The pitfalls of inconsistency in the family courts

UK family law that provides judges with such wide discretion when dividing assets on divorce has been a perennial bone of contention in legal circles. The laws were challenged again recently by Mr Justice Mostyn, as he attempted to influence a change in the legislation governing financial remedies.

Mostyn has long campaigned on the issue, criticising what he describes as the “woolly discretion” permitted by senior courts, which feeds into the practice of the lower courts. Such discretion, he maintains, is the reason for enormous legal costs being run up in “middle money” cases where there are not vast swathes of assets to divide.

The costs issue arises because a party has the ability to pursue arguments which may, or may not, be successful all the way to a final trial. Generally, there are no or limited restrictions imposed along the way to tighten the scope of permitted arguments, so the parties’ positions can remain completely polarised. These arguments become very costly over a period of 12 to 18 months before the case is finally determined. At that point, both parties are waiting for the judge to decide what is, in their view, a “fair” outcome. The inevitable problem is that “fairness” does differ, sometimes considerably, from judge to judge.

There are, of course, some parameters when it comes to the way in which judges divide assets on divorce. However, the concern of many family law professionals is that the lack of consistency and consequent uncertainty over the meaning of ‘fairness’ greatly adds to the financial burdens on each side.

A particularly thorny area is the determination of the parties’ financial needs. Financial needs usually centre on the amount of money a person needs to sustain themselves, and the type of property appropriate for them to live in. On both points, judges are notoriously inconsistent in their assessment.

The inconsistency affects more than just a handful of outlier cases. Instead, given that the vast majority of divorce cases are ‘small money needs cases’, where the emphasis is on making a decision that allows the reasonable financial needs of each party to be met, such inconsistent approaches have a far-reaching effect across the country. To allow a situation where such an enormous range of needs can be validly argued is not conducive to keeping legal costs down or to reaching agreement. Mr Justice Mostyn is right that more rules are needed to tackle the problem.

The concern amongst lawyers proved so great that the Law Commission launched a review in April to determine whether there is a need for reform of the laws governing finances on divorce. However, since the Commission does not aim to publish a scoping paper until September 2024, any consultation on proposed reforms is perhaps unlikely to be undertaken earlier than 2025. Such a timeframe underscores the long and arduous road to be travelled before any concrete reforms to the law are made, if they are made at all.

The Law Commission must determine how to achieve a fair balance between the need for greater clarity and consistency, and the need to retain the court’s ability to find creative and bespoke solutions that cater for the individual circumstances of each party. The latter is arguably the most unique and attractive feature of our divorce law, which delivers benefits that should not be underestimated.

Written by Anna Shadbolt, partner at Dawson Cornwell