Red flags to look for when spotting financial abuse
Marriage (tick), house (tick), baby (tick)…. Or maybe not…
As we plough forward into the 21st century, the classic life plan of finding someone to marry, setting up home and starting a family (in that order) has become old-fashioned, impracticable and, to many people, undesirable. These days, the focus for many 20 and 30-somethings is on recession-proof careers and getting on the property ladder. Marriage and children often come later, if at all.
Last year, it was estimated that 5.9 million people in the UK are cohabiting with a partner, but not married or in a civil partnership. This figure has more than doubled over the last four years (it was 2.9 million people in 2009). The marriage rate is still increasing (just) and civil partnerships, which are only available for gay couples, are on the rise (a 3.6% increase since 2011), yet more couples are choosing to cohabit, either as a precursor, or an alternative, to marriage. The prohibitive cost of the aspirational, modern-day wedding (as exacerbated by all those celebrity bashes, wedding blogs and the flood of photos on social media) may also mean couples who have just managed to afford a deposit for a house are being forced to save up all over again for the big day.
The perils of cohabitation
Worryingly, few people are aware of their rights (or lack thereof) when a cohabiting couple breaks up or one party dies intestate. The dangerous myth of the “common law marriage” still persists (even though the concept hasn’t existed since 1753!).
In reality, regardless of the length or enduring nature of the relationship, the parties will never have the same rights as married couples unless or until they say “I do”. There is no flexibility, no grey area. A couple who have lived together for 30 years and have 3 children have no legal rights to make any financial claims against each other upon separation (except within the narrow constrains of property law), even if one party has given up their career to look after the children and been left with no income, no pension and no employment prospects.
In a recent Supreme Court case, Jones v Kernott  UKSC 53, Lord Wilson accused Parliament of a “continued failure” to grapple with the issue, leaving the courts with “limited” powers to redistribute property when a cohabiting relationship breaks down. Back in 2007, the Law Commission reported that:
“The existing law is uncertain and expensive to apply and, because it was not designed for cohabitants, often gives rise to results that are unjust.”
The Law Commission recommended an opt-out statutory scheme to give unmarried couples financial remedies in the event of separation. This type of scheme involves the tricky task of defining “cohabitation” and also identifying at what point legal rights should be triggered; but there are plenty of international models to use as a basis for comparison (for example, those in Scotland, Canada, Spain and Australia). The Law Commission suggested couples should qualify if they had a child together or had cohabited for a minimum period (somewhere between 2 and 5 years). But their proposals were rejected by the Government in September 2011.
It is possible for cohabiting couples to enter into a cohabitation agreement to regulate their rights and responsibilities. This can cover a wide range of issues including interests in property, bank accounts or the payment of bills. However, these agreements are rare in practice and cannot match the financial remedies available to married couples upon divorce.
So, what next?
A recent survey commissioned by Resolution has found that over half of MPs would support new laws to give greater protection to unmarried, cohabiting couples. The issue was debated at the recent Lib Dem party conference and they have put forward proposals for an opt-out statutory scheme based on the Law Commission’s recommendations.
With gay marriage set to hit the statute books next year and an increasing recognition of alternative family structures, why should couples in enduring, unmarried relationships not have the same legal protection as married couples and civil partners? Unfortunately, unless unmarried couples and lobbyists mount a visible public campaign, it seems unlikely the issue will reach the top of the Government’s agenda. Particularly while their focus is on incentivising couples to marry with token tax breaks that wouldn’t even cover the cost of the canapés…
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