Law Commission – financial remedies reform options

The Law Commission have announced that they are going to be assessing the reform options for the laws governing finances on divorce and the termination of a civil partnership.

The Law Commission state the problem is that every year, tens of thousands of couples begin proceedings for separation which result in the use of financial remedy orders. Financial remedy orders can and often include the sale and transfer of property, maintenance for children, civil partners and spouses, and the splitting of pensions.

However, the laws which govern how financial remedy orders are used are close to 50 years old, with the Matrimonial Causes Act 1973, and subsequently in the Civil Partnership Act 2004.

The Government has asked the Law Commission to review whether the current law is working effectively, and delivering fair and consistent outcomes for divorcing couples.

In conducting this review, the Law Commission will carry out a thorough analysis of the current laws on financial remedies. Their aim is to determine whether there are problems with the current framework which require law reform, and what subsequent reform might look like.

The project will not just have an England and Wales focus, as the Law Commission will consider the financial orders made by courts in other countries and the laws governing them.

The project will conclude with the Law Commission publishing a scoping report in September 2024, which could provide the basis for a full review (and future financial remedies reform).

The Law Commission’s analysis of existing law will consider whether there is potential for reform in specific areas such as:

• The discretionary powers given to judges over the division of financial assets, and whether there is a need for a clear set of principles, enshrined in law, to give more certainty to divorcing couples.
• Whether there should be wider powers given to the courts to make orders for children over the age of eighteen.
• How maintenance payments for an ex-spouse or civil partner should work.
• What consideration the courts should give to the behaviour of separating parties when making financial remedy orders.
• Orders relating to pensions and whether they are overlooked when dividing the divorcing parties’ assets.
• The factors judges must consider when deciding which, if any, financial remedy orders to make.

In 2014, the Law Commission’s report, Matrimonial Property, Needs and Agreements, reviewed marital property agreements and other specific aspects of the financial consequences of divorce and dissolution. As part of the new review, the Law Commission will assess whether the issues covered in the Matrimonial Property, Needs and Agreements project need to be reviewed beyond the 2014 recommendations.

The Law Commission has already started preliminary work on this project, and endeavours to publish the scoping paper in September 2024. You can read the full project Terms of Reference here.

For general enquiries, you can contact the team at: financialremedies@lawcommission.gov.uk.