Divorce law criticised as 'incomplete and uninformative'
laws in England and Wales are so "incomplete and uninformative" that judges receive no guidance about the fairest way to divide a couple's property, the Law Commission has said.
Judges get no proper guidance on whether to divide a couple's assets equally or according to each partner's needs, and there are no proper rules on how to divide belongings accumulated before the marriage began, the organisation cautions.
There is also no legal definition of what constitutes the financial needs of a spouse or clarity about the extent to which divorcees must carry on supporting one another.
Highlighting fundamental flaws at the heart of the family courts system, the Law Commission is launching a consultation on Tuesday on the reforms necessary to improve outdated regulations.
The divorce laws have not changed since their liberalisation in 1969 despite a succession of landmark cases and the advent of pre-nuptial agreements.
"When two people bring their marriage or civil partnership to an end it is vital that the law is able to help them resolve their financial arrangements as quickly and fairly as possible," said Professor Elizabeth Cooke, the law commissioner leading the review. "The current law creates too much potential for uncertainty and inconsistency."
The consultation paper is highly critical of the deficiencies of the current legal framework. "There are detailed statutory provisions about the orders that the court can make in these circumstances," it states, "but the statute does not say what the court is to achieve by making these orders.
"The judge in the family court has been compared to a bus driver, who has been told how to drive the bus and told that he must drive it, but has not been told where to go, nor why he is to go there.
"Couples who do not go to court have to make their own financial arrangements by agreement. In doing so they need to know what their rights and obligations are, and the fact that the law is incomplete and uninformative does not help them."
As well as considering needs, the consultation will look at the law governing the allocation of "non-matrimonial property" – the possessions a couple bring to their marriage or inherit rather than acquire together in the course of the partnership.
Current rules are unclear but generally state that once needs have been met, such non-matrimonial property "is less likely than other property to be shared on divorce or dissolution".
Three possible objectives for the courts to consider in divorce are set out in the consultation paper. The first option would be to compensate the needs of the less well-off spouse, so that he or she can attain the living standard they would have achieved but for childcare and other marital choices.
Alternatively, the courts could consider providing support "to enable a transition to independence" that equalises the living standards of the couple for a lengthy period.
The third possibility, the commission suggests, is "to create incentives for independence" rather than "encouraging dependency" on ex-partners. Artificial time limits for support might help but the commission says it is not attracted to Scotland's system of placing a three-year limit on support following divorce.
The commission is due to publish recommendations for reform based on the consultation next autumn. It will include an earlier consultation on the enforceability of prenuptial agreements and form the basis for a draft bill to be introduced to parliament.
Law firms expect the number of prenuptial agreements to rise sharply. Their legal status was bolstered by the supreme court's in October 2010.
Andrew Newbury, head of the Pannone legal firm's family, private client and wealth management division, said: "Prior to 2000, the main logic behind divorce settlements in England and Wales was meeting the needs of the financially weaker spouse. That changed with a ruling in the case of Martin and Pamela White, which introduced the idea of an equal share based on someone's contribution to the success of a marriage.
"In recent years, a great many multimillion [pound] settlements have been based on the same rationale, arguably along with the reputation of our courts as being 'wife-friendly'.
"The Radmacher ruling effectively said that individuals should be held to a properly drafted prenup, as long as it met their needs and they had signed of their own volition, even if the division of assets seemed unfair.
"If the Law Commission proposes that the government enshrines that position in law, it will only fuel what we have seen in the last 18 months or so – an increase in the number of prenups being taken out by those seeking to protect their wealth and those embarking on second marriages."
Pannone says it has seen a fourfold rise in clients taking out prenuptial agreements since the Radmacher ruling.