The new Solicitors Accounts Rules: what has changed?
For decades many couples have laboured under the misapprehension that they are married at common law, a “common law wife”, despite never having donned a white dress, hired a marquee or uttered the fateful words “I do”. Many long-term cohabiting couples assume that, upon a breakdown of their relationship, they will receive similar treatment to married couples. This is a dangerous assumption for cohabiting couples to make as they currently have a very different legal status to married couples. The Cohabitation Rights Bill aims to provide basic protection for cohabitants and the Bill, if passed, will be welcome news for long-term cohabitees.
The Government has previously found itself heavily conflicted on this issue; how could the Government appropriately protect families in the wake of separation, especially vulnerable parties who had become dependent on their former partner, whilst also promoting the sanctity of marriage? Surely to give equal rights to unmarried couples would devalue the institution of marriage? In reality, the number of cohabiting couples continues to rise and cohabiting but unmarried couples are just as likely to have children as those who are married. To maintain a system where there is a lacuna in the law, leaving an ever increasing number of families greatly exposed, simply for the symbolism of marriage to continue to enjoy ‘pedestal status’ in society, is idealistic, old fashioned and untenable.
Enter The Cohabitation Rights Bill (the “Bill”) which has had its second reading in the House of Lords and is now at the Committee Stage. It aims to establish a framework of rights and responsibilities and provide basic protection for cohabitants, although not affording the same level of protection available to married couples. In short, it provides a sort of low fat, low cal, diet divorce for unmarried couples.
The proposed legislation will allow cohabiting couples with children, or those without children who have cohabited for two years or more, the right to apply for a Financial Settlement Order. An applicant will need to show that s/he has suffered either an economic disadvantage or that their partner has retained a benefit as a result of a qualifying contribution they have made.
As the old saying goes, “there’s no such thing as a free lunch”; an applicant must show they have made a qualifying contribution to the family. This does not have to be financial and includes “other contributions” which benefit the parties or the family in other ways, such as contributing to their general welfare.
In order to make its assessment, the court must have regard to the following discretionary factors which will assist it in determining applications:
The Bill aims to produce a clean break between the parties and affords no real scope for imposing continuing obligations on unmarried couples, other than where there is an economic disadvantage that cannot be discharged immediately. In those circumstances, the court may order that the liability or disadvantage is to be shared equally between the parties. The orders available to the Court also envisage a clean break (eg lump sum payments, transfers of property and sale of property). The only element of on-going obligation envisaged by the Bill is a lump sum(s) paid in instalments, interim lump sum payments and lump sums by way of pension attachment.
The concept and duty to support an ex-partner through payment of spousal maintenance under the Matrimonial Causes Act 1973 for divorcing couples is not replicated in the Bill. By and large, the Bill appears to aim to put parties in the position they would have been had the cohabitation not occurred, i.e. where one party has made a qualifying contribution and now suffers an economic disadvantage because of that, they should be compensated for that disadvantage. Likewise, where a party has retained a benefit due to the other’s qualifying contribution, this should be reversed.
The Bill, if passed, will be welcome news for those long-term cohabitees, those with children, those who believe in common-law marriage and those who simply haven’t got round to tying the knot. But what about willing cohabitees who have actively decided not to get married? Fear not, an Opt-Out is available.
The Cohabitation Rights Bill is currently at the Committee Stage and is not yet law in force in England and Wales.
For further information on opting out of the Cohabitation Rights Bill please see our blog post: The Cohabitation Rights Bill – Opting out.
If you have any questions about the issues raised in this blog, please contact a member of the family team.
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