Divorce (Financial Provision) Bill [HL]

Lord Hope of Craighead Excerpts

Friday 27th June 2014 Lords Chamber

[Lord Hope of Craighead (CB)]

My Lords, I, too, welcome this much needed Bill and congratulate the noble Baroness, Lady Deech, on bringing it forward. I know that it is the product of a great deal of thought and hard work on her part. I think we must all be grateful to her for that and for providing us with the opportunity to debate her proposals.

The measures that the Bill contains are of particular interest to me for a variety of reasons. First, to a very large extent, they bring the law of England and Wales about financial provision and property adjustment on divorce in line with the law of Scotland, as the noble and learned Lord, Lord Mackay of Clashfern, told us. I should add that I lived and worked with that system in the Court of Session for about 10 years before I came to this House as a Lord of Appeal in Ordinary in 1996. Secondly, I had something to say about that system in the high-value divorce case of Miller v Miller in 2006, which I will come back to in a moment. Thirdly, the provision about prenuptial and post-nuptial agreements recalls for me the case of Radmacher v Granatino, which was heard four years ago in the Supreme Court by nine justices, of which I was one. For all the reasons that the noble Baroness has given, legislation on these matters has for far too long been delayed and is now badly needed.

Perhaps I may start with the provisions about matrimonial property and periodical payments. These are closely modelled on Sections 8 to 11 of the Family Law (Scotland) Act 1985. It is worth noting that that Act followed closely a draft Bill that was recommended by the Scottish Law Commission in a report delivered to the noble and learned Lord, Lord Mackay—as, I think, the Lord Advocate—in November 1981. It was the product of many years’ research and it had taken a long time to be brought forward. However, there it was in 1981 and eventually that Bill was brought before this Parliament and enacted almost without amendment from the recommendations made there. The aim of the Scottish Law Commission was to do exactly as the noble Lord, Lord McNally, said: to replace judicial discretion with clear indications and principles laid down by Parliament, which the judges would be required to follow. It put forward a system that was based on what were described as fair and clearly stated principles but which left enough scope for judicial discretion to allow for different circumstances in different cases.

That Bill attracted little criticism when it was debated here but I remember, when I was sitting as Lord President in the Court of Session, being rather suspicious of it because at first sight it seemed to cut back the element of discretion for the judges too far. In fact, when one looked at the way in which it was working, it appeared that that was not really so and that there was enough discretion to allow for different cases, as the Law Commission had predicted. What I sought to do in the Appeal Court in which I sat was to discourage appeals that interfered with the exercising of discretion by the judges. The old system was fine when a very few judges in Edinburgh were dealing with divorce cases, but this measure coincided with the broadening of the jurisdiction to sheriffs sitting throughout the country. The risk of different views being taken by judges was very real, but it was an important change and, in the end, I greatly welcomed it when I was sitting as a judge.

However, there are two problems in this Bill and perhaps I might focus on them quickly. The first is the one that I mentioned regarding the case of Miller, which was drawn to the attention of the court in Edinburgh as that Act became law and was worked out in practice. It is the definition of matrimonial property and tying its net value to the date when the parties separate. The problem was that sometimes a great deal of time elapsed between the separation and the making of the award and to freeze the value at the date of the separation was in many cases seen to be unfair. That was cured by an amendment in the Family Law (Scotland) Act 2006 and I respectfully suggest to the noble Baroness that her Bill might be amended to take account of that amendment, replacing her formulation by directing attention to the date of the award.

The second point that troubled me greatly in Miller was the situation of a high-earning wife who gives up a career to look after the children, and indeed her husband, in the course of a marriage. I had before me at the time when I was dealing with Miller a letter from a lady in exactly that situation who lived in the south of England and was being taken to divorce in Scotland by her husband, in what I thought was a blatant piece of forum shopping, so that he could take advantage of the three-year “clean break” principle. Her position was that she could never return to the high-earning position that she had held before she married—that simply was not realistic—so she was being required, as the Scottish Law Commission put it, to adjust to a lower standard of living.

That seemed very unfair to me and I wondered whether the law could not be adjusted to give a little more discretion to judges to allow for such cases where high-earning women were being deprived of their ability to continue earning because of what they had done for the family and for the husband. I suggested that the law may have made sense in 1981 but, now that there was so much more equality and the opportunities for women to earn higher earnings was so much greater nowadays, it needed to be rethought. I was quite severely attacked by academics in Scotland for making that suggestion because it looked as though I was criticising the Scottish Law Commission. I was not trying to do that; I was just saying, “Let’s bring the matter up to date”. I suggest that the noble Baroness might like to consider that point, too.

I have one other point to make on the matter of post-nuptial and prenuptial agreements. The problem that the Supreme Court had in Radmacher v Granatino was twofold. First, there was a policy objection, which was based on the view that these agreements, particularly the prenuptial ones, in some way encouraged parties to breach the duty to live together that was the essence of marriage. We in the Supreme Court were able to say that that policy should be now discarded and I think that it no longer plays a part in modern thinking, but what we could not do was alter the primacy that the statutory law gave to the court in deciding whether these agreements should be enforced. It was important then, and it is important now when one reads the noble Baroness’s Bill, to substitute that with the primacy of the agreement of the parties, which takes one back to the situation that I, in common with the noble and learned Lord, Lord Mackay of Clashfern, would have seen the position to be in Scotland and indeed many other countries. That would substitute the agreement of the parties for the position of the court and in my submission that seems to fit well with the thinking in many places around the world. It would do something that the court could not do, which of course is the great benefit of legislation, as I think the noble Lord, Lord McNally, was suggesting. There is quite a lot to debate in this Bill when it comes to Committee and I very much hope that it has a Second Reading and will then proceed to that stage.