Divorce (Financial Provision) Bill [HL] - Second Reading

Part of the debate – in the House of Lords at 12:23 pm on 11th May 2018.

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Photo of Baroness Deech Baroness Deech Crossbench 12:23 pm, 11th May 2018

My Lords, this Bill would replace the current system for splitting money on divorce, a system that is past its sell-by date, with a tried and tested system modelled on that used in Scotland and in most of Europe and North America.

In the world beyond this Chamber, family law and its shortcomings are daily fare. I am a devotee of “The Archers” and regard its storylines as good indicators of common concerns. For those of your Lordships who do not listen, I should explain that the following issues are ongoing: a no-fault divorce between Alistair and Shula; surrogacy for Ian and Adam; residence rights for Will; marriage versus cohabitation for Fallon and Harrison; and a prenup for Justin and Lilian. It is all over the television. The Times has taken up the causes: no-fault, money, prenups and cohabitation.

The outgoing President of the Family Division, Sir James Munby, has allowed me to say that he favours reform. The noble and learned Lord, Lord Mackay, the noble Baroness, Lady O’Cathain, and the noble Lord, Lord Grade, do too, although they are unable to be here.

Several judges of the Supreme Court are family law specialists and their decisions regularly, but sadly, make headlines. I say “sadly” because some obvious outcomes, such as one spouse not having a lifelong claim to a fixed share of the earnings of the other ex-spouse, are costing hundreds of thousands of pounds to determine. Other factual situations present themselves, such as no-fault divorce and how many times a former spouse can come back for more, which one would have thought were resolved but which were not, and the outcome is anyone’s guess. But the Government are doing nothing and, for decades, have not taken up pressing issues in family law apart from procedural ones. That is shameful, not just because the lives of ordinary couples and their children are laid waste by the costs and the bitterness and uncertainty of the law but because it has gone so far as to offend against the principles of the rule of law, as expounded by the late Lord Bingham.

In my speeches on this Bill, most recently just over a year ago, I have set out the relevant uncertainty, unpredictability and inaccessibility of the law, largely judge-made, despite the existence of a statute of 40 years ago intended to clarify matters. But the rule of law requires that the law be accessible, intelligible, clear and predictable. Issues should be resolved by application of the law and not by discretion. Means must be provided for resolving disputes without prohibitive cost or undue delay. The procedures should be fair. The current law, based on Section 25 of the Matrimonial Causes Act and as embroidered by judges for over 40 years, fails all those tests.

It is nothing to be proud of that the wives of wealthy men come to London from all over the world for a generous settlement, giving the city the title of “divorce capital of the world”. It is nothing to be proud of that, in many cases, the legal costs of resolving the finances eat up half or more of the entire assets available to a couple, depriving their children of what should be their future stability. In a recent case about a £30,000 annual award to a child, £295,000 of costs were accrued. I note also the case where the husband was awarded £50,000 but was left with a bill of £490,000 in costs, and the case where the costs swallowed up the entire assets.

It is nothing to be proud of that judge-made principles, as they strive to keep up with their view of societal changes, swerve from compensation to need to fair sharing, so that proper advice and predictability fly out of the window, as the noble Baroness, Lady Shackleton, will tell you. As lawyers grope for guidance, statements in judgments are parsed as if they were statutory provisions, with surprising outcomes. It is nothing to be proud of that financial issues may take years to resolve after the divorce is finalised and that an ex-spouse can return to court for a fresh award decades after the divorce.

It is nothing to be proud of that children are not only deprived by this state of affairs but that basic child maintenance is not well enforced and that the statutes that might give children more protection are not fully explored. My Bill would apply to all marriages and civil partnerships. It does not seek to change the law on child support, which remains vital and underenforced. I wish that the lawyers who campaign for no-fault divorce would campaign as strenuously for child support. My Bill would strengthen the position of children by requiring consideration of children’s housing to the age of 21, bearing in mind the increased rates of higher education and staying at home. It would make prenuptial and post-nuptial agreements binding as long as the parties had independent legal advice.

We hear much now about the desirability of no-fault divorce. That idea—a quick divorce without attribution of blame—places squarely on the table two irreconcilable notions. What is the point of fault-free divorce if the couple then spend years fighting over their money, with much more bitterness, expense, waste and loss to their children than ever was caused by the actual divorce petition? If it is sensible to recognise that a marriage may break down without fault, what rationale can there be for expecting one of the former spouses to continue to maintain the other for years and to give him or her half their pension and sometimes the home? The only rationale is, quite rightly, protection of the children.

As the Law Commission said in its 2012 report on this issue:

“The situation facing family judges has therefore been likened to that of … a bus driver who is given a large number of instructions about how to drive the bus, and the authority to do various actions such as turning left or right. There is also the occasional advice or correction offered by three senior drivers. The one piece of information which he or she is not given is where to take the bus. All he or she is told is that the driver is required to drive to a reasonable destination”.

The Law Commission recommended that prenuptial agreements should be binding and that the old bias against them was ended in the Supreme Court decision in Granatino. However, so many conditions are attached to their binding nature by the Supreme Court that couples now spend a fortune on litigating over whether or not the prenuptial agreement is in fact binding. A recent example is the case of BN v MA, where the prenup was upheld but the costs of doing so were £400,000, and another where it was largely overridden so that the husband was awarded £1.7 million for a house but the legal costs were also £1.7 million.

My Bill would put prenups on a statutory footing, with few conditions except those that normally apply to avoid fraud and duress in contracts. It may not quickly become the custom in this country for engaged couples to enter into such a contract, although it is de rigueur in most of continental Europe. For older couples who would like to enter a second marriage but are fearful that if the second marriage went wrong the children of the first marriage would lose out to the second husband, the ability to sign a prenup would allow them to marry with reassurance that the children would be protected and would not lose out.

Countries which allow prenups do not have higher divorce rates than we do, an argument put forward by those opposed to them. It seems to make little difference. Giving them statutory force would have the advantages of improved predictability of outcomes, meeting public expectations that they can make their own arrangements and maybe encouraging marriage for those who, with past bad divorce experience, may be reluctant to commit again to a potentially financially ruinous legal situation.

The main provision of my Bill is that it would introduce the well-known system elsewhere in the world of a fair starting point as the equal division of all the property and pensions acquired by the couple after marriage. It would exclude premarital assets, inheritances and gifts. There is flexibility in the Bill to allow the house to be retained for the accommodation of, for example, a mother and children, and to disentangle the situation where premarital assets are used to buy and improve marital property.

The noble and learned Lord, Lord Hope, criticised the Scottish law in the case of Miller as lacking inflexibility, but the recent report on the Scottish law by the University of Glasgow has reassured him that there is enough flexibility but still enough certainty. Provision is made in my Bill for maintenance of up to five years unless there is exceptional hardship, following Scotland and most of the rest of the world. Property, pensions and lump sums may provide more efficiently for the support of a woman who cannot or will not work.

This brings us to the nub of the changes in society which this Bill is trying to address. The law for centuries has seen all women as dependants, certainly once they marry, tied to their husband’s financial situation and social status for ever, regardless of the nature of the breakdown or her own capacity. In brief—noble Lords know the social changes all too well—72% of mothers go to work, according to the Institute of Fiscal Studies, whereas in 1975 only half did. Women’s education and career prospects, equal opportunities and pay law have driven this, and two-earning couples have become the norm.

However, to the law, this is unknown. There is a thesis to be written about the absence of the modern working woman from family law. Women with no children and with grown-up children are still treated as incapable by many of our judges, although the recent judgments of younger judges show a growing realisation of the change. Those younger judges need encouragement to stick to their guns with a change in the law.

There are those who will say that women suffer in the workplace and from childcare, and that men should continue to make it up to them for the rest of their lives. As long as judges accept as reasonable the demands of some women on divorce for millions and of many more for ongoing lifetime payments, then subconsciously or consciously male employers will never take women as seriously in the workplace as they should. The majority of women who work feel downgraded and belittled by the alleged helplessness and unreasonable demands made by some. Extreme handouts to divorced wives do nothing to help unmarried women and single mothers who are making their own way in the workplace. Women are not all victims, they are autonomous, and sometimes they have to make over property to less well-off husbands on divorce regardless of behaviour. Of course the law is equal, but the attitude of judges is not.

This brings me to the objections to any reform at all by the family law Bar and the objections to some reforms by solicitors. It is similar to the lawyers’ opposition to the Civil Liability Bill. As Mandy Rice-Davies so famously said, “They would, wouldn’t they?” Or, as an experienced judge put it to me, the Bar is blinded by its own self-interest. It is wedded to the system, as are some judges, because it believes that it is doing a good job. It is, within existing parameters, but at a terrible cost, for hundreds of thousands of pounds—which divorcing couples need—are spent on legal costs. The Bar objects to any changes because most couples reach an agreement without going to court, at great cost and because the expense of seeking what they see as fair is prohibitive. In the local family court, I have seen those poor couples who have no legal aid and representation on only one side. “That’s £50,000 costs chalked up already,” says the genuinely helpful judge, “and if you cannot reach accord today, in the little room at the end of the corridor, it’ll be another £25,000 if you go to another judge for further determination”. They settle because of the unpredictability of the next judge, as the noble Baroness, Lady Shackleton, will tell you.

Another report on the Scottish system, which forms the basis of my Bill, points to a far higher rate of negotiated outcome there because of clear guidelines. The family law Bar points to the guidance for such couples, issued by the Family Justice Council. I have read all 72 pages of it. It would make a great graduate thesis on the law but I have never seen it cited in a judgment and it is far too complicated for a couple to use, setting out, as it does, all the twists and turns the law has taken recently. The Bar ignores the empirical evidence of the more successful and less degrading operation of the law in other countries and the fact that no action has been taken on the substance of the Law Commission proposals. What the Bar sees as fair is a far cry from what ordinary litigants see as fair and the Bar makes the assumption that I have already criticised of women as victims.

The Bill offers an off-the-peg solution. It will end the attitude of some judges that, since we all look better in Savile Row suits, there must be no Marks & Spencer ready-made. The Scottish law, very like European law—with which alignment is arguably more desirable than ever—has been reviewed after 30 years of operation. The Family Law (Scotland) Act 1985 was based on the work of the Scottish law commissioner, Eric Clive; Scotland has no-fault divorce and cohabitation law. The recent report, Built to Last, gives Scottish law a glowing review; in particular, it spells out how much better it is than English law—a view widely shared except by the lawyers at the English Bar. I give you just two comments from the report. First, the law in Scotland,

“has been successful in achieving one of its aims which was to encourage parties to reach their own agreements about the financial and property consequences of divorce”.

Secondly:

“English law is broken and needs mending: but ours doesn’t … generally speaking, it’s a gem”.

I am offering that gem, which will reduce trauma for children and the need to go to court, lower costs, put less stress on couples and enable a fairer outcome, recognising partnership in marriage. For the first time, it would recognise equality of spouses, rather than subjecting their claims to the view taken of them by the judge. The wife would no longer be a supplicant but a partner ending a partnership on an equal footing. Above all, it would be the result of democratic debate here for the first time in decades, and take account of public opinion—I cannot tell you how many sad letters I get about this—and the changing nature of marriage.

It is a disgraceful state of affairs when the Government —this one and previous ones—neglect family law, which affects hundreds of thousands of people and their children every year. I know that the Bill as drafted is not as satisfactory as it should be, being a Private Member’s Bill—I must thank the noble and learned Lord, Lord Walker, for helping me so much—but its principles are clear. It has support from around the House. I say this to the Government: do something. Take this over. It is a vote winner and it is the right thing to do. I beg to move.