(14 years, 1 month ago)
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Baroness Deech
To ask Her Majesty’s Government whether they will introduce legislation to ensure that financial provision on divorce is determined on fair and settled principles.
Baroness Deech
My Lords, it is fortunate that I am asking this Question of the Government today about financial provision. Not only is this an issue of great importance that has not been addressed by Parliament for some 40 years but on this very day it has also been announced by the family law review project that, in an effort to save legal aid and reduce antagonism between parents, mediation will have to be attempted before parties are enabled to litigate about their children after divorce. One of my themes is that mediation and changes to procedure to reduce litigation cannot succeed if the substantive law is uncertain and unfair, as I shall explain. Moreover, we will receive very shortly the judgment of the Supreme Court in its first case on the validity of prenuptial contracts. This, too, is highly significant as a method of reducing conflict on divorce.
Your Lordships may wonder why I am addressing this issue. It is because of a lifetime spent teaching and lecturing on divorce law and being in receipt of the views of the many who write to me about it whenever I speak in public. If, by any chance, your Lordships regard some of my views as idiosyncratic, that is the privilege of a Cross-Bencher. I assure your Lordships that I have a solution to the problems that I outline, one which is tried and tested, and widespread. I emphasise that I am speaking not in my capacity as chairman of the Bar Standards Board but in a purely personal and academic capacity.
London’s reputation as the divorce capital of the world is deserved. It has prompted a surge in divorce tourism such that one in six divorces has an international element because of the high-profile financial settlements among wealthy divorcing couples where generous awards are made to ex-wives. However, the majority of families going through the courts to settle their financial disputes on separation face very different challenges in the quest for fairness. English law relating to financial provision on divorce has proved to be unfair, uncertain and expensive. It is based on out-of-date stereotypes. It is out of step with the laws of other European countries; it is out of step with divorce law itself; and it has remained largely unrevised by Parliament for decades. Its deficiencies are obstacles to a more consensual and cheaper resolution of financial issues on divorce. This is especially important and damaging in its effect on the welfare of children after divorce. Moreover, reform would save legal aid and costs.
Successive judgments in the House of Lords and the Supreme Court have reflected the judicial view of changes in family life but have brought about confusion in the law and in principle. This makes firm legal advice leading up to settlement almost impossible in wealthy cases and racks up the cost of litigation. A case called White v White was thought to have pointed towards a yardstick of equality of division but that has moved away again. Subsequent judgments have emphasised the themes of needs, compensation and sharing, although it remains unclear how they interrelate with each other and with the statute. All the circumstances and all the assets are available for consideration but some recent cases have suggested that there may be a category of assets that should remain with one spouse in certain conditions. No wonder that spouses resort to illegal seizure of financial documents from the other—a practice castigated in the Imerman judgment. Yet how else might some wives find out what their husbands earn? Our judges mean well but the price of flexibility and micromanagement is delay, uncertainty and expense.
There are cases where the costs of litigation have exceeded the value of the assets in dispute. Mr and Mrs White spent £500,000 in costs to settle the ownership of £1.5 million. Mr Miller is taking the Government to the European Court of Human Rights on the ground that divorce laws are so uncertain that they infringe his human rights. The statutory principle of a clean break between spouses has faded. There are cases when spouses come back to court after a quarter of a century of living apart to seek a change in the maintenance level. Quarrels can never be put to bed. There is enormous public anger, especially among those who have been involved in divorce. They find this state of affairs unjust and immoral. They do not see why maintenance continues to be paid to an ex-wife who is pregnant by, or living with, another man, or why conduct is not taken into account. The theory of divorce is that it arises from irretrievable breakdown of the relationship without fault but in reality this is not how it is seen in most cases by the parties.
Well-off wives—a new category—especially those with high earnings of their own, do not see why they should have to transfer their assets to an ex-husband whom they regard as having treated them badly. Let me quote from one or two of the many letters that I received after lecturing on this. One is from a divorcing wife:
“the law is supporting his efforts to take away my home”,
and savings in order to support him, his girlfriend and child.
One is from an ex-husband:
“a complete travesty of natural justice being foisted on me by the present law”.
Poor ex-wives will hardly get by and maintenance for children is a vital issue for which, unfortunately, there is no time this evening. The law rewards most significantly the non-working wife of a wealthy man—almost regardless of the length of the marriage, children and contribution. The message given out to young women is that their life’s success has to be tied to finding—and, perhaps, divorcing—a man of means, rather than working to support themselves. Awards worth millions of pounds are made to the ex-wives of pop singers and footballers. Many divorce awards are sums greater than a working woman will earn in a lifetime of salaried employment.
The law does not even recognise prenuptial agreements as legally binding. The judgment on that in the Granatino case is imminent, but at the moment we have the worst of all worlds. It has been hinted that they might be binding, but a court can only decide agreement by agreement whether that is so or not, so more litigation may ensue in determining whether the contract is to be upheld.
It is high time that English spouses, like those on the continent of Europe, were treated as adults, able to bring certainty to their financial affairs on divorce and avoid litigation by deciding for themselves what to do. It would be ironic if our law refused to recognise prenuptial contracts entered into voluntarily while we are considering imposing a matrimonial financial regime on cohabitants who have not consented to it. The law is in any case not fit to apply as it stands to cohabitants.
It is time to move to a European law for the division of matrimonial assets, commonly known as community of property. The courts of most European states have less flexibility. Awards are lower and there is more certainty because the principles have been laid down in advance and agreed to. Most European and some North American states have community of property schemes that apply to divide post-maritally acquired property equally on separation. Assets owned before marriage are excluded. Couples may agree to keep their property separate if they prefer. Maintenance awards are lower because it is assumed that wives will work, and inheritances remain with the inheritor. However, the UK is resisting the moves to harmonise European matrimonial property law. The rest of Europe seems to take the hard-won principles of feminism and equality rather more seriously than we do. Even in Scotland, there is a very different approach. Maintenance awards are normally for three years only, unlike lifetime awards in England, and the matrimonial property is split.
The Law Commission tried to find consensus, with attempts at formulating a law about sharing homes and another about cohabitation, but has failed, in that there is no national agreement about what to do. The Government have to take the initiative on this for the sake of children and costs. They should legislate for the introduction of the European system of community property and the validity of contracts about these issues made between spouses and other adults. That would also have the benefit of removing the temptation for European divorcees to come to England for dispute resolution in our courts. It is not a perfect solution; it is a blunt instrument, which will not universally be seen as fair; but the advantages outweigh the disadvantages, and no better solution has been proposed. It would save money and reflect real equality between husbands and wives.
It is time for the Government to allow time for debate to face up to the resolution of modern ways of living in families and easy divorce. It is time to call for reform, not by judges struggling to cope, but by our legislators.
Lord Grantchester
My Lords, I speak with a large amount of trepidation since I have very little knowledge and no expertise on the subject. I reflect that for many people caught up in the experience, divorce is something that they did not want or expect and that they are unwilling participants in the process. I should like to pay tribute to the noble Baroness, Lady Deech, whose words on the subject resonate most with me. The disagreements on the merits of differing contentions reflect the uncertainty surrounding financial dispute resolution—FDR—as legal teams, in seeking to provide advice, are compromised between interpretations of recent cases. It is an unsatisfactory state of affairs. I should like to support and give oxygen to the noble Baroness’s voice and to thank her for her perseverance in raising this matter, which affects, sadly, far too many of us.
I learn in today’s Telegraph that last year there was a 16 per cent increase in divorce. I also support the noble Baroness’s call for legislation. Surely it is for Parliament to pass legislation and to set the framework for the judiciary to interpret. I am sure that there are judges who are uncomfortable with the present position. For a person not to know to any degree where a case will settle or to be subject to the lottery of what view the judge attached to the case will take places unnecessary strain and leads to participants taking extreme positions in an endeavour to tilt the landscape. It will be difficult to define fairness in the present contentious climate. Fairness is an overclaimed parameter today. It is one of those motherhood and apple pie attributes against which no one can contend. I am reminded of the Bob Dylan song of my youth, “With God on Our Side”.
That London is described as the divorce capital underlines the fact that the UK is out of step. It draws one side to precipitous action rather than reconciliation and inevitably therefore to higher cost. I am left to reflect that divorce is seen by most high-value cases as a one-way bet for wives and that invariably the husband better agree to everything as he is only going to pay anyway.
I shall speak to only one feature: prenuptial agreements. This, more than any other feature, would be instrumental in dissipating the heat in FDR, would immensely simplify the process and largely negate the need to value assets. Thus it would reduce costs. It should not be necessary to have to await the slow progress of disputed cases setting case law to correct this anomaly. I will take my own advice and refrain from voicing further thoughts on what is indisputably the most dramatic aspect of life for far too many today.
Baroness Meacher
My Lords, I rise to give strong support to the case for reform so well presented by my noble friend Lady Deech. For the past 20 years or more I, and no doubt pretty much everyone I know, have watched friends, colleagues and relatives go through the divorce process, spending tens of thousands of pounds and more on legal fees and ending up with a settlement that seemed grossly unfair to one side or the other. The law on divorce, now 40 years old, was drafted when women typically remained at home to look after the children for many years and when the male parent had overwhelming power over the financial resources of the family. I ran the campaign for the Child Poverty Action Group in 1971 as part of a national debate that resulted in the establishment of child benefit. At that time I received more than 2,000 letters from women of all social classes, including the wives of doctors and vicars—the most extraordinary people, I have to say; I was very surprised by those letters—and many others who told me that the family allowance, as it was then, was the only money on which they could completely rely. No wonder that the divorce law passed in 1973 was based on the assumption that women were the helpless victims.
The world today is very different. It is now assumed that women work. The welfare benefits legislation passed this year assumes that mothers on benefits begin planning their return to work when their youngest baby reaches the age of one. Work-related interviews, followed by work-related activities, all prepare mothers for the world of work as soon as they can turn around after the birth of a child. I and other noble Lords argued at the time that for all sorts of reasons—the ill health of young children, disability and so on—the legislation expected mothers to return to work too soon. I still hold to that view. From the point of view of this debate, the essential point is that the benefits regime makes clear that our British state no longer expects mothers to remain at home once children are settled even in nursery.
As the noble Baroness, Lady Deech, explained so well, Europe and Scotland now have divorce laws fit for the 21st century. These laws are based on some very important principles. Probably the most important point is that the principles should be clearly elaborated and established so that both sides in a marriage, right from the start, can anticipate what a divorce would mean for them. The fair point has been made that there are young women today who literally see that the best thing to do is to marry a very rich man. Those women will undoubtedly end up in a divorce court.
In my view, the principles should include the principle that only the property acquired during the marriage should be divided and that inherited wealth should not be included, as the noble Baroness, Lady Deech, has said. Future earning streams should not be taken for granted; lifetime awards are unfair and unacceptable and, in my experience, have led to men, fathers, living in tiny bedsits while they fund the home of their ex-wife. This cannot be right. That both men and women have earning power is an essential assumption that should lie behind these laws. This assumption lies behind the case for time-limited awards. As has already been mentioned, Scottish awards are for three years. Any award should support the family at least until a child reaches and is settled in school. However, that is very different from a lifetime award. Both men and women can be assumed to earn when a child is settled in school. I feel very strongly that the conduct of the parties will continue not to be taken into account. This is essential to avoid the evils of allegations and counter-allegations forming the basis of lengthy and sordid court hearings.
I welcome the plans to overhaul family justice and to move to a system where divorce will be substantially resolved through mediation or, in more complex cases, through “court-lite” shorter and simpler hearings. The drive to reduce the £1.6 billion cost of the family justice system will undoubtedly drive reform. I appeal to the Minister to press for a reform of the law on financial provision in divorce at the same time as the reform of divorce proceedings.
Finally, on the matter of prenuptial agreements, which again has already been mentioned, the Appeal Court judges made plain their view that the existing law under which prenuptial agreements are not enforceable is patronising and outdated. This country surely must come into line with Europe in providing for prenuptial agreements to be enforceable. I would be grateful for the Minister’s views on the need for reform of the law on financial provision in divorce, and on the particular point on prenuptial agreements.
The Lord Bishop of Blackburn
My Lords, I am most grateful to the noble Baroness for this debate.
Love has always been recognised as the most costly emotion, and traditionally it has been valued in terms of personal commitment rather than economic obituaries.
“How priceless is your unfailing love”,
the psalmist wrote of the God whose love is so great that it “reaches to the skies”. The recent valuing of love—or, rather, its failure—in multimillion pound divorce settlements, in which a significant number of those listed had earned their fortunes in the entertainment industries, ranged from the reputed £7.5 million to £12.5 million paid by one celebrity when their 22 year-old marriage foundered, to the £75.5 million an American rock star settled on his former wife. When a famous film director paid his former wife £50 million, he was believed to retain a further £50 million for day-to-day necessities.
This surely goes to the heart of our debate today, for I understand that this settlement began as a prenuptial arrangement. The cynic could argue that failure was costed into the price of this couple’s original devotion. Such settlements, no doubt much loved by legal and financial professionals who profit from them, are in danger of reducing marriage to the economic bargaining of historic marriage contracts and of cheapening sacred commitments into balance sheets. Let us override cynicism with Christian realism. Of course we encounter a strong objection to the tenor of such requested legislation, for in a Christian understanding of marriage such prenuptials weaken and dilute our marriage vows of lifelong commitment, where sacrificial love forms the bedrock and the core. The established church’s marriage service includes this moving, mutual commitment:
“All that I am I give to you, and all that I have I share with you”.
This states the deepest possible giving and gifting, with nothing held back in personhood or economics. These commitments, made before God and all those attending a Christian wedding service, look confidently towards a new, positive and progressive relationship in the unfolding history of human love. There is no suggestion here of an economic breakdown kit, poised for use if dreams fade or demands surmount expectations.
But let us be clear: this is not to deny that, tragically, many marriages fail and that, as the noble Baroness requests, “fair and settled principles” should safeguard legally required settlements. Nor is it to deny claims that marriage may be limited among older people unwilling to formalise relationships without agreements safeguarding responsibilities to family members from former marriages.
But such considerations, valid as they are, can also detract from a more demanding duty of this House: that of supporting the primacy of marriage rather than legislating for its dilution, and leading our nation in reasserting positive principles rather than writing provision for failure into a sacred institution created for lifelong blessing and support.
Perhaps the problem with this requested legislation is that, like much current policy and resources, it concentrates on the ending of relationships rather than on supportive foundations for their future. Like the prenuptial agreement, it raises the spectre of relationship disease, with all the consequent emotional and economic costs of family courts, mediation, child support and associated issues, rather than hoping, planning and praying for the emotional health of marriage and offering significant support.
In a society deeply wounded by divorce, the balance of resources should be devoted to relationship education and marriage preparation, and to supportive healthcare for marriage rather than ambulance-chasing after divorce settlements. If more attention was given to this area of our nation's life, we would not have to spend so much time debating what happens when relationships end, and our society would be stronger and more stable as a result.
Baroness Deech
Is the right reverend Prelate aware that in many Catholic countries in Europe, where the divorce rates are much lower than they are in this country, the sort of system that I have recommended prevails? I refer to France, Italy, Spain and so on. They have much lower divorce rates, but they also have the system that I have proposed, which might support rather than diminish the institution.
Baroness Murphy
My Lords, I am no lawyer, and I really do not know much about divorce law, but I have been through a divorce, which has led me to observe what happens in the courts. It was a long time ago, before the case of White v White in 2000, but it led me to think about how the law treats marriages and what we might do about it. I have a great deal of sympathy with the ideas expressed by the noble Baroness, Lady Deech, on how we might move forwards.
On “Desert Island Discs” recently, Kirsty Young asked Fay Weldon how she felt when her husband of 30 years left, and she said,
“I thought I would go mad”.
That captured for me the exact sense of disorientation, disbelief, anguish and despair that I felt when it happened to me—an infinitely greater loss than bereavement, it seemed to me, since you lose your entire notion of who you have been for 50 years. The rather disdainful approach that I had previously taken in a secure marriage, as I thought it, to people whose marriages had collapsed naturally disappeared very quickly. If I can talk about this subject now with equanimity, it is because it all happened more than 13 years ago and I have had the good fortune to marry again.
I sought out the very best divorce lawyer I could, as did my husband. He was a businessman, and our affairs were very complicated with businesses and homes abroad as well as here. I was the joint owner of some of them and not others, so noble Lords can imagine that it was a very difficult matter to tease out the ownership of these various possessions. But we were both very determined from the outset that we would remain close friends and stay close to each other’s families. Did the lawyers help? They were the very best, nicest people and were even personal friends with each other, but several weeks down the line the adversarial system had us both with barristers lined up and cocked at the ready, ready for the courts to proceed. We were both getting more desperate, not less. We had a chat about it and said that we thought we could probably do a better job ourselves, so we went off to the pub and went line by line down all our assets and decided how to divvy them up. Some of the assets, of course, had more financial value but less emotional value, while others had more emotional value and less financial value. We simply went back and sent a joint letter to both our solicitors saying, “Please get on with that—that is it, please”. We were not very popular with our solicitors, but I know that any more fighting would have destroyed our future relationship. Having dealt with the separation agreement to our mutual satisfaction, we could then start to deal with the rest.
I realise that many couples will not be able to negotiate in this way. Often one spouse is much stronger than another and sometimes there are few feelings left for the other person. Anger turns to revulsion very quickly. People will behave badly if they can get away with it, and men and women are equally to blame for bad behaviour. Yet I believe that if we had had a skilled mediator in place, we could have solved many of these difficulties from the outset. I particularly liked the introduction in 2003 of the collaborative legal practice arrangements, where people sit down with their lawyers, outside of court, and do it together in a low-key way, still having joint conversations and avoiding the expensive court battles. It seems to me that people ought to go through that first, as a sort of obligatory phase.
Where children are involved, it seems to me that an adversarial court situation is, frankly, bonkers. It is expensive, detrimental to the health of children and leaves scars between the parents that are unlikely ever to heal, meaning that children, in effect, often lose one parent entirely. Frankly, I do not see why legal aid should be available to allow unhappy people to continue mutual squabbling over the possession of their children—and how often have we seen that?
The noble Baroness, Lady Meacher, and I share an office with the noble Baroness, Lady Howarth, who is the chair of CAFCASS. The horrific stories that she tells of the sort of things that children are subjected to in courts while being fought over makes your hair stand on end. As one American lawyer said, the parents declare war and then draft the children. Disputes should be settled out of court through mediation and dispute resolution by non-adversarial professionals. We have an edifice of family courts whose raison d'être we should question. I understand that 95 per cent of divorces in the US are now completed through mediation and/or legal collaboration. Surely, we should aim for that here.
However, what about the very wealthy and the underlying principles? It seems to me that the basic premise of White v White in 2000 is right. The law on the needs basis had not kept up with changes in society. In most cases, the courts were trying to satisfy the needs of both parties with limited resources. The noble and learned Lord, Lord Nicholls of Birkenhead, emphasised that there could no longer be gender discrimination when determining the allocation of ancillary relief. He said,
“If, in their different spheres, each contributed equally to the family, then in principle it matters not which of them earned the money and built up the assets. There should be no bias in favour of the money-earner or the child-carer”.
The House of Lords also recognised that, by being at home and looking after young children, a wife may lose forever the opportunity to acquire and develop her own money-earning qualifications and skills. To a great degree, that is still so. The noble and learned Lord, Lord Nicholls, also said that the judge,
“would always be well advised to check his tentative views against the yardstick of equality of division”,
and that it seemed to him that equality should not be departed from, apart from with good reason. All of that seems absolutely right.
What do we do about foolish men with large fortunes who get hitched to gold-diggers, then find themselves divorced a few years later? My heart does not bleed for them very much; no, men and women will always be fools in love and there is surely scope within the principles of White v White for adjustments to be made. As Simon Cowell—he is the one on the other side when the rest of us are watching “Strictly Come Dancing”—recently said:
“Marriage is an outdated contract … I don't believe in marriage, certainly not in this business”—
I suppose that he means show business. He said:
“The truth is that you get married and in a year or two they clean you out”,
so he is wisely remaining single for now. He is engaged instead, which seems to be an end point rather than a plan to do anything else in the future.
I am rather ambivalent. I am very attracted to the right reverend Prelate’s view that once you marry someone, you are forming a partnership more than a temporary arrangement. You are making a life and committing yourself to that person. On the other hand, we must recognise that there is a force to be had in saying that in the modern era, having some sort of premarital arrangements or commitment would probably be more sensible. So the answer is for us all to have prenuptial agreements when we embark on the journey, however wealthy or impoverished we start out. Making them legal would at least be a partial step towards the sort of reform that the noble Baroness, Lady Deech, is advocating.
My final point is about the no-fault divorce system. It must be sort of right; we cannot expect the courts to weigh up all the various causes and hurts between individuals. Rather than a no-fault divorce, though, I would like to see the notion that it is everyone’s fault—in other words, that the two people have somehow contributed to this failure overall, and that ought to be recognised when people are going before mediation and the collaborative legal system.
My solution for the moment is a universally legally binding prenuptial agreement, but I still rather like the idea that we have to take on the notion that when we marry, we do so for life.
Lord Davies of Stamford
My Lords, having heard the lucid and persuasive speech of the noble Baroness, Lady Deech, I wanted to take the opportunity to rise in support of what she said. We all know that the divorce law at present is complete chaos. From time to time, what has appeared to emerge from the jurisprudence as a guiding principle, like the 50:50 rule or the clean-break rule, has for some reason subsequently been set aside at the next judicial decision, so there is simply no clarity. The present system could hardly be better engineered if it were designed to maximise uncertainty and, therefore, legal costs. Some cynics would say that there is a certain category of humanity that would be very attracted to a model of that kind, but far be it from me to make such a comment myself.
The present situation with general divorce law seems to be difficult. The solution must be, as the noble Baroness has suggested, to look for some guiding principle. Perhaps we should look for that guiding principle in the Roman law examples on the Continent. I think I am right in saying that in some Continental jurisdictions, parties have a choice of regime: they can choose communauté de biens, which rather corresponds to what the right reverend Prelate was talking about a moment ago—“Everything I have, I give you”—or séparation de biens. In Scotland, we have an example of a Roman law jurisdiction that has adopted the séparation de biens principle, which is that when you enter into a marriage you keep separate everything that you bring to it, and the only assets or revenues that can subsequently be divided are those that have been accumulated since the marriage. That needs to be looked at; I understand that it is a model that works reasonably well north of the Border. I do not want to decide today what the solution should be, though; I merely urge that it is our responsibility to find one.
With regard to prenuptial agreements, I congratulate the noble Baroness on her brilliant timing: we are expecting a judgment this week from the Supreme Court on this matter. The situation with regard to such agreements is equally confused and equally unacceptable: we have a divorce law that takes one view about prenuptial agreements but which is overridden by the Appeal Court, and then we might have a third view from the Supreme Court. That is not the ideal model of the rule of law that we in this country are committed to. Some years ago in the House of Commons I introduced a Private Member’s Bill that would have given legal force to prenuptial agreements, and as a result of today’s debate I am inspired to see if I cannot relaunch an initiative of that kind with similarly minded colleagues in this House.
It has been overwhelmingly demonstrated by today’s debate that it would be a clear abdication by Parliament not to look at this matter again. After all, we are responsible if a law is chaotic, if the jurisprudence is unclear and if judges find it impossible to give judgments that have any degree of consistency or continuity or that would give the jurisprudence some degree of predictability and understandability. That is clearly the case, and that is when the legislature needs to intervene. It is why we have a legislature; it is why we come to this place and why people go to the House of Commons. I hope that before long it will be possible for us to take another look at this, to examine it in the round and to give it the deep attention that the subject deserves. I hope to do a good day’s work by Parliament in that context as a result.
Lord Bach
My Lords, it is not only this House that should be grateful to the noble Baroness, Lady Deech, for raising this subject today, but society in general. This debate is not just interesting, it is significant, because of where it stands in relation to a campaign for reform that now has the push and impetus to make it, in my view, unstoppable. The timing of this debate is crucial in seeing this forward.
I speak with the experience of having been legal aid Minister in the Ministry of Justice until five or six months ago, where obviously this issue, in one particular form, came across my desk many times. I was convinced by the time I left that post that there was need for reform, and considerable reform, of our system of divorce in this country. The latest available figures show that in the United Kingdom, more than 136,000 people were divorced in 2008. That is a declining number in percentage terms, but it always remains an inevitable emotional and financial impact for the individuals and families concerned. Deciding how to divide property and assets and settle the financial arrangements is and always has been one of the big challenges to our system of justice. Few can genuinely say that this system is working and is satisfactory in any real way.
I hope the House will forgive me if I return to the Matrimonial Causes Act 1973, which sets out the principles that the court has to take into account when deciding in each individual case on the division of assets. These include, as many noble Lords will know better than I, whether there is a child; the income, earning capacity, property and other financial resources which each of the parties to the marriage has; financial needs, obligations and responsibilities; the standard of living enjoyed by the family before the breakdown; the age of each party to the marriage and the duration of the marriage; any physical or mental disability; the contribution each party made, including family welfare; the conduct of each party if it is inequitable to disregard it; and the value to each of the parties of any benefit, such as a pension, brought to the marriage which, by reason of dissolution, the party will lose the chance of acquiring.
These principles also help to guide decisions by parties for out-of-court settlements too. However—and it is a big however—the extent to which the principles are useful is affected hugely by the court’s overriding discretion under Section 25. Under this section, the court is required to take into account all surrounding circumstances of the case. Therefore, each case is dealt with on an individual basis according to the facts. Some may say that that is great, but the truth is that it leads to such uncertainty that people end up in court when really they should not.
Let us look at examples from overseas. In many comparable countries, the statutory starting point for dividing matrimonial property on divorce is 50:50. In New Zealand, for example, any departure from the 50:50 rule would apply only where there was, interestingly, an enforceable prenuptial agreement, if it was a marriage of very short duration or there were extraordinary circumstances. The New Zealand system recognises that a person may have separate property that is not subject to the sharing formula unless it merges and becomes matrimonial property such as a family home. In the United States, where each state seems to have its own system, there seems to be a general move towards a simple 50:50 split.
Many couples who get divorced in this country are able to agree on financial arrangements and simply apply to the court for a consent order to be granted. For others, financial arrangement decisions on divorce, as we have heard, are long, expensive and painful. This obviously has a damaging effect on family life in the future when there is a need for parties to stay in long-term contact where children are concerned. Children are often caught, as we have heard, in the middle, with a potential impact on their development and relationships with one or both parties. Allowing the court to have a broad discretion recognises that not all disputes are the same. I will quote, not in the original Russian but from a well known translation, the first lines of Anna Karenina:
“All happy families are alike; each unhappy family is unhappy in its own way”.
The current law has led us to a growing feeling that there is just too much uncertainty for parties who are attempting to create financial settlements on divorce. This takes an enormous emotional toll on parties, as well as being extraordinarily and unnecessarily expensive. The longer it stretches on without being settled, the more stressful it can become. The noble Baroness, Lady Murphy, whom I praise for the frankness and honesty of her speech, gave good evidence of this. Of course, it then does more damage for the vital future.
We on these Benches are very interested in the Government’s plans for changes in this area of law. Do the Government plan to change the principles that guide the court and the parties in determining whether a financial settlement is fair and reasonable? To what extent would they retain courts’ discretion to take into account the individual—but not exceptional—circumstances of parties? How will they calculate a fair formula for maintenance payments where a party is young, with years of future earning potential; or older, following a joint marital decision for one party to forgo their career to care for the children of the relationship instead?
When we were in government we recognised the complexity of financial settlement on divorce. That why we initiated the fundamental review of the family justice system in January this year. We are delighted that the new Government decided to continue with that review and issued their call for evidence in June 2010. I invite the noble Lord, in responding to this debate, to give us what information he can about any preliminary findings from this review. I know it closed only on 30 September but any information that he can give us would be gratefully received.
An amicable divorce is indeed a rare thing. Often there are harsh words, and even deeds, between parties to a divorce, with negative outcomes. That is why the family review looked at the best methods for avoiding confrontational court hearings and encouraging the use of mediation to deliver fairer and less acrimonious settlements that place the needs and interests of children and the parties at the heart of the system.
We are proud of our system here as far as criminal law is concerned. It says that there should be two parties and they should fight it out in court. For criminal law there is a strong argument that that is a better system than systems elsewhere. However, in the sensitive field of family disputes, is it really to be argued that confrontations in court should be the rule, rather than the exception? Is it not much better to look at alternatives to confrontation in court? One of those alternatives is mediation, which has been around for a long time. However, there is—I have heard lawyers say this themselves—a belief that some lawyers in the industry have from time to time merely paid lip service to the option of mediation. In some ways, one cannot blame them because the incentive is to keep the case going. However, if you do that it is unfair to clients and other lawyers, the vast majority of whom make every effort to ensure that cases are not brought to court unnecessarily. I pay tribute to Resolution, a body with 5,500 members comprising solicitors and others committed to using non-adversarial processes with their clients, including mediation and collaborative law, as we have heard.
The question is whether and how we can enhance the use of these processes to improve the family law system. These are very difficult issues. I pay tribute to all those, whether litigators or advocates, who carry out family work. It is a very hard job, which is sometimes difficult and uncomfortable and, on the whole, they do it with enormous skill and probity, and not always for the greatest reward. We on this side of this House think that change must come. I very much hope and believe that the Government are of the same opinion. Our present system is not an option. It is not working satisfactorily for anybody in the system—parties, lawyers, courts or the state. However, change must be thorough, thought out, discussed and, we hope, agreed by consensus.
The Minister of State, Ministry of Justice (Lord McNally)
My Lords, I thank the noble Baroness, Lady Deech, for initiating the debate. The fact that she has done so is fully justified by the quality of the contributions. I start at the end, as it were, by responding to the noble Lord, Lord Bach. I am well aware of his work and concern in this area. I do not think that there is any break in the approach as between the two Governments. We shall build on what the noble Lord did under the previous Government. He has already reflected on there being no silver bullets or quick-fix solutions to this matter and said that it has to be thought through, listening carefully to experience and advice on all sides. As he rightly said, we are dealing with extremely complex financial and emotional issues.
As the noble Lord knows, the justice review to which he referred is conducted by an independent panel chaired by David Norgrove. It will publish an interim report in the spring of 2011, when we will get the first impact of its thinking. The Government will await the outcome of the family justice review before making any firm decisions on comprehensive divorce law reform. However, dissatisfaction and complaints have emerged from all sides in this debate, from those who have gone through divorce and from divorce practitioners. I was not shocked by the speech of the noble Baroness, Lady Deech, as I had seen the letter that she had sent to colleagues, in which she outlined her approach to these matters. I certainly do not consider her views idiosyncratic. I would be a brave man to do so in any circumstances, but particularly so as regards the field we are discussing.
As the noble Lord, Lord Bach, said, we live in an age when there are many divorces. The timely intervention of the right reverend Prelate the Bishop of Blackburn and the contribution of the noble Baroness, Lady Murphy, were right. In all but a few cases, we enter marriage in the belief that it is for life. When it sometimes does not end up like that, it is very traumatic. I am not sure that we are all like the girls in a Manchester school who, when asked in a recent television survey, said that their ambition in life was to marry a footballer as a way to fame and fortune. The implication was that a marriage in those circumstances would be fairly short. However, the right reverend Prelate’s speech resonated for most people in terms of a moral approach to marriage—a determination to try and make it work. The law’s job when breakdown occurs is to try and help as much as it can in ensuring a civilised break.
I listened to the noble Baronesses, Lady Deech and Lady Meacher, and I agree that the independence of women has recently increased enormously. However, I am still not sure that the balance in divorce cases is quite as equal as they imply. As the noble Baroness, Lady Murphy, implied, it can often be unequally weighted against the woman in terms of being able to maintain standards or build a career after divorce. As we know too well from some of our crime statistics, far too many women in this country have to manage dysfunctional families long after the male has gone.
Baroness Meacher
My Lords, I am responding to the noble Lord’s indication that we were implying somehow that the positions of men and women are equal. My concern—and perhaps that of my noble friend Lady Deech, though I should not speak for her—is simply that things have changed a great deal in the past 40 years, and the law was written at a time when the position of women was very different from what it is today. Situations vary. There are occasions when the woman is the all-powerful and rich earner, and others when it is the man. All situations have to be judged on their merits. I did not want the Minister to take that as a suggestion of equality.
Lord McNally
I fully understand and accept that. Things have changed a great deal in the past 40 years, but a lot of things have stayed the same. We have to take both realities into account. In terms of divorce, the lower down the social scale—if that is the right description—the less things have changed. I can quite imagine that the qualified professional woman is able to re-establish herself very quickly. The woman who has been holding a family together but is very much dependent on a male breadwinner is in a very much different situation. I just make the point that when we are looking at reform, we have to ensure, as our system does, that judges consider three principles—need, compensation and sharing, shaped by the overarching requirement for fairness. Each party is entitled to an equal share of the assets of the partnership unless there is good reason to the contrary, but the yardstick of equality is to be used as an aid, not as a rule. Any decision will be based on individual circumstances and needs. The court does not impose a one-size-fits-all solution. Consideration will be given to the potential earning capacity of both parties. Spousal maintenance orders can be conditional and time-limited, ending in any case if the recipient marries again. One-third of divorced couples make an application for ancillary relief, but a large majority of them seek simply a consent order.
Mention was made by, among others, the noble Lord, Lord Grantchester, and the noble Baroness, Lady Deech, of prenups. We await with interest Wednesday’s ruling of the Supreme Court in Granatino v Radmacher. At present, the courts can take into account prenuptial agreements as part of the balancing exercise that judges must undertake in ancillary relief proceedings under Section 25 of the Matrimonial Causes Act 1973. The judges can still apply discretion—
Lord Davies of Stamford
I am grateful to the noble Lord for giving way. He has read out a list of the various arguments and considerations that the courts, under the Matrimonial Causes Act, can take into account, including—to the extent to which they may wish to do so—the existence of a prenuptial agreement. Would he not agree that the problem is that because there is such a range of criteria, principles and precedents, it is impossible in any one case to give professional advice or predict what the likely outcome, or weighting between those considerations, will be? Would he not agree that a law that is not clear is a bad law?
Lord McNally
Certainly, a law that is not clear is a bad law. That is why we will consider carefully the outcome of the Supreme Court decision, and then the recommendations of the Law Commission, which will look at reforming the law. I hope that we will be able to do that with some urgency.
Another issue raised was that of “the divorce capital of the world”. The term has gained traction mainly because of some high-profile cases with large sums involved. However, I noted a comment by Lord Justice Thorpe, who said:
“There are only 17 judges of the family division”—
of the High Court—
“whose primary responsibility is to justice domestically. There they operate under great pressure of work. I question whether there should not be a more stringent allocation of judicial time to cases such as this where the parties have slender connection with our jurisdiction”.
As I said, there has been criticism of the system by the judiciary as well as by those who have to go through it.
Another point made by the noble Baronesses, Lady Deech, Lady Meacher, and Lady Murphy, concerned the issue of mediation. My colleague in the other place, Jonathan Djanogly, said the other day:
“Too often people in family breakdown situations use court as the first answer when they shouldn't. Often it's dealing with contact with children or intimate personal relationships that really shouldn't be going before the courts”.
The Government's view, which is shared by the noble Lord, Lord Bach, is that there is a prospect of putting forward mediation as an alternative to expensive and emotionally charged court proceedings. It is an interesting fact that about 70 per cent of publicly funded cases in which mediation is attempted end up with a successful outcome reached away from the courts, and 60 per cent of publicly funded parties who learn about mediation end up with a successful outcome reached away from the courts. The figures for self-funding parties are similar if not higher. In looking at reform, the Government and many outside experts believe that we should publicise mediation and encourage it to be used much more than it is at the moment.
The contributions from all sides have indicated that our law is in need of examination. That examination is under way: the Supreme Court is considering prenups, while the study group and the Law Commission are also looking at the issue. We hope that, in 2011, those findings and studies will come together, which may be an opportune time to look at a range of reforms to our divorce law, so that it meets real needs and many of the criticisms that have been voiced today.
Again, I thank the noble Baroness, Lady Deech, for raising this issue. I cannot give a snap answer to the question that she has raised in this short debate, but I hope that I have given a sense that we are continuing the initiatives of the previous Administration with a sense of urgency and that we shall look at the matter when the various studies come to fruition.