ANDRZEJ BOJARSKI KC
FAMILY LAW BARRISTER, ARBITRATOR AND MEDIATOR
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A No-Nup? Great Idea But DIY or consult an Expert?

3/31/2014

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Are you living with someone but not married or in a civil partnership?  If so, having some sort of agreement to deal with what might happen to your assets if you split up is even more important than if you are married (see my earlier blog).  Married couples or civil partners can apply to the court when they separate for orders which share their assets or for maintenance payments, to be decided according to their needs and what would be fair.  Unmarried couples generally do not have those rights, save for some limited rights where children are concerned (unless you live in Scotland where there are greater remedies for unmarried couples).  If they have entered into a living together agreement, sometimes called a 'no-nup',  they can set out what will happen if and when they split up.  When drafted properly this can save a lot of angst and expense upon separation.  Such agreements are, without doubt, a prudent and sensible idea.  Not enough people think about them or use them.

Online services to help people draw up such agreements are springing up.  The enticement of these services is an agreement done on a DIY basis at low cost.  But before launching into such a DIY agreement, beware.  As with all things, you get what you pay for.  Any kind of legal contract may have implications which the parties may not appreciate.  Once agreed by the parties the terms of their agreement may be binding on them even after they separate; perhaps in ways they had not entirely intended or understood at the time they entered into it.  Unlike married couples, there is no general law permitting a court to vary most of the terms of a contract or trust which unmarried parties have created between each other.  

Tempting although a cheap online agreement may be, do not underestimate how complex the issues may be.  Investing in a family lawyer to provide some advice based on long experience and wisdom and to draft the agreement may seem comparatively expensive compared to the DIY option.  However, experience shows that those costs pale into insignificance when compared with the consequences of trying to unravel a poorly thought out and or ill-drafted agreement years later.

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When love goes sour…At Least One of You might be better off in Scotland

3/15/2014

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According to the Office for National Statistic in 2012, there were 5.9 million people cohabiting in the UK, double the 1996 figure. Over the same period, the percentage of people aged 16 or over who were cohabiting steadily increased, from 6.5 per cent in 1996 to 11.7 per cent in 2012. This makes cohabitation the fastest growing family type in the UK. 

Has the law kept pace with this social change? All family lawyers know that it has not. Various statutes have given some rights to parties who have lived together for at least two years upon the death of one of them (e.g. the Inheritance (Provision for Family and Dependants) Act 1973 and the Fatal Accidents Act 1976) but where the relationship breaks down instead of being ended by death the parties are thrown back onto the strict law of property. The law of property has moved only slowly to recognise the special circumstances which exist in cohabiting relationships, despite the social changes to family life being recognised by Lord Denning as long ago as the 1960s. Real injustice can result unless judges are persuaded to strain the law or the facts of cases to the limit to achieve 'fair' outcomes.

In July 2007 the Law Commission proposed legislation to empower the courts to grant discretionary financial relief to cohabitants after relationship breakdown. The law in Scotland had already taken a leap forward by that time. In 2006 the Family Law (Scotland) Act 2006 provided cohabiting parties in Scotland with the power to seek financial provision upon their relationship breaking down. The Supreme Court scrutinised the Scottish law in Gow v Grant [2012] UKSC 29 and gave it a broad, purposive interpretation. Baroness Hale called on English law to introduce similar remedies.

So far the Westminster Government has taken no steps to change the law. Personally, I think this is a shameful dereliction of duty. The law does not currently serve the needs of the vulnerable parties to a family very well where the parties are unmarried.  Recently Lord Marks of Henley placed his Cohabitation Rights Bill before Parliament as a Private Members Bill. The text can be found here.  The Bill does not follow the Scottish model exactly. It is, however, an interesting and potentially useful scheme to obviate the injustice which can occur after long cohabiting relationships end, especially those cases where children have grown up and remedies under Schedule 1 of the Children Act 1989 do not provide a means of meeting income and housing needs for at least a limited time.

The prospects of this Bill becoming law are very, very low given that it is a private members bill, without Government sponsorship and we are nearing the end of another Parliamentary session.

The contrast between the law for unmarried couples in Scotland and that applying to those over the border in England is now very striking.  I am sure many non-lawyers. and even many lawyers, will be surprised that the law on such an important social issue is so different in two parts of the UK. In Scotland an unmarried cohabiting couple can, when they separate, go to court and ask that their property is divided in a way which is fair based in what happened during their relationship.  In England and Wales there is no such right. In England and Wales when a couple separate each is only entitled to keep what each of them owns according to strict property law. Although the cases of Stack v Dowden and Kernott v Jones have potentially made the law a little more flexible in England and Wales the state of the law still makes cases complicated, expensive and often results in real unfairness to one or other of the parties. It is not the only big difference between family law in England and Scotland: financial settlements after divorce are also very different, but that can be the subject of discussion some other time.  

The Law Commission has already recommended a system similar to the Scottish system for England and Wales. The Supreme Court has called for similar legislation. So far the Government has refused to commit to any such new laws. Why? Presumably they fear being portrayed as being ‘anti-marriage’.  It is often said that 'there are no votes in divorce.'  The 2011 census shows that fewer people are getting married. More are choosing to cohabit. The need for legislation is stronger than ever. At the moment it is not even on the horizon.

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The Myth of Common Law Marriage and the Security of a Living Together Agreement

3/15/2014

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You meet someone, you fall in love, you begin to live together, you have children….and so life takes its own course. Most people do not give much thought to what will happen if the relationship breaks down.  At least, they tend not to until cracks begin to appear in the relationship.  Statistics, and our own experience with friends and family, tell us that relationships fail with disturbing regularity these days.  In the middle of the pain and acrimony of a separation, the partners need to confront the financial implications of their separation.

Where the couple was married or in a civil partnership (in the case of a same sex relationship) the law provides extensive powers to sort out the financial affairs in a fair way.  In those cases it does not matter very much which partner owns the property or earns the money.  A court is able to redistribute the assets and income in a way which is fair according to the facts of each relationship.

But what if the couple was not married or in a civil partnership?  In England and Wales there has been no way of informally acquiring the status of man and wife since the mid-18th Century at the latest.  Despite that fact it is astonishing how many people think that once they have been living together ‘as man and wife’ for a couple of years or so, they acquire rights to the other’s property and income by way of a concept they tend to refer to as ‘common law marriage’.  As a specialist barrister working in family law for approaching two decades I have often been amazed to hear this belief expressed by people who I would have assumed are educated and intelligent enough to know better.  There is no such thing as common law marriage in English law.  The simple fact is that when it comes to property ownership and rights to financial support the law in England and Wales basically treats two unmarried people who have lived together as a family in  much the same way as it would two strangers who had a business relationship with each other.

This can lead to very expensive court disputes and, in many of them, very hard outcomes.  Someone who moves into another’s house and lives there for many years, being a dutiful and loving partner, helping with the housework, helping with the family finances etc can find when the relationship ends that they have no easy claim for financial support from their partner.  This is hard for people to take and it is, in some ways, an odd situation the law has allowed to continue.  For example, where a woman has lived with a man for two years and the man is killed in an accident which is someone else’s fault, the woman is able to claim damages against the person who caused the accident for the financial loss caused to her by the death of the partner she was financial dependant on.  That has been the case under the Fatal Accidents Act for several decades now.  In a similar way, if someone you have lived with for at least two years dies and leaves no reasonable financial provision for you in their will, the court can be asked to consider effectively rewriting their will after their death to benefit you.  That has been the law since the 1970s.  So someone who loses their partner by death is potentially much better off than someone who has their partner of many years throw them out of their home.  Where there are children concerned, there are legal powers under which the court may be able to help.  But if there are no children, obtaining financial support can be very difficult.  Although there is talk of changing the law, it is unlikely to happen for years to come.

So, unromantic though it seems, any couple embarking on a long-term relationship but not planning to marry would be well advised to sit down at an early stage and consider drawing up a living together agreement (also known as a cohabitation agreement).  Such an agreement can set out how your financial affairs will be run during the marriage and, critically, what you intend to happen if you separate at some point in the future.  It is similar to a pre-nuptial agreement prior to a marriage, but potentially even more important because without marriage there is no divorce procedure which includes a careful consideration of financial issues within it.  It is also important to review such an agreement at regular intervals because as time goes on circumstances change.  Many modern couples see such an agreement as a useful part of life: like annual health checks or MOTs for cars.  It is an opportunity to check that everything is still alright.

But before you sit down over the kitchen table to thrash out a living together agreement, do not underestimate how technical things can get.  In most cases the drafting of an agreement is best left to an experienced lawyer.  It is also important that both sides take independent legal advice before signing an agreement.  This may not cost as much as you think.  A specialist family lawyer, solicitor or direct access barrister, is likely to provide the drafting of the agreement and advice on it quickly and at a price which is very competitive bearing in mind the level of expertise you will be receiving.  Compared to the costs of court proceedings sorting out the financial arrangements at the end of a long cohabiting relationship where there was no living together agreement, the costs of making such an agreement are small beer indeed!



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    Andrzej Bojarski

    is an experienced family and divorce lawyer with an international profile as an advisor and advocate in the most difficult family cases. He also applies his skills to resolving family disputes by alternative dispute resolution.  Regularly called upon to lecture and write on family law issues around the world, he also provides legal commentary by social media.

    © Andrzej Bojarski. Unauthorized use and or duplication of the material contained on this blog without permission from this blog's author is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Andrzej Bojarski with appropriate and specific direction to the original content.

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