Inheritance (Cohabitants) Bill [HL]

Lord McNally Excerpts

Friday 19th October 2012 Lords Chamber

[The Minister of State, Ministry of Justice (Lord McNally)]

My Lords, I am grateful to the noble Baroness, Lady Thornton, for that response indicating the attitude of the official Opposition to the Bill. I do not follow her entirely on the subject of the contribution of the noble Baroness, Lady Deech—or, indeed, any of the contributions. This has been a robust but courteous debate. Indeed, it brought to mind when the Communist Party of the Soviet Union had its secret conclaves: it always used to issue a statement saying that a meeting had taken place and, “a full and frank discussion had been conducted in a comradely atmosphere”. I felt that that was exactly what we did today. It was a good example of the House dealing with a subject where there are strong feelings and passions on both sides but both sides, while putting their views robustly, also listen courteously. That was helpful to the Government in addressing this and helpful in promoting the broader debate that we would like to see on this issue. Of course, it also helps, as the noble Baroness, Lady Thornton, said, if the fact of this debate gets home to people two sensible pieces of advice: first, make a will; and, secondly, common law protections do not exist.

The noble Baroness, Lady O’Cathain, said that it was only recently that she became aware that the urban myth of the protection of common law marriages was non-existent and I came to that knowledge similarly late in life. I grew up with the understanding that there was such a thing as common law marriage with in-built protections. The introduction of the Bill is extremely important, timely and useful in a process that is under way. We got the right mix between the lawyers and those to whom the noble Baroness, Lady Kennedy, referred as “untainted by law”.

The tenor of the discussion has been about protections for cohabitants, protections for the institution of marriage and a desire to get clarity and understanding in a way that, as the noble Lord, Lord Browne, said, does not add to the complexities of the legal system. My position, almost instinctively, is to want to support proposals by the Law Commission. I am a greater support of its work, and of the new fast-track approach in this House to Law Commission reports. I am equally deferential to any ideas put forward by my noble friend Lord Lester. His track record is such, as the noble Baroness, Lady Kennedy, pointed out, that if he makes a proposal, one should take into account the firm consideration, good research and fierce commitment behind it.

I should, however, make it clear that the Government have concerns about the Bill, and explain why. It is interesting that we had 10 speakers and, if a Division had been called, we would have had a dead heat: there were five speakers on either side. That gives a sense of why the Government are a little cautious, as well the fact that a number of speakers said that perhaps this subject should be part of a more comprehensive and considered approach to these issues.

The Bill addresses two questions. First, what should a cohabitant be entitled to inherit on the death, intestate, of his or her partner? Secondly, when should such a cohabitant be entitled to bring a claim against the estate of his or her deceased partner for financial provision under the Inheritance (Provision for Family and Dependents) Act 1975? Under the law, there may be provisions made for a cohabitant under a will, but there is no provision for cohabitants under the intestacy rule. In many cases, the allocation of property under the will or the intestacy rules will be the end of the matter but, in some circumstances, the surviving cohabitant may be able to make an application to the court for reasonable financial provision under the Inheritance (Provision for Family and Dependents) Act 1975. If this application for family provision, as it is generally known, is successful, the resulting court order overrides the terms of a valid will, if there is one, and similarly overrides the intestacy rules where they apply.

My noble friend’s Inheritance (Cohabitants) Bill would equate the position of some habitants with that of spouse and civil partners under the intestacy rules and improve their position under the 1975 Act. Certain cohabitants would therefore be promoted above blood relations on intestacy. These proposals follow the recommendation of the Law Commission in its 2011 report. The Law Commission explained that it has taken the unusual step of including two Bills in its report, because reform of the intestacy rule in favour of cohabitants is rather different from the rest of the recommendations in that report, which relate to the law of intestacy and family provisions more generally.

The commission said that what is now the subject matter of my noble friend’s Bill is more contentious and more likely to be subject to more intense levels of debate than the remainder of the recommendations. This morning’s debate demonstrates the wisdom of that. The commission also commented that,

“this issue has the potential to be divisive and contentious”.

Again, I think that it got that right.

I am not going to try to pre-empt the Government’s decision in relation to the Law Commission recommendations this morning, but it is clear from the nature and contents of, and issues raised in, the debate that there are significant discussions and examinations about this issue still to go on. The Bill would promote the interests of the surviving cohabitants over those of the children of the deceased on intestacy. A number of noble Lords have raised the issue of the problems that that causes. Putting certain cohabitants on the same footing as spouses and civil partners in relation to intestacy would significantly shift the boundaries of what the average person is deemed to be likely to want to happen with his or her estate.

The Law Commission published its report, Cohabitation: The Financial Consequences of Relationship Breakdown in July 2007. In that report, the commission recommended a statutory scheme to create, as a default position, certain legal rights and obligations for living couples who meet the relevant criteria. The Government announced in September 2011 that they did not intend to take forward the Law Commission recommendations for reform of cohabitation laws in this parliamentary term. Proceeding with the present Bill would separate out the law relating to the ending of a cohabiting relationship during life and on death. This is not to suggest that the law in these situations is perfectly aligned at present, but it will be considerably less so if this Bill is enacted. I am not certain that this will be a good development.

In saying this, I acknowledge the arguments of my noble friend and the Law Commission that the reform relating to the property rights of the cohabitants where a relationship is ended by death are distinct from that and should be considered independently of the commission’s recommendations for the reform of the law relating to the property rights of cohabitants where a relationship is ended by separation. However, there is a reasonable view that the rules relating to the end of a cohabiting relationship by death and by separation should be considered together.

I am second to none in my admiration and support, as I have said, for the Law Commission and my noble friend Lord Lester’s work on these and other issues over the years. I have supported his approach to proposals on many occasions in the past and I am absolutely sure that I will do so in the future. I know that my noble friend and the Law Commission would not propose reforms that are anything other than carefully thought-out and technically correct, and supported by a large body of opinion. I acknowledge that there are cases under the present law where the intestacy rules and the family provision rules may operate harshly against people who would under this Bill be qualifying cohabitants.

However, the reforms we are considering in the Inheritance (Cohabitants) Bill are the legal stuff of everyday life. They would affect a large number of people over many years. Such reforms should be carried forward by as broad a consensus as possible of all reasonably minded people. I am not certain that such a consensus yet exists. Indeed, I think that today’s debate underlines the lack of such a consensus.

I am also mindful that while there are arguments to distinguish between the law’s treatment of living and dead cohabitants, there is at least some merit in viewing the living and the dead as part of a continuum that should be dealt with consistently as a whole, rather than piecemeal, which again was a point made by a number of noble Lords in their contributions. The urgency of the case for reform must surely be diminished by the ease with which cohabitants of all kinds can make provision for one another on death by the relatively simple expedient of making a will.

The Government will reply to the Law Commission’s recommendation in due course and in the usual way, and I am not prejudging that decision today. However, I must make clear at this stage that, while the Government obviously will not oppose Second Reading, we have strong reservations. However, I want to say to my noble friend that, as so often, by raising a debate through a Private Member’s Bill and by attracting the kind of contributions that have been made today, he has taken the debate forward in a very constructive way.

I am in a happy position, which is not always the case when one is summing up and has to look through 27 questions asked of the Minister during the debate. But I kept full notes, which, along with the Hansard record of this debate, will be part of the background against which the Government will ultimately make their decisions on this matter. We obviously will not oppose Second Reading and I look forward to my noble friend’s response.