• December 6, 2023
 Is the end nigh for London as the ‘divorce capital of the world’?

Is the end nigh for London as the ‘divorce capital of the world’?

We are all familiar with the sensational headlines splashed over the front pages of newspapers heralding record financial orders upon divorce and declarations of London being “the divorce capital of the world”. Is this about to change as a result of the Law Commission being asked to consider this area of the law?

Those seeking advice upon the breakdown of their marriage may be unfamiliar with the notion that the statute that governs the financial position on divorce – the Matrimonial Causes Act 1973 – celebrates its 50th birthday this year. It is trite to point to what significant societal changes have taken place during that 50 year period: from the fact that homosexuality had only relatively recently been decriminalised at the time to the introduction of same sex marriages; from the relative stigma attached to divorce in the early 70s to its near ubiquity nowadays; from the lingering unease of children being born out of wedlock to the fact that cohabiting couples are now the fastest growing family type in the UK; and from the traditional model of the breadwinning father and stay at home mother to today’s shared roles and equal opportunities.

It is plain that the picture of “family” is very different in 2023 to that at the time the 1973 Act was conceived. Whilst it is true that the Act is drafted in such a way that it has a proven ability to be malleable – and even chameleonic – in its adaptivity to the changing social norms touched on above, many, perhaps most notably Baroness Deech, have for many years called for it to be overhauled.

Section 25 of the Act requires the court to take into consideration “all the circumstances of the case” and to give first consideration to the needs of any minor children. There follows a relatively comprehensive checklist of factors to which the court must have specific regard – assets, resources, income, needs, standard of living, contributions, length of the marriage, health, conduct etc. It is this relatively open ended guidance that has permitted judicial interpretation to move with the times and, some would say, the mood of the judges. Perhaps most notably, in October 2000 the House of Lords marked a revolutionary change by recognising the contribution of the homemaker as being equal to that of the breadwinner and therefore, where assets exceed needs, equality of division of the assets has been the starting point in the cases that have followed. As a result of their judgments, the Law Lords fundamentally altered the way in which the same statute was subsequently applied, notwithstanding almost 30 years of precedent in which it had been dealt with in a very different manner. Of similar import was the 2010 Supreme Court decision that attributed much greater (and sometimes even determinative) weight to prenuptial agreements in appropriate circumstances.

The only substantive change to the legislation was an amendment to the Act in 1984 requiring the court to give consideration in every case to whether – and if so when – it might be possible to achieve a clean break by terminating maintenance obligations without “undue hardship.” In spite of the change, where maintenance was payable it was still commonplace for the next 30 years or so for the London courts to order “joint lives maintenance orders” i.e. requiring ongoing maintenance payments to a former spouse for so long as they both remain living; something one senior judge referred to as “a meal ticket for life”. Again, the pliable statute subsequently allowed the pendulum to swing back and judicial interpretation has moved away from this in the past 10 years or so, so that joint lives maintenance orders are now the exception rather than the rule.

One view is that the Matrimonial Causes Act 1973, for all its faults, has permitted such interpretation and development in a way that has kept pace admirably with the societal changes referred to above. An alternative view is that the statute is so outdated it has required reinterpretation and new application by unelected judges without any input from Parliament. Indeed as long ago as 2013 former High Court Judge of the Family Division, Sir Paul Coleridge, called for the statute to be “humanely killed off” and described it as “…unduly clunky, slow and antediluvian”. “We must”, he said, “face up to the fact that family law shapes society…and the law in this field has an urgent and desperate need for a root-and-branch overhaul.”

Whatever one’s view, such a supple statute comes at a price. The judges have developed a highly discretionary approach in which it is possible for two experienced and specialist judges to arrive at different outcomes on the same set of facts. Thus it is often impossible or difficult to give couples entering into the system reliable and precise advice about what the outcome is likely to be if they take the matter to a determination by the court. This in turn makes it more difficult for cases to settle by consent when different lawyers might perfectly reasonably predict different outcomes to their respective clients. A bespoke outcome based on the application of generalised principles in each case necessarily leads to uncertainty – and in doing so often brings with it costs and delay.

Is it now time for an antiquated statute and the meandering case law that has developed under it to be replaced by a modern statute based upon updated principles and fit for today (and tomorrow’s) purpose?

Baroness Deech, a leading academic lawyer and crossbench member of the House of Lords, describes the current law as “unacceptable”. She has long campaigned for an approach that gives more certainty and less judicial discretion, with clear and fixed principles. She would favour a system more in line with the Scottish model where maintenance is rare and only exceptionally paid for more than 3 years and where the division of capital is confined to the clear “matrimonial assets”.

Family lawyers will watch the space intently, as will the public too no doubt, this area being one of such keen interest and application to so many.

Still, let’s hope that the toils of the Law Commission fall on more receptive legislative ears than previous reports seeking revolution in family law and that they do not fall by the wayside like “2007 Law Com No 307 – Cohabitation: The Financial Consequences of Relationship Breakdown” or “2014 Law Com No 343 – Matrimonial Property, Needs and Agreements”. Will this latest family law focussed Law Commission report prove to be another casualty of the limited political appetite to legislate for personal relationships or is this a new era, hot on the heels of the eventual introduction of no fault divorce nearly a year ago?

Don’t hold your breath…

Charlotte Posnansky, Senior Associate, Charles Russell Speechlys

Charlotte Posnansky

https://www.charlesrussellspeechlys.com/en/people/c/charlotte-posnansky/

Charlotte advises on all areas of family law. She focuses on financial remedy cases and has particular experience in complex and high value cases, involving a combination of trusts, business interests, offshore assets and often with international elements. She regularly advises on the drafting of pre-marital agreements, including in high and ultra-high net worth matters, as well as litigating to enforce/challenge pre-marital agreements upon a subsequent divorce. Charlotte also advises on all aspects of private children law including contact, residence and leave to remove applications.

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