Divorce

Lord Bach Excerpts

Monday 18th October 2010 Lords Chamber

[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.