Divorce (Financial Provision) Bill [HL]

Lord Walker of Gestingthorpe Excerpts

Friday 21st November 2014 Lords Chamber

[Baroness Deech]

My Lords, I rise to move Amendment 5. Consequent on it is whether Clause 2 stands part of the Bill. This provision, as amended, is rather more technical, but also flexible. It brings together the definitions of the relevant financial order—the sort of things that the court may deal with—and defines and spells out what was implicit in the original draft, the various types of order that the court may make. After some discussion, lump sum orders are included, as they may assist flexibility in dividing up the total assets. This will assist the court in achieving maximum flexibility. My aim throughout is to promote sufficient clarity to enable people to arbitrate and mediate and yet preserve a little bit of discretion, which is a good hallmark of our law. I beg to move.

[Lord Walker of Gestingthorpe]

My Lords, this amendment, as the noble Baroness said, introduces a definition of a new expression, “relevant financial order”. The most significant feature of the new definition is that it does not include an order for periodical payments, but to leave it there would perhaps be a rather meagre explanation. In the long run, it might be helpful to considering some later amendments if I speak very briefly about the terminology and structure of the Matrimonial Causes Act 1973.

Many of your Lordships will recall that the concept of no-fault divorce was introduced in England and Wales by the Divorce Reform Act 1969. Scotland followed suit in 1976. The 1969 Act did not contain any provisions altering what was then, in the old-fashioned phrase, called ancillary relief. New provisions were brought in by the Matrimonial Proceedings and Property Act 1970, which for the first time gave the court power to direct the transfer of specific assets, rather than dealing simply with sums of money. The 1969 and 1970 Acts were consolidated in the Matrimonial Causes Act 1973. My noble friend Lady Deech, with great respect, is not quite right in saying that the Matrimonial Causes Act 1973 has not since been revisited by Parliament. On the contrary, it has been amended at least 12 times. I may have got that number wrong, but it is a very much amended Act. However, the noble Baroness is quite right in saying that what Parliament has not revisited is the essential provision in Section 25(2), the guidance as to how judges are to exercise their very wide discretion. As the supporters of the Bill say, that is the provision that cries out for a simpler and more workable test.

The 1973 Act, unusually for a consolidating Act, introduced two entirely new definitions: first, a financial provision order, which was either an order for periodical payments or an order for a lump sum; and secondly, a property adjustment order, which reflected the introduction by the 1970 Act of a power to direct the transfer of particular identifiable assets. The difference between those two forms of order is essentially that between orders for a sum of money and orders relating to identifiable assets. The powers of the court were extended further in 1999 by the introduction of pension sharing orders, and in 2008 by pension compensation sharing orders following the introduction of the pensions compensation Act. That is the range of powers open to the court at present. The new definition of “relevant financial order” includes all the types of order—that is, property adjustment orders, pension orders and lump sum orders, but not orders for periodical payments. The shape of the Bill as we seek to remould it reflects that. Clauses 2 and 4 are concerned primarily with the scope of “relevant financial orders”, as they now would be defined. Clause 5 would be concerned with periodical payments orders, which are treated and stand on their own and to which the Bill adopts the attitude of discouraging them as a long-term measure except when they are essential.

The Bill seeks to amend what is by now a very complex situation. I hope that this definition adds a little clarity to that. Perhaps I may add that if the Bill does go through, it certainly would be high time for there to be a further consolidating Act to replace the much amended 1973 Act.

--- Later in debate ---

[Lord Grantchester (Lab)]

My Lords, I thank the noble Baroness, Lady Deech, for her great efforts to allow the courts to bring certainty to this situation. As regards her last comment, I hasten to add that I do not think people enter marriage with the idea that they are going to get a divorce. Similarly, I do not believe that anybody turns up to work with the intention of fouling up, but these things happen. I support the amendment as it would bring certainty and enable couples facing divorce to be given clear advice on what their future situation will be and how the matrimonial assets will be divided. The starting point for this process should be that of defining what the matrimonial assets are.

[Lord Walker of Gestingthorpe]

My Lords, I will speak to Amendments 6 and 15A. As the noble Baroness, Lady Deech, said, Amendment 6 is one of the main pillars of the Bill. The revised proposed new clause embodied in Amendment 6 lays down the general principle that matrimonial property is to be divided equally in normal circumstances. That is the easy bit. The more difficult bit is defining with reasonable precision what matrimonial property is. The revised proposed new clause largely reproduces—we hope in a clearer form—what was in the Bill as introduced, although there are one or two significant alterations to which I shall draw attention. I recognise, of course, that in this context clarity is a pretty relative concept and that the proposed new clause is not particularly easy going.

One way of viewing the proposed new clause is as laying down three general principles in proposed new subsection (1), followed by four qualifications or refinements in the four paragraphs of proposed new subsection (2). The first general principle is that property acquired before marriage should not be regarded as matrimonial property but as—to use a clumsy but unavoidable term—non-matrimonial property. The second general principle is that gifts received from third parties or inheritances or intestate succession to the estates of third parties are also to be treated as non-matrimonial property, even if the gift is made, or the death occurs, during the marriage. I should treat the third general principle at some length because it differs from both the Bill as introduced and from the Scottish legislation embodied in the Family Law (Scotland) Act 1985, from which these provisions are fairly obviously derived.

I mention in passing that I very much regret that my noble and learned friend Lord Hope of Craighead cannot be here today because he, as former Lord President in Scotland, has unparalleled experience of the practical working of Scottish legislation. I have had the advantage of some discussion with him but I take responsibility for what I say about the law of Scotland, which will be far less learned than if it came from him.