiming financial relief on separation on the grounds that one or both of them are or were at any relevant time married to, or civil partners of, or cohabiting with, another party.
We recommend that:
(1) the scheme
(a) should not apply to any relationship which ended prior to implementing legislation coming into force; but
(b) should be capable of applying to any relationship which exists at that date; and
(2) in seeking to establish that they satisfy the eligibility criteria, parties to such relationships should be able to rely on periods of cohabitation and the birth of children prior to implementation.
PART 4 FINANCIAL RELIEF ON SEPARATION
We recommend that the courts should be given a discretion structured by principles which determine the basis on which any financial relief is to be granted on separation.
We recommend that financial relief on separation should be granted in accordance with a statutory scheme based upon the economic impact of cohabitation, to the following effect.
An eligible cohabitant applying for relief following separation ("the applicant") must prove that:
(1) the respondent has a retained benefit; or
(2) the applicant has an economic disadvantage.
as a result of qualifying contributions the applicant has made
A qualifying contribution is any contribution arising from the cohabiting relationship which is made to the parties' shared lives or to the welfare of members of their families. Contributions are not limited to financial contributions, and include future contributions, in particular to the care of the parties' children following separation.
A retained benefit may take the form of capital, income or earning capacity that has been acquired, retained or enhanced.
An economic disadvantage is a present or future loss. It may include a diminution in current savings as a result of expenditure or of earnings lost during the relationship, lost future earnings, or the future cost of paid child-care.
The court may make an order to adjust the retained benefit, if any, by reversing it in so far as that is reasonable and practicable having regard to the discretionary factors listed below. If, after the reversal of any retained benefit, the applicant would still bear an economic disadvantage, the court may make an order sharing that loss equally between the parties, in so far as it is reasonable and practicable to do so, having regard to the discretionary factors.
The discretionary factors are:
(1) the welfare while a minor of any child of both parties who has not attained the age of eighteen;
(2) the financial needs and obligations of both parties;
(3) the extent and nature of the financial resources which each party has or is likely to have in the foreseeable future;
(4) the welfare of any children who live with, or might reasonably be expected to live with, either party; and
(5) the conduct of each party, defined restrictively but so as to include cases where a qualifying contribution can be shown to have been made despite the express disagreement of the other party.
Of these discretionary factors, item (1) above shall be the court's first consideration.
In making an order to share economic disadvantage, the court shall not place the applicant, for the foreseeable future, in a stronger economic position than the respondent.
The following range of orders should be available to the court:
(1) lump sums, including payment by instalment, secured lump sums, lump sums paid by way of pensions attachment, and interim payments;
(2) property transfers;
(3) property settlements;
(4) orders for sale; and
(5) pension sharing.
Unlike on divorce, periodical payments should not generally be available. In so far as the scheme is engaged, it should apply between the parties to the exclusion of the general law of implied trusts, estoppel and contract.
Procedural and costs rules must be carefully framed to protect the parties from oppressive litigation and to preserve court time and resources. In particular, the rules must prevent parties who are eligible cohabitants from bringing claims under the general law of implied trusts, estoppel and contract on the basis of facts which constitute qualifying contributions under the scheme.
We recommend that goods given to one party by the other should not comprise a retained benefit, nor should it be possible to mount a claim for economic disadvantage on the basis of making such gifts, unless it can be proved by the donor that the gift was conditional upon the cohabiting relationship continuing.
We recommend that the promotion of mediation as an alternative to court proceedings be facilitated wherever possible by the rules.
We recommend that the scheme should include anti-avoidance provisions modelled upon section 37 of the Matrimonial Causes Act 1973, and similar provisions for the enforcement of orders.
We recommend that claims for financial relief should be brought within two years of the parties' separation.
We recommend that there be a general discretion vested in the court to extend the two-year limitation period for making a claim, to be exercised in exceptional circumstances only.
PART 5 COHABITATION CONTRACTS AND OPT-OUT AGREEMENTS
We recommend that legislation should provide, for the avoidance of doubt, that, in so far as a contract ("a cohabitation contract") governs the financial arrangements of a cohabiting couple during their cohabitation or following their separation, it should not be regarded as contrary to public policy.
We recommend that statute provide that opt-out agreements shall be taken to have been made for valuable consideration.
We recommend that an agreement which is in writing, is signed by the parties, and makes clear the parties' intention to disapply the statute, should be enforceable as an opt-out agreement in place of our recommended scheme.
We recommend that agreements that purport to disapply the statute but do not comply with these qualifying criteria should be of no effect when the statutory scheme is invoked.
We recommend that pro forma agreements be made available for the use of cohabitants who wish to make opt-out agreements.
We recommend that parties should be able to enter into an opt-out agreement whether or not they are eligible cohabitants at the time that the agreement is made.
We recommend that minors should be capable of entering into opt-out agreements, but that such contracts should be voidable (in accordance with the general principles of contract law) at the instance of a party who was a minor at the time that the agreement was made.
We recommend that a court should be entitled to set aside an opt-out agreement if its enforcement would cause manifest unfairness having regard to:
(1) the circumstances at the time the agreement was made; or
(2) circumstances at the time the agreement comes to be enforced which were unforeseen when the agreement was made.
We recommend that there should be a period between the legislation being enacted and implementation of the scheme for financial relief during which cohabitants should be able to make an opt-out agreement.
PART 6 SUCCESSION ON DEATH: INTESTACY AND FAMILY PROVISION
All recommendations for reform of the Inheritance (Provision for Family and Dependants) Act 1975 are contingent upon the implementation of our recommended scheme of financial relief on separation.
We recommend that the Inheritance (Provision for Family and Dependants) Act 1975 ("the 1975 Act") be amended so as to provide the same definition of "cohabitant" as that used to define eligibility to apply under the statutory scheme for financial relief on separation.
We recommend that a person ("the applicant") should be entitled to apply for provision under the 1975 Act as a cohabitant where the applicant was living in the same household as the deceased immediately before the deceased's death and:
(1) either:
(a) the applicant and the deceased had so lived for a period of two years immediately before the deceased's death, or
(b) the applicant and the deceased had a child together; and
(2) that the court should not have discretion to dispense with these requirements.
We recommend that a person ("the applicant") who was no longer cohabiting with the deceased immediately before his or her death should nevertheless be entitled to apply for provision as a cohabitant under the 1975 Act:
(1) if at that date the applicant had made a valid application for financial relief on separation which had not yet been determined; or
(2) although no such application had been made, the applicant was still entitled to make one (if necessary, subject to the court granting permission to extend time for such an application to be made or setting aside an opt-out agreement).
We recommend that in the case of an application for family provision by a cohabitant under the 1975 Act:
(1) "reasonable financial provision" should mean such financial provision as it would be reasonable in all the circumstances of the case for the applicant to receive, whether or not that provision is required for the applicant's maintenance;
(2) in addition to the matters to which the court is currently required to have regard, the court should be required to have regard to:
(a) the provision which the applicant might reasonably have expected to receive in proceedings for financial relief on separation if the applicant and the deceased had separated on the day on which the deceased had died;
(b) if relevant, the fact that the applicant was no longer cohabiting with the deceased immediately before his or her death.
We recommend that:
(1) when it makes an order for financial relief on separation, the court should be entitled, on the application of either party, to order that the other party should not on the death of the applicant be entitled to apply for family provision under the 1975 Act; but
(2) where cohabitants have entered into an agreement purporting to restrict application under the 1975 Act, that agreement should not be effective to bar entitlement to make such a claim.
PART 7 JURISDICTION AND APPLICABLE LAW
We recommend that jurisdictional rules for our recommended scheme be drawn from those contained in Brussels II Bis, but restricted to actions where:
(1) the parties are both habitually resident in England and Wales;
(2) the parties were last habitually resident in England and Wales and one of them still resides here; or
(3) in the event of a joint application, either party is habitually resident in England and Wales;
provided, in cases (1) and (2) above, that over half of the cohabitation took place in England and Wales or that immediately prior to their separation the parties had cohabited here for a period equivalent to the minimum duration requirement.
We recommend that where an action is brought under our recommended scheme, the English court should have a discretion to stay proceedings if there are proceedings pending in another jurisdiction in relation to financial relief for cohabitants following separation.
We recommend that the law of England and Wales should be the governing law in all cases arising in an English or Welsh court concerning:
(1) financial relief on separation; and
(2) opt-out agreements.
(no subject)
Date: 2007-07-31 11:54 am (UTC)If I opt-out (as I would if I were living with someone) it would be because I wouldn't ever want these proposals to apply to me. I don't want the govt interefering in my finances because a relationship has broken down. For me that holds even if my partner has become permanently unable to work or if my partner is working reduced hours to look after our children. I can only see myself losing out if these proposals were applied to me and as a competent adult I ought to be able to effectively contract out of them.
(no subject)
Date: 2007-07-31 12:05 pm (UTC)The text is:
We recommend that a court should be entitled to set aside an opt-out agreement if its enforcement would cause manifest unfairness having regard to:
(1) the circumstances at the time the agreement was made; or
(2) circumstances at the time the agreement comes to be enforced which were unforeseen when the agreement was made.
...i.e. it requires that the unforeseen change in circumstances has led to manifest unfairness. I guess the intent is things like crippling accidents.
The text as stated doesn't let a court from setting aside in the face of manifest unfairness having regard to circumstances which arose after the agreement but which were foreseen, which seems a little odd given that it does take into account the known circumstances at the time of signing.
(no subject)
Date: 2007-07-31 12:19 pm (UTC)(no subject)
Date: 2007-07-31 12:32 pm (UTC)If you and Mark live together for ten years then split up then one of you might have a (financial) claim on the other.
The nature of the claim would depend how much the richer had benefited, or the poorer lost out, due to the poorer's contributions to the relationship on the needs and obligations of both of you, on any children involved, etc.
It's recommended that it be possible to opt out of this by mutual agreement, though a court would be entitled to ignore that if the result was "manifestly unfair" (plus some other conditions).
(no subject)
Date: 2007-07-31 01:02 pm (UTC)If something like this becomes law, I predict a tabloid campaign against it and some well-publicized miscarriages of justice early in the implementation.
(no subject)
Date: 2007-07-31 01:33 pm (UTC)