No-Fault Divorce Is On The Way: What About Financial Settlement Rules?

Date: April 16th, 2019 - Written by: Brookman Solicitors

 

Campaign groups like Resolution, as well as many family lawyers like Brookman Solicitors in London have welcomed the announcement that the government intends to introduce a form of no-fault divorce “as soon as parliamentary time allows”.

Ending the need to blame one party in a divorce is a subject we’ve discussed before on this blog. We hope the new rules will make divorce in many cases less confrontational than at present. Removal of the need to include allegations of adultery or unreasonable behaviour in certain types of divorce petitions should also give couples going through marital breakdown a much greater degree of privacy than has been the case to date.

Some even think less acrimonious, no-fault divorce could lead to quicker, less complicated financial settlements. But despite calls for a simplification of the rules on financial agreements on divorce, there appears to be little government appetite to reform this area of divorce law – for the moment at least.

 

What Do The New Rules Mean If You Are Getting Divorced?

At present you need to establish adultery, desertion or unreasonable behaviour to start divorce proceedings. If you aren’t willing to admit to any of these grounds for divorce you must live separately for two years before starting proceedings. Even then if one spouse doesn’t agree to the divorce you must establish five years’ separation.

Under the proposed new regime:

  • One party will no longer be able to contest the divorce
  • Irretrievable breakdown will still be the only ground for divorce
  • Instead of having to prove adultery or something else you will have to submit a statement of irretrievable breakdown
  • The two stage process (decree nisi and decree absolute) will continue
  • There will be a minimum time frame of six months from petition to decree absolute to allow for the possibility of reconciliation

 

Will The New Rules Affect Financial Settlements?

Technically the new rules don’t have any legal application when it comes to negotiating financial settlements. But as we have mentioned, removing some of the heat from a divorce by eliminating blame may well facilitate a speedier resolution to splitting assets in some cases.

And there are definite moves to try to clarify the rules on division of assets and to reform the law in this area. Many believe the current regime, where there is no fixed formula for splitting assets gives judges too much discretion. This sometimes makes it difficult to know in advance what a final court order might look like. And this in turn can act as a disincentive to parties to negotiate an agreement when it’s actually in their best interests to do so.

 

Proposed Reform Of Financial Rules

Baroness Deech in the House of Lords is championing the idea of reform. Her Divorce (Financial Provision) Bill, proposes the following:

  • Making the starting point for division of assets on divorce a 50/50 split of the net value of the matrimonial assets acquired during the marriage. Courts could then consider a number of factors, including:
    • Any agreement between the parties about ownership of specific property;
    • Dissipation of assets
    • The needs of children
  • Assets acquired before the marriage would be excluded
  • Inheritances during the marriage would be ring-fenced unless the needs of one party justified including them in any division
  • Maintenance would only be payable for five years
  • Statutory recognition of pre and post nuptial agreements

Baroness Deech’s bill has been approved by the House of Lords and is now due for discussion in the House of Commons. There are many criticisms of the proposed reforms, not least the idea that there could be a ‘one size fits all’ approach to finances when every family’s financial foundations are different. Some also believe the five-year maintenance limit will unfairly penalise a spouse who may have given up a lucrative career to care for children.

 

The Future Of Financial Settlement Rules

It took three decades of campaigning to get to a point where no-fault divorce became government policy. The current rules on financial settlements date back to 1973 and one well-known family lawyer has described them as ‘archaic’. Baroness Deech’s bill is unlikely to become law in its current form. But the starting pistol on reform of the rules governing financial settlements on divorce has been fired – and it’s an area that many family lawyers and divorcing couples agree is ripe for reform.

For further advice on divorce and other aspects of family law please call us on 44 (0) 20 7430 8470 or contact us online.

 

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