Divorce (Financial Provision) Bill [HL]

Baroness Vere of Norbiton Excerpts

2nd reading (Hansard): House of Lords
Friday 11th May 2018 Lords Chamber

[Baroness Vere of Norbiton (Con)]

My Lords, I congratulate the noble Baroness, Lady Deech, on securing the Second Reading of her Bill. Indeed, I thank her for all the work she has done, and no doubt will continue to do, in this vital area. Although currently much maligned, it is a strength of your Lordships’ House that noble Lords such as the noble Baroness, Lady Deech, with a passion for and deep understanding of an issue, can work tirelessly with Governments of all persuasions to encourage reform. It has been my pleasure to listen to your Lordships today. I thank all noble Lords for the insight they have brought to the debate. I will encourage my colleagues in the MoJ to study them carefully.

The resolution of financial matters is one of the many challenges of divorce or civil partnership dissolution. Although there are differences of opinion within your Lordships’ House and beyond, it seems that there is an agreed and twofold objective: that the process should be as supportive and clear as possible, and that the outcome for both parties and any children involved should be fair.

From the debate it is very clear that there is consensus among your Lordships that reform of the law governing divorce finances is overdue, but it is also the case that consensus on the type of reform is not universal. The President of the Family Division, Sir James Munby, who, as the noble Baroness, Lady Deech, noted, favours reform, also recently observed that,

“views on what form such reform should take are sharply divided”.

It seems that this divide comes from the differences of opinion about how we should balance the law. We can all agree that the current legal framework gives the court wide-ranging flexibility in making financial orders and that judges skilfully exercise that flexibility and discretion every day. For those who see the virtue of the existing law, that flexibility allows for fairness. For those who see a problem with the law as it is, that same flexibility makes for uncertainty. For example, the noble and learned Baroness, Lady Hale, the President of the Supreme Court, has suggested that, sometimes, open-ended periodic payments are the only way to,

“give each party an equal start on the road to independent living”.

It is clear to me that the breadth of views, including from those at the very top of the legal profession, warrants careful consideration by the Government.

Rebalancing a law such as this—if we are satisfied that it needs rebalancing—cannot be an easy undertaking. The law—one law—must allow the court to deal equitably with the widest range of cases, from shorter marriages of young people, both with successful careers and great prospects, to longer marriages of older people where it was jointly decided that one of them should give up a career to build a home and raise children. Here I must note that, although there might be a perception that the law is out of step with how men and women live their lives today, the law is gender-neutral. Equality of spouses is in statute, so how does it get put into practice? One might conclude—indeed, some have alluded to this—that it is not the law that needs to change but the attitudes of some of those who apply it.

It is clear that the law must retain a measure of flexibility. The question before your Lordships’ House is how much flexibility is needed to allow the court to make orders that are fair to both parties in a very wide range of cases and circumstances. This must be balanced with the need to provide greater certainty about financial outcomes to inform and manage the expectations of the separating couple. The Government want to encourage couples to agree financial arrangements themselves where it is appropriate and safe for them to do so.

In 2014, the Law Commission noted criticism that the law on financial needs was not always consistently applied, but it concluded that the law on this did not need statutory reform. Instead, it recommended that the Family Justice Council prepare guidance on the meaning of “financial means”. The Government listened and took action. With government funding, the Family Justice Council produced detailed guidance for the judiciary and legal practitioners. The noble Baroness, Lady Deech, commented on the guidance’s complexity, but it is for those with the skills and experience to deal with complexity, not for the divorcing couple. It was only relatively recently that this work was completed—indeed, within the last few years. It is only right that we give it time to bed in. If, in due course, it is decided that it is not fulfilling its purpose, perhaps it will need to be reviewed.

There is good guidance for the divorcing couple—a topic mentioned by the noble Baroness, Lady Falkner. The Government produced an excellent guide for divorcing couples to help them agree their finances. The guide, Sorting Out Your Finances When You Get Divorced, is accessibly written, is just 50-odd pages long, is well presented and has been available since September 2015. It explains the options available and how the court makes decisions, so that divorcing couples can have a realistic perspective on their separate financial futures.

[Baroness Shackleton of Belgravia]

I need to repeat the difficulties presented by that document when the judges applying it do not agree. When you are advising somebody and want somebody to mediate an agreement, or when you are faced with a client who comes into your office and says, “What should I settle at?”—it does not matter if you are dealing with a pro bono person or somebody who can afford many times most people’s annual income—if the adviser cannot predict the outcome because judges apply the same rules differently, we are in big trouble and a settlement cannot be agreed. Therefore, there is a delay; therefore, there is uncertainty; therefore, people get upset and, therefore, children become involved or get disaffected. Most people can deal with things when they know what it is; they cannot deal with uncertainty and delay. The cost of finding out the solution from the document that has been produced is not working.

[Baroness Vere of Norbiton]

I thank the noble Baroness for her insights on that. To a certain extent, the Government agree. It is why we have been working with the Family Justice Council and are continuing to look at this area. We want to make sure that everything is in alignment. Everything has eventually to be in alignment, whether that be the decisions of the judges or the expectations of those going in front of them and seeking a fair divorce.

Returning to the guide, I wish I had seen it when I went through my—thankfully—only moderately costly divorce. Reaching a financial agreement is very stressful, as I think all divorcing couples can attest. The further away from judges that agreements between the individuals can be reached, the better it is.

I return to flexibility and certainty, as mentioned by the noble and learned Lord, Lord Brown, my noble friend Lady Bottomley and the noble Lord, Lord St John of Bletso. In any reform of the law to balance flexibility and certainty, the Government need to be sure that a proposal would achieve what it sets out to do and would not cause unintended difficulties. Given the complexity involved in disentangling the finances of a shared life and the impact of any changes at a personal level, the Government are keen to see a solid evidence base for reform. We are very open to reviewing any and all evidence from the noble Baroness, Lady Deech, or any noble Lords. Put simply, we all want to get this right.

I acknowledge that noble Lords have pointed to the model of Scots law. I am grateful to the noble and learned Lord, Lord Davidson of Glen Clova, for his comments on its operation and some of its consequences. The noble Baroness, Lady Deech, has drawn attention to research by Professor Jane Mair and others on how the Family Law (Scotland) Act 1985 has worked in practice. A proposal to amend English law in line with Scots law may well appear attractive. I am conscious, however, that there are dissenting voices among the judiciary, family law practitioners and beyond—and, perhaps as significantly, in another place. If the Government conclude that the law in England and Wales needs reform, whether of the duration of periodical payments or of the matters that a court must consider, we must take account of the provisions as a whole and the effects of any changes.

The so-called “big money” divorces mentioned by many noble Lords make for eye-catching tabloid headlines, and I appreciate that several of your Lordships think that awards have been overgenerous. One might also conclude that the fact that such cases come to our country and to the English courts demonstrates perhaps our laws in this jurisdiction are fair, and that the impartiality of our judiciary is highly regarded. But such cases are small in number and a world away from the circumstances faced by the vast majority of divorcing couples.

The question for government is where any reforms would leave more typical cases, perhaps those involving people of an age at which it would be difficult to return to their former career, be that a man or a woman. Couples who have no intention of divorcing make decisions in the expectation of a long-term partnership. These decisions then have serious repercussions on one or more of the parties when, against their initial expectations, their marriage breaks down. With all this in mind, I now turn briefly to the detail of the Bill.

Clause 2 defines matrimonial property—in broad terms, this is property acquired during the marriage but not, for example, from an inheritance—and seeks to exclude property acquired before the marriage from consideration as an asset when financial orders are made. The Government’s concern remains that this could cause hardship if someone’s financial needs could be met only if assets that the other spouse had acquired before the marriage were included.

Clause 3 seeks to make nuptial agreements enforceable on condition of certain safeguards. The Government are considering a similar recommendation, made by the Law Commission, which has additional safeguards. I note the comments of the right reverend Prelate the Bishop of Chester, suggesting a test of reasonableness or fairness when making an agreement, and the need for independent advice, noted by the noble Lord, Lord St John of Bletso. We are considering introducing nuptial agreements and we will make our position known on this recommendation in due course. If the Government decide to go ahead, we will of course give consideration to the guidance needed for couples, as mentioned by the noble Baroness, Lady Falkner.

Clause 4 sets out a presumptive 50:50 split of property. People do not, of course, always leave a marriage equally. One partner often has better employment prospects. One partner is often expected to shoulder most of the caring responsibilities. The existing law allows for redistribution of assets to make up for this. The Government remain concerned that changing the law in the way proposed could have an adverse effect on the financially weaker party and their transition to full financial independence.

Clause 5 seeks, in part, to limit the duration of periodical payments to five years,

“unless the court is satisfied that there is no other means of making provision for a party to the marriage and that that party would otherwise be likely to suffer serious financial hardship as a result”.

I appreciate that periodical payments often draw headlines, being called “a meal-ticket for life” in divorce cases that involve the more affluent. However, it is worth noting that most people do not, in fact, apply for periodical payments when they divorce. It is important that one type of divorce should not cloud the debate around what happens to those of more limited financial means. We have, it is important to say, common ground in wanting to support people to move to financial independence. The Government are not persuaded, for the time being, that the existing law does not support this objective. However, as I said previously, we are happy to review any evidence that comes to light.

On Clause 6, the Government continue to believe that the existing provision on taking a party’s conduct into account remains adequate.

I have outlined the Government’s reservations about the Bill, but I want to focus on where we agree. While the Government’s position on the accessibility of the law and the clarity that it offers divorcing couples may differ from the position of the noble Baroness, Lady Deech, we all want the law to support couples and encourage a fair outcome. I am conscious, too, that other individuals and groups have also shown an interest in divorce finances, and the Government will wish to take a range of views, and solid evidence, into consideration if we conclude that reform is necessary. My honourable friend Dr Phillip Lee recently said in another place that he is hopeful that the Government can work across the House and beyond as we continue efforts to improve the family justice system. This remains true. It would not be helpful to approach consideration of reform in any partisan way.

I am aware that I have spoken at length and may not have covered as many points as I would have liked, but I really wanted to set out the Government’s position. If I am able to add more colour, I will write to all noble Lords who have spoken today. I acknowledge the mood on all sides of this House and the strength of support for the Bill. I assure your Lordships that the Government will reflect on all that has been said today.