Lord Marks of Henley-on-Thames
Main Page: Lord Marks of Henley-on-Thames (Liberal Democrat - Life peer)Cohabitation Rights Bill [HL]
Lord Marks of Henley-on-Thames Excerpts
Lord Marks of Henley-on-Thames (LD)
My Lords, more and more people now choose to live together before or instead of getting married or entering into a civil partnership. In 1996, there were fewer than 3 million people cohabiting in the United Kingdom. By 2013, the figure had almost doubled to 5.9 million. More cohabiting couples—about 38% of them—are having children. The trends are clear: people are choosing to live together and often to build families together as an alternative to getting married or entering into civil partnerships. That is a clear life choice that they make, and it is mark of a free society that we accept and indeed embrace our freedom to choose how we live and with whom we live. This Bill is designed to right injustices that have long bedevilled our law and to ensure that people who live together will not be subjected to an unfair and invidious disadvantage by so doing.
There persists widespread confusion among the public about the legal status of cohabitants. In a British Social Attitudes survey in 2006, no less than 58% of respondents thought that cohabiting couples who split up were probably or definitely in the same position as married couples. The myth of the so-called common-law marriage is widespread—but, as your Lordships are well aware, it is just that: a myth, without any foundation in law. In 2008, a further British Social Attitudes survey found that nine out of 10 people believed that cohabitants in a long-term relationship involving children, or where career sacrifice was involved, ought to have redress on the breakdown of their relationship. Yet, at present, unless they have entered into a cohabitation agreement, the protections for couples who part are extremely limited. As to the property they live in, if it is in the name of one partner, the other may secure an interest only if he or she can bring a case based on the antiquated and unwieldy law of trusts by showing that joint ownership was their joint intention. The ascertainment of the parties’ shares remains difficult, even where the property is in fact in joint names. The last major decision on the issue of intention, that of the Supreme Court in 2011 in Jones v Kernott, has made the position no easier.
Minor children are entitled to support under the Child Support Act, and the children of wealthier parents under Schedule 1 to the Children Act 1989. However, support ends when the children are older. At that stage, the caring parent may be left completely unsupported and often out of a home. Cohabitants may also secure some provision on death under the Inheritance (Provision for Family and Dependants) Act 1975, which I shall refer to as the 1975 Act. That was a welcome reform made in 1995, but the provision for cohabitants is limited to maintenance and it is necessary for the surviving party to go to court to establish a claim.
However, on separation, there are no legal rights at all for the woman who has given up her career to look after her partner’s children—or their joint children—once they are older and independent. There are no rights for the woman who gives up working to keep house for her family and then does so for many years before the relationship breaks down. There is no redress for the man who has worked for years and used up his savings to help establish his partner’s business and is then left with nothing when they break up. Then again, if one partner dies without leaving a will, the other will inherit nothing as of right from the estate—not even the home they lived in together.
The Law Commission’s proposals on separation were made, after a long and detailed consultation, in 2007, and those on intestacy in 2011. They were thorough and carefully considered. As your Lordships well know, the Law Commission was set up by Parliament to recommend necessary law reforms to government. It is an entirely independent body with a stated mission: to keep the law fair, simple and modern. Despite repeated pleas from the professions and from the judiciary at all levels to implement the commission’s proposals in this area, no action has been taken.
The Bill is limited to implementing the Law Commission’s proposals made in its two reports. I make no claim to originality in presenting these proposals. My noble friend Lord Lester of Herne Hill introduced a similar Cohabitation Bill in 2008. I pay tribute to him for his vast achievements in the area of law reform, and I am delighted that he is here and able to speak in the debate today. My noble friend’s Bill went rather further than this one, because it included provision for continuing maintenance, which the Law Commission’s proposals and this Bill do not. My noble friend also introduced a Bill incorporating the Law Commission’s proposals on intestacy in 2012.
I turn first to the proposals for relief on separation. I make it clear at the outset that the Bill’s proposals do not equate cohabitation with marriage—far from it. For many would-be reformers, the Bill is for that reason a disappointment because it proposes perpetuating what they would call a two-tier system of financial provision, with one regime for those who marry or enter a civil partnership and another for those who do not. I do not share their view. I firmly believe that when two people commit to marriage or civil partnership, they commit to full financial interdependence—a commitment which demands that there be a comprehensive range of remedies in the event of divorce. However, when people decide to live together without taking on the obligations of marriage or civil partnership, that is their choice, and they should not have those obligations thrust on them by the state.
That does not mean that where a cohabiting relationship breaks down, there should not be a mechanism to adjust the economic impact of the relationship so as to share it more fairly between the parties. Essentially, and simplifying them to the core, the Bill’s proposals aim to address economic unfairness at the end of a relationship that has enriched one party and impoverished the other in a way that demands redress.
Scotland has a cohabitation law, and has had one similar to that proposed in the Bill since 2006. Ireland introduced similar legislation in 2010. The noble and learned Baroness, Lady Hale, our one woman Supreme Court judge—how regrettable it is that she is still the only one—said in July 2012, in a significant case under the Scottish Act in the Supreme Court called Gow v Grant:
“The main lesson from this case, as also from the research so far, is that a remedy such as this is both practicable and fair. It does not impose upon unmarried couples the responsibilities of marriage but redresses the gains and losses flowing from their relationship”.
The noble and learned Baroness concluded:
“The Act has undoubtedly achieved a lot for Scottish cohabitants and their children. English and Welsh cohabitants and their children deserve no less”.
It is not just Scotland that has similar legislation. Australia, Canada, New Zealand and many other jurisdictions have strong arrangements by statute for cohabitants who separate.
Perhaps I may describe in broad terms some of the more important provisions of the Bill. By Clause 2, cohabitants are defined as a couple who either have children and live together or who have lived together as a couple for two years. By Clause 6, the parties can by agreement opt out of the financial settlement provisions of the Bill, provided that requirements for independent legal advice and other safeguards are met. By Clause 14, there would be power in the court to vary or revoke unfair opt-out agreements. Other cohabitation agreements or deeds of trust would also be honoured. So this scheme would not be compulsory; the parties could choose to make alternative arrangements. By Clause 7(3), there would be a two-year time limit for bringing a claim following separation so that such a claim would not hang over the heads of the parties indefinitely.
Clauses 8 and 9, and Schedule 1, set out the scheme of the financial settlement proposals. The starting point is for the applicant to show “qualifying contributions” to the parties’ shared lives. These could be financial or they could be in work, in care or in kind. If, as a result of such contributions, the other party had derived and retained a benefit, or the applicant had suffered or would in the future suffer “an economic disadvantage”, the court would be empowered to intervene to award a financial settlement. Such an award would first reverse any retained benefit, in full or in part. If after that exercise, the applicant would still be left with an economic disadvantage, the court could order that disadvantage to be shared between the parties. The court would be required to consider discretionary factors, the welfare of any minor children of the parties being the first consideration.
The financial position of each party would of course be crucial. Conduct which it would be inequitable to disregard would be taken into account and the circumstances in which contributions were made would be important, especially where they were discouraged rather than sought by the other party. The orders that could be made would include capital orders for lump sums, property or pension-sharing but not continuing maintenance. The lump sums could be payable by instalments. It may be argued that this would encourage litigation between former cohabitants but I would expect most cases to be settled by agreement, without coming anywhere near a court. Furthermore, mediation will play a large part in resolving such cases.
I turn to the proposals on the death of a cohabitant. I will deal just with the most important provisions. Clauses 16 and 17 would enable cohabitants to insure each others’ lives and write policies for the other partner’s benefit so as to fall out of the deceased’s estate for inheritance tax purposes. Clause 19 would enable the survivor of a cohabiting couple to inherit an interest in the estate of a partner who died on an intestacy. This is an important provision. The Law Commission’s research has shown that only 17% of people who are cohabiting make a will. The other 83% are vulnerable to death and intestacy. Of course if that provision is not required by a cohabiting couple, they are free to make their own wills, just like everyone else.
In relation to the home in which parties live, research has shown that most cohabiting couples would hope and expect that their partners, surviving in the house that they shared together, would be the people to whom the house would pass on their death. Clause 20 would thus ensure that a surviving cohabitant could make a claim to the parties’ joint home. By Clauses 21 and 22, and part of Schedule 2, cohabitants’ claims under the 1975 Act would no longer be limited to claims for maintenance, as they currently are under the 1995 amendment.
The previous Administration were sympathetic to the aims of the Law Commission’s 2007 report but wanted to consider how the new law was working in Scotland. As the noble and learned Baroness, Lady Hale, made clear in Gow v Grant, it is now absolutely apparent that the law in Scotland is working well. When I asked the present Government about this in 2011, they issued a Written Statement saying that they would do nothing during the term of this Parliament. However, this Parliament is nearing its end, while the need for reform in this area becomes ever stronger.
It has been a long time since the Law Commission’s two reports, particularly the 2007 report on relationship breakdown, but the trends have not changed and the injustice has not decreased. Although the noble Baroness, Lady Deech, has been a formidable campaigner against these proposals, particularly when my noble friend’s Bills have been debated—I am delighted to see that she is here to make her case again today—there is a powerful body of both professional and lay opinion in favour of these reforms: most of the family judiciary; Resolution, the body that represents family solicitors and for whose strong support I am particularly grateful; the Family Law Bar; and many others, including many in the church. I am delighted to see the right reverend Prelate the Bishop of Sheffield here today to speak in this debate. I suggest that legislation is now overdue, and this Bill attempts to redress the position. I beg to move.
Lord Marks of Henley-on-Thames
My Lords, I thank all noble Lords who have spoken in this interesting and serious debate, which, as the Minister said, has been conducted with great courtesy. However, I would like to respond to a number of points, particularly those made by the noble Baroness, Lady Deech, and the noble Lord, Lord Farmer, who opposed the Bill, and, to a lesser extent, to those made by the right reverend Prelate the Bishop of Sheffield, who, if I may gently chide him, recognised the injustices that were caused by the existing law on cohabitation but, frankly, opposed the measures in the Bill designed to right them.
My central position is that it is simply no answer to the injustice inherent in our arrangements at present—they were rightly described by the Minister as a patchwork, and I think he implied that they were unsatisfactory—to say that cohabiting couples could just get married. My noble friend Lord Wallace is indicating that I should speed up, so I will.
Along with almost all noble Lords who have spoken, I believe that we should support marriage. I have been a great supporter of marriage and have been married for many years, although not as long as some noble Lords who have spoken. I agree with and accept the point that this is a very public and important long-term commitment, and am in awe of all those who make it. However, we cannot deny the point that many couples simply choose not to get married, and their numbers are increasing. I say to the noble Lord, Lord Farmer, that we are not going to turn the clock back simply by refusing to help to relieve the injustice that cohabiting couples suffer—many of them unknowingly, as has been pointed out—under the present system. We are not going to persuade cohabiting couples to marry by denying relief on breakdown. While I fully support marriage, I start from the position that people should be free to make the choice to cohabit if they wish, and that if they make that choice they should at least be offered some protection by the law against unfairness.
The other point that I suggest was extremely well made by the noble and learned Baroness, Lady Butler-Sloss, was that it is not a case of couples choosing to marry; in many cases one partner, in love and wishing to continue the relationship, wants to get married but the other is not willing to do so. I am very grateful for the distinguished support of the noble and learned Baroness, who has more experience in this field than probably anyone else around. The position of the noble Baroness, Lady Deech, would be to tell the partner who wished to marry that she or he must leave the relationship or accept the imbalance—or, as the noble Baroness, Lady Thornton, put it succinctly, accept that the other partner can simply say: “That’s tough”. I suggest that it is entirely wrong to perpetuate a system that has as its default position the notion that the unwilling partner may take advantage of the other and, while doing so, take advantage of any children that they have together.
The further point is that the Bill does not force anyone into the Bill’s scheme for redress on separation, nor does it require inheritance to pass to the surviving partner on death. The Bill provides for a default position that would apply where couples had chosen not to make alternative arrangements. That default position is nothing like the arrangements that follow from marriage. There is no continuing obligation of maintenance, as there is on divorce. There is no division of property, as there is on divorce; so the £5 million demand by the undeserving cohabitant mentioned by the noble Baroness, Lady Deech, is simply a figment of her imagination, or at least a forensic exaggeration. The opt-out provisions in the Bill are sensible. They give couples the power to take their future into their own hands, after consideration. No doubt most who opt out would do so with the additional help and certainty of a cohabitation agreement. The requirement for legal advice in connection with opt-outs is there as a safeguard. Yes, it would cost some money, but that is to be balanced against the protection, security and avoidance of future battles that such money would buy. The overwhelming points are that there are many cases where the present lack of protection gives rise to real injustice when a relationship ends with one party in a weakened position and the other having taken substantial benefits.
The noble and learned Baroness, Lady Butler-Sloss, mentioned the period of two years which I have chosen. The Law Commission suggested a period of between two and five years and suggested that if a longer period were chosen, couples would be able to get dispensation from the court so that the minimum duration requirement in an appropriate case would go down to the two-year position. I accept that that is a perfectly workable alternative. I chose two years because two years is the average length of a cohabitation that breaks down.
The unfairness is exaggerated, as has been pointed out, by the prevailing myth that cohabitants in a long relationship are protected, when that is simply not the case. The position is even worse where children are involved, and it gets worse every year. I am very grateful to my noble friend Lord Lester for pointing out what was said in Gow v Grant about Professor Elizabeth Cooke’s views on this point. Professor Cooke has been a leading proponent of family law reform within the Law Commission and her views are worthy of respect. However, children are the innocent victims of these breakdowns. The central question is therefore where you draw the line between the need to protect and what the noble Baroness, Lady Deech, calls unwarranted interference by the state. This Bill draws the line by giving limited protection against injustice to long-term cohabitants and those with children as a default position while permitting parties of full capacity to opt out of the scheme if they wish.
As for provision on death, there is no need for anyone to die intestate. The remedy if couples do not want a surviving partner to inherit is to make a will. No one should forget the point, which has been made, that in the absence of provision, former cohabitants and their children tend to be forced to turn to the state for support on separation or bereavement. The noble Lord, Lord Farmer, pointed that out as a reason against supporting the Bill. I regard the opposite as the reality: the expense for the state is to be avoided. It is not only the expense for the state that is to be avoided by the provisions in the Bill, it is also the unwelcome dependence of abandoned parties on benefits, which has the effect of draining their confidence, draining hope and having a seriously damaging effect on their children. It is not compassionate to force people into state dependency and a complete lack of freedom in the name of a spurious freedom to cohabit without responsibility. This Bill places obligations on parties who part and have benefited from a relationship to offer some redress in respect of the benefit that they have gained.
I am very grateful for the support from the noble Baroness, Lady Thornton, on behalf of the opposition Benches. Unlike my noble friend Lord Lester, I do not see this so much as a party-political opportunity. I believe that there are many in the Conservative Party who support the provisions that I am proposing and that the Law Commission has proposed. Although the Minister was not enthusiastic about the Bill and thinks that a great deal of further work needs to be done, I did not sense an innate opposition to these proposals.
As it happens, I totally disagree that a great deal of further work needs to be done. I accept the position, although it was a cautious one, put by the noble and learned Baroness, Lady Scotland, when answering a Question on this matter in the previous Parliament: that the then Labour Government wished to wait until the experience in Scotland made the day a little clearer. The position now is that the Scottish legislation has worked and is working, and it has been applauded by the Supreme Court of the United Kingdom.
The Law Commission’s reports were thorough and well researched, and the position has not changed. The demand as well as the need for the Bill has increased, not reduced. I expect the Labour Party to support the Bill in accordance with what was said by the previous Government, and I am very grateful to the noble Baroness, Lady Thornton, for making that clear. I believe that, on consideration, if they form part of the next Government, Conservatives might also accept that position.
The Bill is about responsibility. It involves recognising that when people live together they take on a responsibility to consider each other, not to take advantage of each other, and at least to consider their positions in the event that things go wrong by separation or death. The Bill enables the law to recognise that responsibility and give some meaning to it. However, it is also about compassion. The Law Commission has recognised that millions of couples are in cohabiting relationships and need protection under the law. It is about compassion for those who do not form cohabitation agreements or write a will. The Law Commission rejects the harsh view that if those people do not marry, they must take the consequences of staying outside marriage. The Bill recognises the realities of our society and tries to address them in a balanced and compassionate way. I ask the House to give the Bill a Second Reading.