In March 2014 the Law Commission ‘Matrimonial Property, Needs and Agreements’ report found there was confusion about how one person should be required to meet the other’s financial needs after their relationship has ended. When separating couples go through the courts, the court has a wide discretion to decide how their property and income should be distributed. One of the main factors considered is the ‘needs’ of each party. However, under the current law the exact meaning of needs is unclear and there is confusion about the extent to which one spouse should be required to meet the other’s needs and for how long.
The Ministry of Justice has therefore asked the Family Justice Council to take forward the Law Commission’s recommendation to clarify the law of “financial needs” on divorce or dissolution of a civil partnership.
Justice Minister Simon Hughes said:
We want separating couples to have the best information available to help when they approach the difficult and emotional separation process. This new guidance will lead to a better understanding and more realistic expectations of what they will expect to receive as financial settlements and enable swifter and better resolution of disputes.
We are committed to making sure that when couples do make the decision to separate they make use of mediation rather than go through the confrontational and stressful experience of going to court. This new guidance will help mediators give advice to separating couples so that they can settle disputes out of court. In those cases that do go to court it will also help the judiciary and prevent regional variations in the interpretation of ‘financial needs.’
The new guidance will be published later in the year and will help:
Divorcing couples - by dispelling myths about need and help couples to approach the separation process with realistic expectations.
The Judiciary - by removing the regional variations in the interpretation of ‘financial needs’ as identified by the Law Commission.
Mediators – so they will be able to give financial advice to help separating couples settle disputes out of court.
The Law Commission’s report put forward three main recommendations
- written guidance to define and explain financial need;
- an assessment of the feasibility of producing numerical guidance to calculate the likely financial outcome of divorce or dissolution; and
- making qualifying nuptial agreements statutorily binding through amendments to the Matrimonial Causes Act 1975.
The Ministry of Justice is taking forward the first of these recommendations and is currently considering the law Commission’s report more fully, including considering the next steps on pre-nuptial agreements and the feasibility of producing numerical guidance. An interim response to the report will be published in August 2014.
Notes to editors
Law Commission - Matrimonial Property, Needs and Agreements Report