Happy New Year, and welcome back to our blog. We hope you and your families had a restful and joyful festive period.
This week saw the annual press story about “D Day” or “Divorce Day” which is (apparently) the first working Monday after the New Year celebrations. So that was Monday this week (5th January 15) when according to the press, lawyers were inundated with enquiries from prospective clients. It is also the time when Relate and other relationship counsellors say they see an increase in new clients, as people try to work on saving their relationship after a difficult festive period.
On the subject of divorce, Baroness Deech (an independent peer in the House of Lords, and outgoing chair of the Bar Standards Board) has been in the press again. This time she has been telling the Financial Times that divorce ought to be tougher on women – or at least that is how it has been reported. We thought we’d take a closer look.
At present the Baroness is endeavouring to steer a bill through the Lords which would inject greater certainty into family law by making prenuptial and postnuptial agreements binding, under certain conditions. You may recall that the Law Commission has also recommended recognition of marital agreements. The other main part of her bill (which we wrote about it here) deals with sorting out finances on divorce where there has been no valid prior agreement. The proposals stipulate that all the property couples acquire after they are married would be divided equally in the event of a divorce, but each would keep the assets they owned beforehand.
Baroness Deech believes that our current family justice system sends out a bad message to young women. As she put it in her interview with the FT: “Never mind about A-levels or a degree or taking the Bar course — come out and find a footballer.” She goes on to state that family law and the way finances are dealt with on divorce, “says once you are married you need never go out to work, [that] you are automatically entitled to everything you might need even if that marriage breaks down and it’s your fault”. Her comments have been reported against the backdrop of the country’s biggest recorded divorce case, where recently Sir Christopher Hohn was ordered to pay his former wife £337m from the family fortune which totalled £869m. That’s an award of around 39% to the wife, with the husband retaining around 61% to reflect his ‘financial genius’ in building up their wealth from scratch.
Ironically, had Baroness Deech’s formula of equal division of post-marriage assets been applied, Mrs Copper-Hohn would have been better off by a further £97.5m as the wealth was generally acquired after their marriage.
What of the Baroness’ attempt to inject certainty into family justice?
The headline clauses are the removal of the wide discretion judges currently have to construct settlements, and its replacement with a provision that matrimonial property is to be shared equally between the parties, subject to a few exceptions (such as a prenuptial agreement, the needs of the children or bad conduct in relation to family assets). The result would be to stop significant capital payouts to wives who marry rich men (including footballers) for short periods of time. Do we really need to protect men from apparently predatory women in this way – or is this approach in fact a form of enlightened equality? Would any such changes simply move the point of argument to “the needs of the children”, and therefore lead to more contests over which parent the children should live with? What do you think?
As we mentioned, the Bill would also make pre- and post-nuptial agreements binding, subject to safeguards, and would limit spousal maintenance to three years, subject to certain exceptions.
Although the limited maintenance provision is similar to the law that operates in Scotland, it has the potential to cause real hardship. It remains the case that women’s careers are often adversely affected by having a family, and by decisions taken jointly when children are born. When mothers return to work, many do so part-time, which obviously affects their income and earning potential in the short-to-medium term at least, and also the ability to make pension provision for the long term. It is still less common for men to take time out in the same way, but it is possible that men who do reduce their hours in order to spend time raising their children are also disadvantaged in career progression subsequently. Should a woman, or indeed a man, with a young family be automatically restricted to just three years of maintenance from someone whose career has been less affected by family decisions? We aren’t convinced.
It is not about, as the Baroness says, never having to work after your vows, and getting everything you’ll ever need when you divorce. The current system of judicial discretion is focussed on needs – primarily those of the children, and then those of the adults. For the vast majority of people who are not awash with money and for whom financing two homes after separation is often very tricky, the more creative options available to judges, and also to families who use alternatives to court, can be a benefit. Whilst certainty is good in many respects we are not sure that the strictures proposed by the Baroness would guarantee the fairness she laudably aspires to with her Bill.
As ever, if you would like to make an appointment to speak to Tricia, Simon, Gail, Adam or Sue, just give us a call on 01223 443333.