Cohabitation: The Financial Consequences of Relationship Breakdown [2006] EWLC 179(5) (04 May 2006)

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You are here: BAILII >> Databases >> The Law Commission >> Cohabitation: The Financial Consequences of Relationship Breakdown [2006] EWLC 179(5) (04 May 2006)
URL: http://www.bailii.org/ew/other/EWLC/2006/179(5).html
Cite as: [2006] EWLC 179(5)

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PART 5

EVALUATING THE CASE FOR REFORM

INTRODUCTION

5.1

As we have seen in Part 3, the law does not ignore the position of cohabitants on separation. It could be said that the courts have been attempting to help make up for the absence of a statutory regime dealing more directly with the problems that cohabitants encounter on separation by adapting the general law (to some extent) to fit the demands of the family context.

^[1]

We now consider whether or not those criticisms can be regarded as justifying any reform, and, if reform providing new remedies on separation is thought to be justified, what the basic shape of such reform should be.

5.3

As we have seen, much of the criticism of the current law is predicated on a charge of unfairness and unfitness for purpose.

^[2]

(1) whether or not it is "unfair" that the law should provide no remedy for an individual who has voluntarily acted to the economic benefit of another or made an economic sacrifice, where there was neither:

(a) a clear intention, agreement, assurance or other "trigger" recognised by the general law as capable of justifying conferment of a property right or remedy; nor

(b) formalisation of the relationship in marriage or civil partnership, a step which would give access to the family courts' jurisdiction to provide financial relief on dissolution of the relationship; and

(2) if it is accepted that it is unfair, whether or not the law ought to provide a remedy between cohabitants specifically designed (as the general law is not) to provide a remedy responding to that unfairness.

Despite the criticisms that can be made of the current law, there are many arguments that are made against reform: for example, that it would undermine the institution of marriage; that it would invade the autonomy of those who have deliberately chosen to cohabit rather than marry; that cohabitation outside marriage or civil partnership does not provide sufficient justification for the invasion of an individual's property rights by providing financial relief on separation; and that a new scheme might be productive of costly, acrimonious and sometimes speculative litigation.

5.5

Consideration of these issues inevitably takes us into the realm of strongly contested social policy questions, the resolution of which must ultimately be a matter for Government and Parliament. While it is not for us to decide these issues, it is appropriate for us to attempt to identify them, and to indicate a view where we have one. We hope that the following discussion will help inform and stimulate a wide-ranging and constructive debate.

5.6

In considering whether reform in this area can be justified at all, and, if it can be justified, on what basis and in what cases, we examine the following issues:

(1) whether it is an adequate answer to the criticisms of the law simply to encourage couples to formalise their relationship through marriage or civil partnership, or to regulate their property and financial affairs through the law of express trust and contract;

(2) if that is not an adequate answer, whether any reform should take the form of an opt-in scheme, or a default scheme, which would apply automatically to all relationships falling within its scope, save in so far as the couple had agreed to opt out of it; and

(3) if, as we would prefer, any reform were to take the form of a default or opt-out scheme, to which relationships it should (in broad terms) apply. In particular, whether a distinction can and should be drawn between cohabitants with children and those without. We anticipate that there may be a consensus here in relation to some cases, but not others.

5.7

It may be helpful if we make clear at the outset that, were the law to be reformed, we do not consider that all cohabitants falling within our terms of reference should have access to financial relief at the end of their relationships. The availability of remedies under any new scheme would be controlled or filtered in two ways:

(1) limiting eligibility to apply, discussed in general terms here and in more detail in Part 9; and

(2) basing the decision as to whether or not relief should be granted on substantive principles, addressed in detail in Part 6.

5.8

Access to a remedy would be dependent upon both tests being satisfied. Neither would be sufficient alone, as only parties who were eligible to apply and who satisfied the substantive principles governing the provision of relief would obtain anything. Moreover, for reasons that we explain in Part 6, we do not consider that reform should involve extending the law currently applicable between spouses on divorce to cohabitants.

5.9

At various points in this Part, we draw on the growing body of research being conducted in this jurisdiction into the ways in which cohabitants and spouses view and live their relationships, and the outcomes that couples achieve when they separate. Some of these are large-scale, quantitative surveys, which contain data about the lives and attitudes of a large number of people. Inevitably, such surveys are unable to explain why people behave or think as they do. This is the function of smaller-scale qualitative studies, which seek through intensive interviewing of a smaller number of respondents to gain insight into people's family lives and the practical impact of the law on them. More research is ongoing.

^[3]

ENCOURAGING COUPLES TO MARRY OR TO SELF-REGULATE

As we noted in the introduction to Part 3, a substantial proportion of the public appear to be labouring under a crucial misunderstanding about the current law's treatment of cohabitants: the "common law marriage myth". Moreover, as far as responses to researchers' inquiries indicate, the legal implications of marriage are a long way down the list of most couples' considerations when deciding whether to marry.

^[4]

The legal and economic vulnerability to which many cohabitants and their children are exposed on separation is in part the result of this common law marriage myth. Belief in the myth renders many oblivious of the need to protect themselves and their partners by taking proactive steps, such as drafting wills, executing declarations of trust regarding the family home, entering into cohabitation contracts or, indeed, marrying. If individuals do not take such steps while their relationship is secure (and their partners are willing to confer such protection on them), when they separate and belatedly discover the true legal position they are in danger either of finding themselves cut adrift without any remedies at all, or of having to grapple with the law described in Part 3.

^[5]

However, the fact that a substantial proportion of the public would seem to be badly mistaken about the legal rights and duties attaching to cohabitation and marriage does not of itself justify changing the law to bring it in line with that mistake.

5.13

It will seem to many that the most obvious response to cohabitants' problems is to say that the Government, faith groups and other organisations concerned with relationship support should ensure that the public is better educated about the legal implications of marriage and civil partnership, as compared with cohabitation. Couples who wish to have access to a regime providing financial relief on separation should, following this argument, be given the clear message that the only means of securing that is to marry or form a civil partnership. Those who do not wish to do that, but who wish to ensure legal protection in the event of separation, should be made to realise that they will have to create their own legal regime via private contract, trusts, wills, and so on. It goes without saying that there may be many other, very good reasons - quite unconnected with access to legal remedies - for wishing to encourage more couples to make the particular commitments entailed in marriage and civil partnership.

5.14

The introduction of civil partnership and the Living Together Campaign

^[6]

^[7]

^[8]

This initiative could usefully be accompanied by definitive clarification of the law relating to cohabitation contracts. As we have discussed, it seems highly improbable that a modern court would now decline to enforce such a contract (at least in so far as it related to the financial or property relationship between the parties and was otherwise binding under the law of contract).

^[9]

^[10]

Would such an initiative alleviate the problems in practice?

However, we are not convinced that, even with the benefit of information campaigns and the clarification of relevant contract law, this answer to the problems of cohabitants would pick up all or even most of the cases in which financial relief on separation might be considered appropriate and necessary. It takes two to marry, to form a civil partnership, or to agree on the terms of a contract.

5.17

For many couples, there is no problem. Some couples deliberately choose to cohabit rather than marry (or live singly) precisely because they each wish to retain their legal independence. Couples' freedom to choose the extent to which the law should be involved in their relationship deserves the law's respect, and we shall discuss the implications of these cases for the shape of any reform further below at paragraph 5.51.

5.18

However, in some other cases, it is less meaningful to talk in terms of a positive choice not to marry.

5.19

For example, one party may wish to marry but the other not be prepared to take that step, perhaps because he or she is unwilling to take on the legal commitment involved. The basic incentive structure created by the current law is such that marriage entails potential liability for the economically stronger party

Of course, this incentive structure could have the opposite effect on couples' decisions. The economically weaker party might insist on having the security that marriage provides and refuse to cohabit instead. The stronger party might then give way, on the basis that the potential advantages of marriage appeared to outweigh the risks of divorce occurring at all and the costs of providing financial relief if it did (against the alternative of no cohabitation, or even no relationship, at all). However, if the weaker partner is persuaded to settle for cohabitation (perhaps hoping that marriage will one day follow

^[15]

In other cases, the party wishing to marry may not even raise the question. Some may expect or trust their partner to do "the decent thing" in the event of breakdown, and may have received (legally unenforceable) assurances to that effect.

^[16]

^[17]

In some cases, one party may be unable to marry his or her cohabiting partner, even if wishing to do so, because he or she is still technically married to someone else. Divorce is now available unilaterally and without proof of fault after five years' separation, but some people may not instigate divorce despite being permanently separated, for example owing to the religious conviction of their spouse.

^[18]

Other couples may agree in principle that marriage or a cohabitation contract would be a good idea, but sheer inertia, or the need to act on perceived higher priorities,

^[19]

The number who actually enter into a contract is likely to be considerably smaller than those who are willing to contemplate one in theory: first, both parties must agree in theory that a contract is a good idea, secondly, they must agree on what the terms of the contract are to be, and thirdly, they must actually get round to entering into such a contract. The failure of couples thus to regulate their lives is well documented.^[20]

People are not uniformly blind to the risks that may be involved in family life. Some people may be motivated to secure legal protection through marriage or contractual arrangement, however "unromantic" it may seem to be to marry or contract in order to ensure a degree of financial security in the event of separation.

5.25

But it is not realistic to expect that contract alone would in practice provide protection where it is needed. Cohabitants are currently slow to take proactive steps to protect themselves and their partners by way of wills, contracts and so on,

^[21]

^[22]

Moreover, recent research in this jurisdiction suggests that many people's behaviour in relationships is determined significantly by factors other than legal and financial considerations.

^[23]

^[24]

^[25]

This sort of behaviour may be particularly prevalent in relation to the potential consequences of separation. Cohabitants may be aware of high divorce and separation rates and the likely impact on them of separation unless they take particular protective action in advance (whether by marrying or by drafting an agreement). But people may not act on that information by taking appropriate steps to acquire legal protection because they do not think that their relationship will end.

^[26]

^[27]

Many couples, for all sorts of reasons, may therefore fail to sign-up for legal protection, even if it is in their best long-term interests to do so. If actively "opting in" (to marriage, civil partnership, or contractual arrangements) is the only way to acquire legal protection, failure to take that step will leave, and does leave, individuals potentially exposed to what many regard as unfair financial outcomes in the event of relationship breakdown. Whether failure to opt in arises because of the reluctance of one party to take that step, or because of the reticence of the one who would like to marry or have a contract, but does not want to risk jeopardising the relationship by raising the issue, or simply because of mutual trust, it might be considered too harsh to deny all legal protection to the economically weaker party in the event of separation. Even if the failure to take that step were due to inertia, or a lack of proper appreciation of the legal significance of not taking that step, the harshness of the result in some cases could be regarded as a wholly disproportionate sanction for that inactivity.

5.29

These arguments may go some way to support the case for providing some measure of financial relief on separation or death between couples who do not marry or form a civil partnership. However, it is important to emphasise that they do not by any means require that such cohabitants should be subjected to the same legal regime as those who have done so. It may still be quite proper to conclude that particular legal consequences and remedies ought to be reserved for those who have made that specific legal commitment.

Promoting stable relationships; dealing with relationship breakdown

5.30

Many argue that couples should be encouraged to marry in order to achieve more stable relationships. We applaud those initiatives designed to support stable family relationships and to encourage an understanding of marriage as a serious, lifelong commitment, and not just a wedding. Ultimately, the best outcome for all parties concerned, adult and children, is for families to stay together and happy.

5.31

However, it will, sadly, always be the case that some relationships - whether marital or cohabiting - will fail, and financial hardship may consequently arise. It is that lack of stability in relationships, leading to separation, and the financial hardship that may be experienced as a result, which is precisely the problem that financial relief would be designed to deal with.

5.32

The financial relief available between spouses and civil partners when their relationships end may be felt to be justified in part, at least, by the legal commitment that the parties made to each other at the outset of their now-failed relationship. But the financial relief provided in those cases is, in large part, designed to alleviate the financial hardship that some divorcing spouses and their children would otherwise encounter were their property to be divided on divorce in accordance with their rights under the general law. It is not an "award" for having been married (no spouse has a right to a fixed share of any property on divorce), and the law has long since ceased to use financial relief on divorce as a way of penalising the party found to be to blame for the marriage's demise (other than in very exceptional cases).

^[28]

The legal status of a couple's relationship does not affect the nature and extent of the practical economic difficulties that might be encountered by one or both parties on separation. Whether married or not, the practical problems are largely the same and so the need for remedies (of some sort) is the same. As we shall discuss in Part 6, the particular remedies available between spouses and cohabitants might justifiably be different. But the fact that the parties did not formalise their relationship in marriage or civil partnership at the outset may not provide a sufficiently strong reason to deny the casualties of a failed cohabiting relationship access to any measure of financial relief.

^[29]

Finally, it is worth considering how promotion of marriage can best be achieved. We agree that marriage is an important social institution. But it can be argued that the objective of promoting marriage does not require us to deny any remedy to individuals experiencing financial hardship at the end of a cohabiting relationship. The institution of marriage, and individual marriages, can be supported without perpetuating the hardship experienced by such individuals.

^[30]

Would reforming the law applying to cohabitants discourage marriage?

If cohabitants' problems cannot effectively be solved by encouraging them to marry, we need also to consider the concerns of those who might argue that providing financial relief for cohabitants would undermine the institution of marriage, on the basis that the provision of that benefit outside marriage (and civil partnership) might discourage couples from making that specific legal commitment when they would otherwise have done so.

^[31]

Debates about family policy often focus on how the provision or withholding of certain legal rights or duties and financial benefits or penalties might affect people's decisions about their relationships. Yet endeavouring to predict the impact of law and legal change on behaviour in intimate family relationships is an exercise fraught with difficulty. As we noted above, people do not always behave as we might expect or wish them to, given the incentive structure created by the legal framework within which we imagine that they make their decisions.

^[32]

In considering this question here it is important to bear in mind the relatively limited scope of the present project and the nature of the legal remedies under consideration. We are not dealing with tax and social security law,

^[33]

^[34]

The introduction of remedies between cohabitants would not straightforwardly encourage or discourage marriage or cohabitation, in the way that, for example, providing a particular tax relief to spouses might be hoped to encourage marriage. The tax exemption might benefit both members of the couple equally,

^[35]

^[36]

We have already considered how the current law's provision of financial relief at the end of marriage, but not at the end of cohabitation, might affect couples' negotiations about marriage. The introduction of financial relief between separating cohabitants would clearly alter this incentive structure. But it remains difficult to predict how this might affect decision-making about and within relationships, even assuming accurate knowledge and understanding of the law. The availability of some protection for cohabitation might incline the economically weaker party to accept cohabitation rather than insist on marriage. However, depending on the relative generosity of the remedies provided on the separation of cohabitants and on divorce, marriage is likely to remain the potentially more costly option for the economically stronger party and the preferable option for the other party. Cohabitation would, though, no longer necessarily be "free" for the economically stronger party, as it would entail a potential new legal responsibility where none had previously existed, which might reduce that party's current incentive to refuse to marry.

5.40

Finally, however, we must return to the important point made at paragraph 5.26. A change in the law regarding the financial consequences of separation would be unlikely to play any greater role in individuals' decision-making about their personal relationships than the current law does.

^[37]

^[38]

^[39]

IS THERE ANY JUSTIFICATION FOR A NEW SCHEME FOR "COHABITANTS"?

If the promotion of marriage and civil partnership, and self-regulation, are not an adequate answer to the problem of cohabitation, we need instead to explore possible justifications for the introduction of a legal regime for cohabitants. This takes us into new territory. As we noted in the introduction to this Part, we are dealing here with individuals who have not satisfied any of the justifying triggers for legal intervention currently recognised either by the general law (of trusts, estoppel and contract) or by marriage and civil partnership law. Equity will not ordinarily "assist a volunteer" or enforce gratuitous promises, and for good reason. We need therefore to identify a characteristic exhibited by some or all cohabiting relationships, or some other trigger, which can provide a sound conceptual basis for encroaching on the parties' ordinary property rights in the event of relationship breakdown. A new scheme could accordingly take various forms, which we explore in the following paragraphs.

Creation of a new opt-in scheme?

5.42

One option would be to create a scheme under which couples could opt in to a new set of remedies which would only be available to those who have by some positive, formal act consented to be subjected to that scheme, perhaps by way of registration. This would provide a clear basis for intervention, arising from the parties' choice to bring their relationship within the scheme.

5.43

Opt-in schemes - which we shall refer to here as "registered partnerships" - have been introduced in several European states and elsewhere.

In some jurisdictions, registered partnership offers all, or almost all, of the same rights and responsibilities as marriage.

^[45]

^[46]

A registration scheme giving rise to wide-ranging consequences might be expected to have a somewhat higher take-up rate than one which simply provided access to financial relief on separation and death, and nothing more (as any new opt-in scheme would be). But in fact, take-up for these schemes, even where open to both opposite-sex and same-sex couples, is generally low.

^[47]

"Opt-in" solutions would be favoured by those who wish to protect the autonomy of cohabitants who, it is said, should be free to choose how they wish the law to regulate their relationships. It is said that cohabitants have deliberately rejected marriage, and their property relations should only be subjected to special regulation in so far as both parties have positively elected to bring their relationship within some other legal scheme, or reached a private agreement regarding their property. By requiring agreement, no one can be subjected to legal regulation against his or her wishes.

^[48]

An opt-in approach would provide ample protection of cohabitants' autonomy: the exercise of the parties' autonomy in opting in at the outset would provide the basis for the remedy provided at the end of the relationship. However, it would do nothing at all for the cases we have described from paragraph 5.18 above where the choice to opt in would not meaningfully be available. Nor would it offer any protection to those who do not advert to the legal consequences of their relationship status. Under an opt-in scheme, the default position would be no different from that which exists under the current law. If couples do not marry or form a civil partnership, they are left to the current law described in Part 3 and the criticisms of it outlined in Part 4. That would continue to be the case for those couples who did not opt in to a new scheme.

5.48

It seems to us that creating a new opt-in scheme would not be the best way forward. English law already provides two opt-in schemes for intimate relationships. Opposite-sex couples may marry. Same-sex couples may register a civil partnership. At the very least, introducing yet another form of opt-in status may be felt unduly to complicate our family law.

5.49

If we exclude the possibility of creating any new opt-in regime, then any opt-in solution effectively entails marriage and civil partnership, or private regulation through contract. We have already explained why this may not be considered a satisfactory solution to the problems experienced by individual cohabitants whose relationships end, and why some reform for cohabitants, as such, may therefore be necessary.

An "opt-out" scheme?

5.50

The alternative is a scheme which would apply automatically to all those relationships which satisfied statutorily prescribed eligibility requirements.

^[49]

But it would also be possible, and important, to protect the autonomy of those who did not wish to be subject to any new law by providing a mechanism for couples who wished to do so to opt-out of the scheme by agreement.

^[50]

^[51]

^[52]

The entitlement of couples to opt out ought therefore to form a central part of any reform. The right to opt out would have to be subject to safeguards to ensure that it was not used by one party to exploit the financial or other weakness of their partner. We discuss the design of arrangements for parties to exercise the right to opt out in Part 10, in particular the question of what formalities should be required for such agreements to be binding and what circumstances or events might vitiate them. Moreover, careful consideration would have to be given to the impact of any new scheme on relationships already in existence when the scheme is implemented. We consider the extent to which any new scheme should have retrospective effect, and the implications that would have for the meaningful exercise of a right to opt out in Part 11.

5.53

In our view, a scheme that applied by default to eligible cohabitants, subject to a right to opt out, would create an appropriate balance between affording scope for party autonomy and securing fairer outcomes for individuals at the end of cohabiting relationships. It would mean that inactivity would not, as it currently does, leave the more vulnerable party unprotected at the point of separation: the scheme would apply by default in the absence of a valid opt-out agreement.

^[53]

Many other jurisdictions have adopted this approach, following the trend set in 1984 by New South Wales, the first jurisdiction to create a statutory scheme for financial relief between cohabitants. That pattern has been replicated across other jurisdictions, including the rest of Australia, most of the Canadian provinces, New Zealand, some parts of Spain, Sweden and, most recently, Scotland.

^[54]

^[55]

The default position, for those relationships falling within the scheme, would therefore be altered. In the absence of positive agreement between the parties, the scheme would apply, so parties would not longer be reliant on the general law on separation. If they reached an agreement to exclude themselves from the ambit of the scheme and/or to make alternative provision for each other in the event of separation by contract and so on, the scheme would not apply.

5.56

Although the scheme would apply automatically to all relationships satisfying the eligibility criteria, that simply means that either party would be entitled to apply for financial relief. It would not be necessary for any court application to be made if parties were able to reach their own settlement on separation (although they might wish to obtain a consent order). The new scheme would provide a new background of legal claims, different from that provided by the current law, in light of which parties could make their own arrangements. Moreover, since the success of any claim would depend upon the applicant being able to demonstrate that relief were warranted under the relevant substantive principles (discussed in Part 6), the right to apply would not mean a right to relief.

To whom ought any opt-out scheme apply?

5.57

Before we proceed any further, it is necessary to consider in broad terms what types of relationship could justifiably be brought within the scope of a new opt-out scheme. If the parties were not required proactively to opt in, we would still need to identify a justification for legal intervention where none currently exists.

The diversity of "cohabitation"

5.58

Our terms of reference require us to consider the law as it applies to "cohabiting couples". As we saw in Part 2, "cohabitation" covers a wide range of relationships. Cohabitants as a class share the feature of a common household,

^[56]

Some commentators who oppose the legal recognition of cohabitants have pointed to what they regard as the lack of commitment necessarily exhibited by cohabitants' failure to marry.

^[57]

^[58]

Studies have found various levels of commitment amongst cohabiting couples, and amongst spouses.

^[59]

^[60]

Those couples who exhibit full mutual commitment parties expect their relationship to last and regard themselves as being "as good as married".

^[61]

^[62]

Such couples are perhaps likely to make greater investments in their cohabiting relationships or make greater sacrifices for them than they might have done in shorter or more contingent relationships, particularly if they become parents. Indeed, such couples may be indistinguishable from spouses in the way that they organise and view their domestic and working lives on a day-to-day basis.

^[63]

Where the couple's commitment is more "contingent", one or both parties currently view cohabitation as the best option, and may be committed at least in the sense that they expect fidelity from their partner during the relationship, but there is no presumption (yet) that the relationship will last.

^[64]

^[65]

Determining which cohabiting relationships should be eligible for any new scheme

We do not think that the mere fact of cohabitation by itself is enough to justify giving parties to such relationships access to any level of financial relief on relationship breakdown or death, whatever the substantive basis of those remedies were to be. If reform for cohabitants is to be introduced, we therefore need to identify some additional feature or features of some cohabiting relationships which can provide the necessary justification for intervention, and which can be encapsulated in a test capable of adjudication by the courts.

^[66]

COHABITANTS WITH CHILDREN^[67]

We consider that joint parenthood, in combination with cohabitation, provides a strong and sufficient justification for eligibility to apply for some measure of financial relief in the event of separation. Parenthood is a joint endeavour with implications both for the parents and their children of a sort that engage quite distinctive public interest considerations in the unhappy event of those parents separating.

5.66

As one commentator has put it:

Characteristically, the "partnership of parenthood" is a life-transforming event, certainly for one, and often for both, parents. The parties are not simply acting altruistically with respect to each other,^[68] but acquiring a joint commitment to a new human being who demands care and support for a significant proportion of the adults' lives. The presence of a child in a common household demands a life plan [in which the parties have arranged their mode of living and financial arrangements as a basis upon which they followed their common life together for the long-term, in which the parties support each other and use mutual resources (effort, money) in servicing a long-term project]. Such a plan could also be reasonably presumed even if the child they were bringing up was not the child of both of them, for its presence is surely part of the plan.^[69]

In that writer's view, it is the existence of such a life-plan which justifies eligibility for financial relief providing, in particular, compensation for economic sacrifices made for the sake of that relationship.

Another commentator puts the point in these terms:

We are entitled to treat [the relationship between cohabiting parents] as a socio-economic partnership with wealth-transferring consequences whether or not this was their intention, and whether or not they made a commitment to partnership, because parenthood has effected a change in their relationship which requires limitations to be placed upon their assertion of individualised financial autonomy … The partnership of parenthood continues to some extent after separation. The parents have shared responsibility to a child and therefore the parent who does not have primary care responsibility has certain financial obligations to the primary caregiver which survive the dissolution of their relationship. … If [one party] is the primary caregiver to the child of their relationship after separation, [the other] has a responsibility to support [the primary carer] … because they have chosen together to become parents... .^[70]

Inevitably, creating a category of "cohabitants with children" involves difficult questions around the edges: should we include couples who raise a child of only one of them together; what if they only cohabit for a short period, or if cohabitation ceases prior to the child's birth?

^[71]

However, while those questions would have to be addressed in devising the detail of the scheme, we believe that the core idea - that cohabitation plus parenthood should bring a couple within the scope of any new opt-out scheme - is one that is likely to command wide support. Indeed, researchers investigating public views on law reform consistently find that there is very strong support for the provision of some sort of financial remedy between the adults on separation where a couple have children.

^[72]

Remedies are important for primary carers in their own right because of the economic sacrifices made by them. However, there is another reason why we believe consultees may consider cohabitants with children as particularly deserving of attention. Where there are children, there is a recognisable public interest in their continuing welfare. Separation of a cohabiting couple inevitably impacts on those children who have been part of their parents' shared household. As Part 4 explained, although Schedule 1 to the Children Act 1989 seeks to protect children whether or not their parents were married, it has important practical limitations. More generally, we have argued that the current law fails to address adequately any financial hardship experienced by the primary carer on separation. This must inevitably affect the quality of life of the children for whom that adult party continues to care.

5.71

But we do not think that remedies should be limited to cohabitants whose children are still dependent at the date of separation. The nature of the economic sacrifices made by some primary carers as a result of child-care obligations is such that the impact of those sacrifices is likely to be felt even after the children have attained their independence. Justice between the adult parties requires that relief be available even once the children have left home. The parent who has devoted his or her efforts to raising the couple's family over many years and sustained long-term economic disadvantage as a result ought not to be left without remedy in the event of separation.

5.72

Some commentators would urge an enlarged role for the welfare state to assist individuals in these cases, to avoid creating private dependency.

^[73]

^[74]

There is a strong case, therefore, for the creation of specific family law remedies which will tackle that problem directly. Family law remedies could provide much more convenient, flexible responses than the general law described in Part 3 to, in light of the particular needs of the parties and all of their available assets and income.

COHABITANTS WITHOUT CHILDREN

5.74

We consider the case of cohabitants without children to be rather more difficult. Such couples do already have access to statutory remedies when their relationship ends by death, either where the relationship had lasted for at least two years immediately prior to the death, or where the survivor was dependent on the deceased.

^[75]

It has been argued that, in many respects, cohabitants without children are indistinguishable from other home-sharers, who are excluded from the terms of reference of the current project.

^[76]

We express no view on the merits of these arguments. But whether or not cohabitants without children are distinguishable from other cases is not the question for us here. What matters is whether any couples without children should be included in a new scheme for financial relief.

5.77

Various arguments could be made against reform for cohabitants without children. In the absence of children and the specific problems (both for those children and their parents) experienced in those cases, there might be felt to be nothing sufficiently compelling about cases of cohabitants without children to justify their inclusion, and that the potential costs of doing so might outweigh any potential benefits of doing so. Such couples might be felt to lack the implied commitment which does or should arise by virtue of having a child together, and to lack the special needs peculiar to cases involving children (at least where the children are still dependent). Those taking this view might say that cohabitants without children ought to be expected to look after their own interests and not be permitted to look to the law to rescue them from decisions and actions which may, with the benefit of hindsight, appear unwise.

5.78

It would clearly be undesirable, in creating a statutory scheme specifically for cohabitants, to encourage litigation or provide remedies in cases where no significant economic injustice in fact arises under the current law. Many cohabitants without children are young couples who live together for a year or two on a more or less trial basis, often in rented property, and then go their separate ways. In most of those cases, it is likely that neither party's economic position will have been affected (positively or negatively) as a result of that short cohabitation. If either party has gained economically from the relationship (for example, thanks to the other party's contribution to the mortgage), the general law may provide a remedy to share that gain.

^[77]

Imagine a young couple, C1 and C2, who are both working and live together in property acquired by C1 before the relationship began. C1 pays the mortgage while C2 pays other bills. They split up after a year. Or imagine another couple who have been carrying on a long-distance relationship, and one party, C3, forces the pace by deciding to give up a job to move across the country to move in with the other, C4, who is rather less keen but does not refuse to give C3 house-space. They split up a year later, C3 having struggled to find a good job, C4 having supported both economically.

^[78]

^[79]

People frequently make ill-advised economic decisions, whether by failing to make the most of what resources they have (C2 would have done better to invest in property too) or sacrificing resources for what turns out to be an elusive benefit (C3 ought not to have given up the job). Sometimes they do this in the context of intimate relationships, sometimes in other contexts. It may not be immediately apparent why the existence of the cohabiting relationship should make the difference which justifies the unlucky or unwise individual seeking recompense from another individual.

^[80]

However, there may be at least some cases involving couples without children where the case for providing the possibility of financial relief is rather stronger. Consultees may consider that the interdependence which flows from an intimate cohabiting relationship is in some cases enough to justify access to flexible remedies in the event of termination of the relationship, even where there are no children.

5.82

At least where the relationship has lasted for some time and has ended leaving one party suffering financial hardship as a result, there may be a strong basis for saying that some measure of financial relief on separation would be appropriate. Where the parties are in a relationship which they regard as long-term, they may have merged their assets and become financially interdependent

^[81]

^[82]

Some commentators argue the case for reform from the perspective of the functional similarity of some cohabiting relationships with marriages, not distinguishing between those who have children and those who do not: if they are "as good as married", ought they not to be subject to the same laws on relationship breakdown?

^[83]

Another commentator frames the issue differently:

^[84]

Assuming a world where the public misconceptions about cohabitation had somehow been eliminated, so that people would eschew marriage with a clear knowledge of the risks from a legal point of view but with their instinct for economic self-preservation dulled by normal human optimism, could the law fairly leave them to the consequences of their decision? While different views are obviously possible on this point, it can certainly be argued that sufficient grounds for legislative reform would still exist in this scenario. However, these grounds would not rest directly on the premise that cohabitation was practically indistinguishable from marriage. Rather, the grounds for legislative intervention would be the state's interest in avoiding injustice upon the termination of a relationship where the parties were economically and emotionally interdependent and relied on the relationship rather than their separate legal entitlements to secure their financial well-being.^[85]

We shall consider in Part 9 the various ways in which cohabiting relationships can and have been defined for legal purposes. Settling on a definition which itself captures the sort of mutuality that might be thought necessary to justify any relief between couples without children is difficult. Ultimately, the best, if slightly crude, way of distinguishing between those relationships that do and do not exhibit the required level of sharing would be to impose a minimum duration requirement for cohabitants without children, so that short relationships were simply excluded from eligibility entirely. As we shall see in Part 6, the remedies that we have in mind are "self-limiting", that is to say they would not involve the automatic sharing of assets for those falling within the scheme, but rather a focused response to specific economic injustices arising on separation. But an additional limitation, such as a minimum duration requirement for couples without children, may also be desirable.

5.86

Again, this is an idea that resonates with findings from surveys of public opinion and small-scale qualitative studies of public attitudes towards reform. As well as the presence of children, respondents regard length of relationship and degree of financial interdependence as factors relevant to whether a relationship should be brought within the scope of special legal protection in this area. Conversely, some respondents to questions about childless couples wish to exclude short relationships from the scope of reform, and are concerned about preserving the autonomy of those cohabitants who have positively elected not to marry and who wish to keep their relationship free from legal obligations.

^[86]

Conclusions and questions on the broad scope of any new scheme

We are confident that reform should apply to cohabitants with children, at least where the parties are joint parents, and that remedies should be available if separation occurs after the children have left home, as well as where they remain dependent. We shall be seeking consultees' views about other situations involving children (such as step-child cases) in later Parts of this paper.

^[87]

Cohabitants without children raise more difficult questions of social policy, in relation to which the arguments may be considered to be more finely balanced than in cases of cohabitants with children. We therefore invite the views of consultees on whether any categories of cohabitants without children ought to be included within a new scheme of financial relief on separation. Consultees may take the view that such couples should only fall within the scope of a new scheme if their relationship has lasted a specified minimum duration. Views may, of course, vary markedly as to how long any such period should be and on what basis it should be fixed. We shall discuss this issue in detail in Part 9.

WHAT COULD STATUTORY REFORM OFFER?

5.89

Specifically-devised family law remedies for financial relief on separation could:

(1) ensure proper recognition of the parties' financial and non-financial contributions (not just to the acquisition of particular assets but to their joint lives more generally) and the economic sacrifices they may have involved;

(2) avoid arbitrary distinctions and lengthy investigation into facts of, at best, marginal relevance to the reality of family life;

(3) provide flexible remedies without jeopardising the interests of third parties;

(4) provide a clearer, more legitimate basis for the courts' determination of what fairness demands in any given case; and

(5) be considered in family, rather than civil, proceedings.

For whom might reform make a difference in practice?

5.90

It is proper to acknowledge there are several categories of case for which any reform of remedies on separation would have little impact and perhaps, currently at least, a relatively narrow range of cases which would benefit substantially from any new private law remedies.

Cases which would be unlikely to be affected

PRE-MARITAL COHABITANTS

5.91

Many cohabitants marry each other. Having married, they are eligible for the existing remedies applying on divorce or death of one spouse and so are not the concern of this project.

^[88]

ECONOMICALLY INDEPENDENT COHABITANTS

Many couples are both in full-time employment and remain economically independent of each other, contributing more or less equally to housing and household running costs. A large number of these couples will be young and childless, and many such relationships will be of relatively short duration. Many of these younger couples may rent rather than own their homes. On breakdown of such relationships, it is usually possible to separate with comparative financial ease and the general law may usually be expected to produce appropriate outcomes in case of dispute.

5.93

If they rented their home, the parties can simply go their separate ways. If the parties had bought their home together, they will now probably have an express trust, which will significantly simplify matters on separation. Even if they do not have an express trust, they may well have contributed equally to the mortgage, in which case again the case might be straightforward. There is little need for reform in these cases in the sense that different outcomes from those generated by the general law are not evidently required. Indeed, as we shall see, whilst the different options for reform might provide a clearer route to the result, they would be unlikely to produce significantly different outcomes in these circumstances. If just one of them held the legal title to the home, the current law may be less adequate and reform may have an impact. But as we have discussed, certainly if the relationship is short and no children have been born to the couple, there is an argument that such cases ought not to be included in the scope of a new scheme.

COHABITANTS WITH FEW ASSETS AND LOW HOUSEHOLD INCOMES ^[89]

Many cohabitants (including, in particular, many cohabiting parents) have few assets, rent their home and have low incomes. The existing remedies of tenancy transfer and child support probably already achieve all that can be achieved in such cases.

^[90]

^[91]

This is simply a reflection of the fact that the capacity of private law to provide a remedy is inherently limited by the scale of the parties' assets. Making some form of financial relief available on separation could therefore not eliminate financial hardship. Much of the financial hardship experienced by former cohabitants and their children will therefore have to be addressed by other means. Research into outcomes on divorce, where the remedies are in theory far more extensive, indicates that even in that context many primary carers still experience financial hardship.

^[92]

^[93]

^[94]

Of course, there remains a role for private law nevertheless to ensure that where resources permit, those resources there are can be more fairly shared between the parties.

Cases likely to be affected

5.97

The cases to which any reform of private law could make a significant difference are those involving couples whose home is owner-occupied, whose joint household income is substantially above subsistence level, and who are to some extent financially interdependent. Cases most likely to be affected involve couples with children, given the substantive economic implications of parenthood for both parties. Only a minority of cohabiting couples may currently fall into this category. But a significant number of individuals and, indirectly, their children might benefit from reform of the sort discussed in this paper.

CAN WE NOT LEAVE IT TO THE JUDGES?

5.98

Before we conclude this Part, it is appropriate to explain why we consider that any reform should be effected by Parliament, rather than by reliance on judicial development of the existing law.

5.99

It might be argued that there remains scope for the judges to develop the general law of trusts and estoppel, perhaps drawing from the work of their Commonwealth colleagues,

^[95]

However, there is a risk of the general law becoming destabilised by such activities, and the exercise raises fundamental questions about the legitimacy of this sort of judicial development.

The courts have always been sensitive to the limits on what they can legitimately do in this area and have highlighted the necessity for legislative intervention to cure the claimed unfairness of the outcomes generated by the general law.

^[101]

^[102]

THE COST OF REFORM?

One other issue that we identified at the start of this Part is the implications in terms of costs, together with the practical impact, of any reform. Some consultees may be concerned that any new scheme could give rise to a large number of complicated claims, flooding the courts at a great cost to the taxpayer. We do not think that a new scheme would have to be costly or burdensome in that way. Moreover, it cannot be ignored that the current law creates costs of its own. Litigation about constructive trusts and proprietary estoppel are extremely complicated. Cases take up significant amounts of court time and some litigants are currently funded by legal aid.

5.103

The extent to which a new scheme would give rise to claims would depend entirely on its scope. A new scheme could be set up so as to screen out trivial or malicious claims and only provide remedies where they were really needed.

^[103]

^[104]

CONCLUSIONS

The current law

The general law is not designed specifically to deal with the problems peculiar to the termination of close inter-personal relationships and has struggled to develop in a way that would better accommodate those problems, in particular the economic sacrifices associated with child care. Property law may never respond adequately to the demands of the family context. It is not designed to do so. Much of the substantive uncertainty that currently affects the law used by cohabitants could be said to have stemmed from judicial attempts to stretch the general law to fit the circumstances of cohabitants, because there is no law designed specifically to deal with them.

5.105

One result of the current uncertainty is that it is difficult for legal advisers to give clear advice and disputes are costly to litigate. While that might encourage some cases to settle, it may do so particularly where one party is risk averse, leaving that party with an inadequate settlement.

5.106

What statutory remedies currently exist between cohabitants have been developed in an ad hoc manner, not as a coherent overall scheme, and do not go far enough to achieve just outcomes on separation. While survivors of cohabiting relationships terminated by death have access to a remedy under 1975 Act, statutory remedies designed to protect the economically weaker adult party on separation are limited. Very few of the laws that can be invoked are directed specifically to achieving a fair outcome between the adult parties at the end of a relationship, and none of them provides a comprehensive overview of the parties' economic positions. Schedule 1 of the Children Act 1989, aimed exclusively at meeting the child's needs, offers nothing directly to the parent who, ill-served by the law of trusts, is left in the economically weaker position at the end of a cohabiting relationship. As we have seen, the practical limitations on the use of Schedule 1 may be reducing its ability to protect the interests of children. Moreover, that legislation does not provide for the cohabiting parent whose children have left home.

Is reform justified?

5.107

Ultimately, it is for Government and Parliament to decide as a matter of social policy whether the introduction of financial relief for cohabitants on separation would be appropriate and, if so, for which categories of cohabitants.

5.108

We consider that in reaching that judgement, the goals of promoting and protecting marriage should be disentangled from the issue of ensuring that individuals do not suffer financial hardship unfairly when their relationships end, whatever the legal status of that relationship was.

5.109

We see considerable merit in urging cohabiting couples to regulate their own affairs and decide without state intervention how they would divide their assets in the event of separation. However, while that solution amply protects the autonomy of the parties, we do not consider for the reasons explained in this Part that it can provide an adequate answer to the problems of cohabiting couples who separate. Only a scheme of remedies applying by default to couples who meet eligibility criteria set out in the legislation could do that. We are aware that any scheme which applied by default to all cohabiting couples might be seen as curtailing the freedom of some. The right to opt out of such a scheme would, we believe, provide sufficient opportunity for those who do not wish to be subject to any new law to avoid it by agreement.

5.110

We do not think it would be appropriate for all cohabiting couples to be subject to such a default regime. Nor, as we explain in Part 6, do we think any new scheme should involve the provision of remedies on the basis of a wide discretion where significant economic injustice had not arisen. But we consider that there is likely to be a consensus in favour of some reform in cases involving cohabitants with children, and we invite the views of consultees regarding the desirability of extending reform to at least some categories of couples without children.

5.111

We provisionally reject the view that any new remedies providing financial relief on separation should attach to a new legal status to which cohabiting couples can "opt in" by registration. Do consultees agree?

5.112

We provisionally propose that any new statutory scheme providing financial relief on separation should be available only between "eligible cohabitants", unless the parties have agreed that neither shall apply for those remedies by way of an "opt-out agreement". Do consultees agree?

5.113

We consider that, in cases where the couple have children, the current law governing the resolution of cohabitants' financial and property disputes on separation is uncertain and capable of producing unfair outcomes, and that reform for this category of case is justified. We provisionally propose that new statutory remedies should be devised to deal with such cases. Do consultees agree?

5.114

We invite the views of consultees on whether reform may also be warranted in any cases involving cohabitants without children.

THE REMAINDER OF THIS CONSULTATION PAPER

5.115

We have been asked to consider how this area of the law could be reformed to avoid financial hardship for cohabitants and their children. For the rest of this paper, we therefore consider the types of new scheme that could be developed, and how it might apply to both couples with children and those without.

5.116

We consider the range of options for reform in terms of the substantive principles on which relief could be granted and set out our provisional preference. We then consider how such principles would apply in different types of case, and ask consultees what they think about the suggested outcomes. In doing so we emphasise that whether different categories of cohabitants, in particular cohabitants without children, should be included at all in any new scheme, and, if so, on what basis, remains an open question.

Ý
Ü Þ

Note 1    E Cooke, “Cohabitants, Common Intention and Contributions (again)” [2005] Conveyancer and Property Lawyer 555, at 561; see also J Dewar, “Land, Law, and the Family Home”, in S Bright and J Dewar (eds), Land Law: Themes and Perspectives (1998).    [Back]

Note 2    See in particular para 4.29.    [Back]

Note 3    There are several research projects currently underway which are due to report during the course of our work on this topic: see R Tennant, J Taylor and J Lewis, research for the Department for Constitutional Affairs into outcomes for cohabitants on separation; G Douglas, J Pearce and H Woodward, similar research; A Barlow and C Burgoyne, research for the Department for Constitutional Affairs assessing the impact of the Living Together Campaign, and research undertaken as part of the British Social Attitudes Survey 2006 investigating attitudes towards marriage and cohabitation, law and reform options.    [Back]

Note 4    86% of the engaged couples in one study claimed that legal considerations had not influenced their decision to marry: M Hibbs, C Barton and J Beswick, “Why marry? – Perceptions of the Affianced” (2001) 31 Family Law 197. See also J Haskey, “Cohabitational and marital histories of adults in Great Britain” (1999) 96 Population Trends 13, at 22, reporting findings from an ONS survey.    [Back]

Note 5    The British Social Attitudes Survey found that fewer than one in ten of the 57% of cohabitants who were owner-occupiers had a written agreement about their shares in the property and only 10% of current and former cohabitants had made or changed a will in consequence of their relationship. Overall, 90% of current and former cohabitants surveyed in 2000 had taken no legal action as a result of their cohabitation: A Barlow, S Duncan, G James and A Park, “Just a Piece of Paper? Marriage and Cohabitation”, in A Park, J Curtice, K Thomson, L Jarvis and C Bromley (eds), British Social Attitudes: Public policy, social ties. The 18th Report (2001) p 45. In some cases, the relationship may not have developed to a point at which either party felt such a step would be appropriate, but it seems likely that some were in a position where such action would have been sensible.     [Back]

Note 6    See http://www.advicenow.org.uk/go/livingtogether/index.html and http://www.oneplusone.org.uk/marriedornot/ (last visited 4 May 2006).    [Back]

Note 7    Over 800,000 documents were downloaded from the Advicenow website between August 2004 and February 2006. Of those, over 118,000 visitors downloaded the “living together agreement” materials; over 547,000 downloaded the breaking-up checklist.    [Back]

Note 8    By Professor Anne Barlow and Dr Carol Burgoyne, University of Exeter.    [Back]

Note 9    See para 3.18.    [Back]

Note 10    See the Cohabitation (Contract Enforcement) Bill introduced by Mrs T Gorman MP in 1991 under the ten-minute rule.    [Back]

Note 11    At the outset of the relationship, it may not be clear who the potentially stronger party would be. However, relative economic imbalance is most likely to arise where the parties become parents and one of them incurs greater loss of earning capacity or loss of earnings as a result. While the identity of this party may not be certain at the inception of a relationship, female partners in opposite-sex relationships are more likely to assume primary responsibility for child-care. Some research indicates that having a child is viewed as particularly creating an economic risk for the woman: M Maclean and J Eekelaar, “Taking the plunge: perceptions of risk-taking associated with formal and informal partner relationships” (2005) 17 Child and Family Law Quarterly 247, at 257; J Lewis, “Perceptions of Risk in Intimate Relationships: the implications for social provision” (2005) 35 Journal of Social Policy 39. See also J Ermisch, Personal Relationships and Marriage Expectations (2000) Working Papers of the Institute of Social and Economic Research: Paper 2000-27, University of Essex, on the advantages and disadvantages perceived by cohabitants from cohabitation rather than marriage.    [Back]

Note 12    See paragraph 5.25 below.    [Back]

Note 13    One Canadian Supreme Court judge has said “many…cohabitants cohabit not out of choice but out of necessity. For many, choice is denied them by virtue of the wishes of the other partner. To deny them a remedy because the other party chose to avoid certain consequences creates a situation of exploitation. It certainly does not enhance the dignity of those who could not “choose” to cohabit”: Attorney General of Nova Scotia v Walsh [2002] 4 SCR 325, at [171], per Heureux-Dubé J.    [Back]

Note 14    B Hale, “Unmarried Couples and Family Law” (2004) 34 Family Law 419, at 422; A Barlow, S Duncan, G James, and A Park, Cohabitation, Marriage and the Law (2005) p 109. Compare R Deech, “The Case Against Legal Recognition of Cohabitation” (1980) 29 International and Comparative Law Quarterly 480, at 497.     [Back]

Note 15    Though some mothers with low incomes may cohabit in preference to lone parenthood or “shot-gun” marriage to a partner whose reliability and economic strength is doubtful: C Smart and P Stevens, Cohabitation Breakdown (2000).    [Back]

Note 16    See the limits of what estoppel will respond to: para 3.35. See also the facts of Oxley v Hiscock [2004] EWCA Civ 546, [2005] Fam 211, at [9]: Mrs Oxley had been given very clear advice about the importance of making an express declaration of trust, but said “I am quite satisfied with the present arrangements, and feel I know Mr Hiscock well enough not to need written legal protection in this matter”.    [Back]

Note 17    See views of respondents interviewed by A Barlow, S Duncan, G James and A Park, Cohabitation, Marriage and the Law (2005) p 43.    [Back]

Note 18    See for example Watson v Lucas [1980] 1 WLR 1493. We consider how any new scheme ought to deal with such “concurrent” relationships at paras 9.138 to 9.161.    [Back]

Note 19    Particularly if the couple thinks that marriage is only worthwhile if it can be done “properly”, that is to say, with an expensive wedding: see n 62 below.    [Back]

Note 20    R Probert, “Sutton v Mischon de Reya and Gawor & Co – Cohabitation contracts and Swedish sex slaves” (2004) 16 Child and Family Law Quarterly 453, at 462.    [Back]

Note 21    See n 5 above.    [Back]

Note 22    See, for example, the findings of J Lewis, J Datta and S Sarre, Individualism and commitment in marriage and cohabitation (1999) Lord Chancellor’s Department Research Series No 8/99, pp 78-81.    [Back]

Note 23    See for example, J Eekelaar and M Maclean, “Marriage and the Moral Bases of Personal Relationship” (2004) 31 Journal of Law and Society 510; A Carling, S Duncan and R Edwards (eds), Analysing Families: morality and rationality in policy and practice (2002); C Smart and P Stevens, Cohabitation Breakdown (2000) p 50; J Lewis, “Marriage, Cohabitation and the Law: Individualism and Obligation” and J Lewis, J Datta and S Sarre, “Individualism and Commitment in Marriage and Cohabitation” (1999) Lord Chancellor’s Department Research Series Nos 1/99 and 8/99; K Kiernan, H Land and J Lewis, Lone Motherhood in Twentieth Century Britain (1998) p 11; F McAllister, “Effects of Changing Material Circumstances on the Incidence of Marital Breakdown” in J Simons (ed), High Divorce Rates: the State of the Evidence on Reasons and Remedies (1999) Lord Chancellor’s Department Research Series No 2/99 (vol 1).    [Back]

Note 24    See sources referred to in n 68 of Part 2 on the influence of socio-economic status on marriage, cohabitation, parenthood, separation and divorce.    [Back]

Note 25    A Barlow and S Duncan, “New Labour’s communitarianism, supporting families and the ‘rationality mistake’: Part II” (2000) 22 Journal of Social Welfare and Family Law 129.    [Back]

Note 26    J Lewis, “Perceptions of Risk in Intimate Relationships: the implications for social provision” (2005) 35 Journal of Social Policy 39, at 46, though the respondents in this survey, whether married or cohabiting, had sought to protect themselves by retaining as much financial independence within their relationships as possible.    [Back]

Note 27    Of course, another reason for the unpopularity of pre-nuptial agreements currently may be that they are not legally enforceable, but it seems that many would remain unenthusiastic about such agreements even if they were binding, as being rather an “unromantic” way to embark on married life: see J Lewis, J Datta and S Sarre, Individualism and commitment in marriage and cohabitation (1999) Lord Chancellor’s Department Research Series No 8/99, pp 78-81.    [Back]

Note 28    Since the introduction of no-fault divorce by the Divorce Reform Act 1969 and ancillary relief by the Matrimonial Proceedings and Property Act 1970. (See now the Matrimonial Causes Act 1973.) Though see Miller v Miller [2005] EWCA Civ 984, [2006] 1 FLR 151, heard on appeal in the House of Lords in February 2006, concerning the relevance of conduct to ancillary relief.     [Back]

Note 29    See the “functional” case for reform made, for example, by A Barlow, S Duncan, G James and A Park, Cohabitation, Marriage and the Law (2005) pp 102-106.    [Back]

Note 30    See the view of the former President of the Family Division, Dame Elizabeth Butler-Sloss, “Family Law Reform – opportunities taken, wasted and yet to be seized”, Bar Council Lecture (December 2005).    [Back]

Note 31    See generally, for example, P Morgan, Marriage-Lite: the Rise of Cohabitation and its Consequences (2000). We do not propose to deal with the more general question about whether marriage has been undermined by the withdrawal of various benefits exclusive to marriage, such as the married person’s tax allowance. We are concerned only with the provision of financial relief between cohabitants on separation and death. For a general response to the wider issue, see, for example, J Lewis, The End of Marriage? (2001) and M Maclean and J Eekelaar, The Parental Obligation (1997) p 143.    [Back]

Note 32    See sources cited at n 23.     [Back]

Note 33    In the case of means-tested benefits, of course, legal recognition of cohabitation (by way of the aggregation rule) works to the disadvantage of the couple, but in a way that gives them no incentive to cohabit in preference to marrying.     [Back]

Note 34    We are not addressing issues such as the reservation of the inheritance tax exemption to spouses and civil partners.     [Back]

Note 35    Assuming that the parties would in fact share the economic benefit provided.    [Back]

Note 36    Of course, the legal and economic framework within which a decision whether to marry might be made will always be far more complex than the existence of one tax relief. Moreover, the decision to marry will usually be determined by factors unrelated to law or pecuniary advantage: see para 5.40.    [Back]

Note 37    Considerable care must always be taken in drawing conclusions from data relating to other countries and the particular legal schemes in operation there. However, research from Australia suggests that the introduction of legal remedies for cohabitants on separation would not induce more couples to cohabit in preference to marrying. Such laws have been in force in the most populous state, New South Wales, since 1985. A study seeking to track the impact on marriage rates of laws providing financial relief available between cohabitants on separation and death found no evidence of a causal connection between the introduction of that law and declining marriage rates: R Merlo and K Kiernan, “Does legislation recognising de facto relationships impact on marriage rates? Evidence from Australia” (2004) unpublished paper. The impact in the three states which were last to legislate (Queensland, Tasmania and Western Australia) was not assessed since those laws had been in force only a short time; those states’ legislation most closely mirrors the substance of the federal laws governing property division and (save in Queensland) maintenance on divorce. Note also the observation that levels of cohabitation in 2000 were very similar in Scotland and England and Wales, despite the fact that Scottish law at that time gave considerably less legal recognition to cohabitation than English law: A Barlow and G James, “Regulating Marriage and Cohabitation in 21st Century Britain” (2004) 67 Modern Law Review 143, at 168.    [Back]

Note 38    See J Ermisch, Personal Relationships and Marriage Expectations (2000) Working Papers of the Institute of Social and Economic Research: Paper 2000-27, University of Essex, on the continuing aspiration of most individuals in cohabiting relationship to marry.    [Back]

Note 39    See n 30.    [Back]

Note 40    See Appendix D for details.    [Back]

Note 41    Denmark, Finland, Germany, Iceland, Norway, and Sweden: see Appendix D.    [Back]

Note 42    Australia (Tasmania), Belgium, various Canadian provinces, France, the Netherlands, and New Zealand: see Appendix D. See also Lord Lester’s Civil Partnership Bill 2002, available at http://www.odysseustrust.org/civil_partnerships/index.html (last visited 4 May 2006).    [Back]

Note 43    Belgium, Canada, the Netherlands and Spain. South Africa has legislation pending, following a decision of the Constitutional Court in 2005: Minister of Home Affairs v Fourie CCT 60/04, 2005 (3) SA 429 (SCA).    [Back]

Note 44    See, for example, France.    [Back]

Note 45    For example, New Zealand, having already introduced an opt-out regime of financial relief on separation and death for all cohabitants, opposite-sex and same-sex (Property (Relationships) Amendment Act 2001), has recently also introduced a new formal status – civil union – available to all couples (Civil Union Act 2004).    [Back]

Note 46    See K Waaldijk’s analysis of the laws in the nine European countries that have a form of registered partnership available to same-sex couples (exclusively, or with opposite-sex couples): More or less together: the level of legal consequences of marriage, cohabitation and registered partnerships for different-sex and same-sex partners (2005).    [Back]

Note 47    The French PaCS (“pacte civil de solidarité”) appears to be the most popular: since its introduction in 1999, over 170,000 couples have taken it up: Rapport fait au nom de la Mission d’Information Sur La Famille et les Droits des Enfants (2006) p 428, available at http://www.assemblee-nationale.fr/12/pdf/rap-info/i2832.pdf (last visited 4 May 2006). The available statistics do not differentiate between opposite-sex and same-sex couples, so it is not clear to what extent it is being used by same-sex couples as the only route to formalising their relationship and by opposite-sex couples seeking legal regulation distinctive from that offered them by marriage law. Dutch registered partnership has a slightly lower take-up (same-sex couples have been able to marry in the Netherlands since 2001), and the figures are inflated by the “lightning divorce” phenomenon: see K Boele-Woelki, “Registered Partnership and Same-sex Marriage in the Netherlands”, in K Boele-Woelki and A Fuchs (eds), Legal Recognition of Same-Sex Couples in Europe (2003) pp 49-52; I Curry-Sumner, All’s Well that Ends Registered (2006) pp 153-5; and http://statline.cbs.nl/StatWeb/table.asp?PA=37772eng&D1=0-28,35-47&D2=(l-11)-l&DM=SLEN&LA=en&TT=2 (last visited 4 May 2006). Tasmania’s new scheme (the only registration scheme in Australia), introduced in January 2004 and available to unmarried couples and other “caring” relationships, had attracted 61 registrations by March 2006, none of which were caring relationships and most of which were same-sex couples: data from Tasmanian Registry of Births, Deaths and Marriages, as at 2 March 2006.    [Back]

Note 48    See generally R Deech, “The case against legal recognition of cohabitation” (1980) 29 International and Comparative Law Quarterly 480; Attorney General of Nova Scotia v Walsh [2002] 4 SCR 325, at [201], per Gonthier J; Rapport fait au nom de la Mission d’Information Sur La Famille et les Droits des Enfants (2006) p 87 (Parliamentary report to the Assemblée Nationale).    [Back]

Note 49    See Part 9.    [Back]

Note 50    See para 4.68.    [Back]

Note 51    S Arthur, J Lewis, M Maclean, S Finch and R Fitzgerald, Settling Up: Making Financial Arrangements After Divorce or Separation (2002).    [Back]

Note 52    See also examples given by A Dnes, “Cohabitation and marriage”, in A Dnes and R Rowthorn, Law and Economics of Marriage and Divorce (2002) pp 123-4.    [Back]

Note 53    This approach is preferred by several commentators in this jurisdiction: see, for example, R Bailey-Harris, “Law and the unmarried couple – oppression or liberation?” (1996) 8 Child and Family Law Quarterly 137; Baroness Hale of Richmond, “Coupling and Uncoupling in the Modern World”, FA Mann Lecture (November 2005).    [Back]

Note 54    See Appendix C for details.    [Back]

Note 55    Eg New Zealand.     [Back]

Note 56    A characteristic which is not unique to “cohabiting couples” but is exhibited by others, including carers, friends, siblings and other blood relatives who, as adults, share a household.     [Back]

Note 57    See, for example, P Morgan, Marriage-Lite: the Rise of Cohabitation and its Consequences (2000).    [Back]

Note 58    J Lewis, The End of Marriage? (2001) p 189.    [Back]

Note 59    In a study of long-term cohabitants and spouses, more similarities in terms of the nature of the parties’ “commitment” were found between the younger spouses and cohabitants than between the younger and older married couples: J Lewis, J Datta and S Sarre, Individualism and commitment in marriage and cohabitation (1999) Lord Chancellor’s Department Research Series No 8/99.    [Back]

Note 60    C Smart and P Stevens, Cohabitation Breakdown (2000); the few “no commitment” cases they found included “on-off” relationships and “really relationships of convenience” where there was no actual or even potential commitment: p 33.    [Back]

Note 61    In Smart and Stevens’ study, these relationships were typically established before cohabitation commenced, there were some legal and financial arrangements, children were planned or wanted by both parties, both were involved in child-care, the parties’ expectations of the relationship were congruent: C Smart and P Stevens, Cohabitation Breakdown (2000) p 24. See also the findings of J Lewis, J Datta and S Sarre, Individualism and commitment in marriage and cohabitation (1999) Lord Chancellor’s Department Research Series No 8/99; J Eekelaar and M Maclean, “Marriage and the Moral Bases of Personal Relationships” (2004) 31 Journal of Law and Society 510; A Barlow, S Duncan, G James and A Park, Cohabitation, Marriage and the Law (2005); L Jamieson et al, “Cohabitation and commitment: partnership plans of young men and women” (2002) 50 Sociological Review 356.    [Back]

Note 62    Couples may marry with a simple, low-cost, civil ceremony; compare the high average wedding costs reported in the media, ranging from £16,500-£20,000: http://www.bbc.co.uk/relationships/couples/life_postwedding.shtml (last visited 4 May 2006). But it seems that many couples consider that unless and until they can get married “properly”, that is to say, with a large (and expensive) party for all their friends and family, it is not worth doing: J Haskey, “Cohabitation in Great Britain: past, present and future trends – and attitudes (2001) 103 Population Trends 4, at 11; A Barlow, S Duncan, G James and A Park, Cohabitation, Marriage and the Law (2005) pp 70-72.    [Back]

Note 63    J Lewis, J Datta and S Sarre, Individualism and commitment in marriage and cohabitation (1999) Lord Chancellor’s Department Research Series No 8/99. Differences between the couples examined in that study seemed to depend more upon generation than on marital status; see also findings of J Eekelaar and M Maclean, “Marriage and the Moral Bases of Personal Relationships” (2004) 31 Journal of Law and Society 510.    [Back]

Note 64    In Smart and Stevens’ study, these cases were characterised by the couple not having known each other long, a lack of legal and/or financial arrangements, pregnancy being unplanned (though not necessarily unwanted) and predating the cohabitation, and the need for significant personal change if the relationship was to last: C Smart and P Stevens, Cohabitation Breakdown (2000) p 26.    [Back]

Note 65    It has been suggested that some of these couples are better compared with non-co-residential partners than with spouses: M Murphy, “The evolution of cohabitation in Britain 1960-95” (2000) 54 Population Studies 43, at 53. See also the discussion of Crick v Ludwig (1994) 117 DLR (4th) 228 in J Mee, The Property Rights of Cohabitees (1999) pp 23-26.    [Back]

Note 66    Compare the arguments against reform made by M Garrison, “Is Consent Necessary? An Evaluation of the Emerging Law of Cohabitant Obligation” (2005) 52 University of California Los Angeles Law Review 815, arguing specifically in relation to reform which would subject cohabitants to the same, equal sharing, regime as spouses.     [Back]

Note 67    It is worth observing that the law already offers considerable support for parenting outside marriage. Unmarried fathers may now acquire parental responsibility for their children by jointly registering the birth: Adoption and Children Act 2002, s 111, amending Children Act 1989, s 4. Unmarried opposite-sex couples may become parents with the assistance of donor gametes and reproductive technology: Human Fertilisation and Embryology Act 1990, s 28(3). Both opposite-sex and same-sex cohabiting couples are eligible to be considered for adoption: Adoption and Children Act 2002, s 50 and s 144(4)-(7). Flexible working and other “family-friendly” employment rights apply equally to spouses, civil partners and cohabiting couples: see Part 4; and both the child support legislation and Schedule 1 to the Children Act 1989 apply regardless of the status of the relationship between the child’s parents    [Back]

Note 68    In which case, as between friends, no legal obligation of support could reasonably be imposed.    [Back]

Note 69    J Eekelaar, “Friendship”, in Family Law and Personal Life (2006), in press. See also J Eekelaar, “Non-marital property”, in P Birks (ed) Frontiers of Liability (1994) vol 2, p 204.    [Back]

Note 70    P Parkinson, “Quantifying the Homemaker Contribution” (2003) 31 Federal Law Review 1, at 14.    [Back]

Note 71    See Examples 3, 3A and 4 in Part 7, and Part 9.     [Back]

Note 72    See findings of E Cooke and A Barlow, “Community of Property: a Regime for England and Wales?”, paper given at the University of Staffordshire, Centre for the Study of the Family, Law and Social Policy, Annual Seminar, February 2006: stratified sample of 73 respondents, semi-structured interviews based on vignettes. An Omnibus Survey conducted in 1995 (2000 respondents) by the Centre for Socio-Legal Studies found considerable support for property adjustment on separation in favour of a cohabiting parent who had for many years cared for the parties’ children, having given up work and so made no financial contribution to the property: 85% thought that the claimant should receive a half-share or more of the value of the family home. See also findings of S Arthur, J Lewis, M Maclean, S Finch and R Fitzgerald, Settling Up: Making Financial Arrangements After Divorce or Separation (2002); and J Lewis, J Datta and S Sarre, Individualism and commitment in marriage and cohabitation (1999) Lord Chancellor’s Department Research Series No 8/99.    [Back]

Note 73    R Deech, “The Case Against the Legal Recognition of Cohabitation” (1980) 29 International and Comparative Law Quarterly 480, at 492-494.    [Back]

Note 74    Baroness Hale, “Coupling and Uncoupling in the Modern World”, FA Mann Lecture (November 2005).    [Back]

Note 75    They also already have access to occupation orders and tenancy transfers under the Family Law Act 1996.    [Back]

Note 76    See R Bailey-Harris,”Dividing the Assets on Family Breakdown”, in R Bailey-Harris (ed), Dividing the Assets on Family Breakdown (1998) p 85; P Parkinson, “Quantifying the Homemaker Contribution” (2003) 31 Federal Law Review 1, at 10.    [Back]

Note 77    Though this is subject to the uncertainty of the law of implied trusts as regards indirect financial contributions to the mortgage.    [Back]

Note 78    See also Examples 8 and 9 in Part 7.    [Back]

Note 79    See also J Eekelaar, “Friendship”, in Family Law and Personal Life (2006), in press.    [Back]

Note 80    See J Mee, The Property Rights of Cohabitees (1999) pp 315-6, who posits the example of a man who purchases a second property for rental, and the property is let to a young woman who could have afforded a mortgage but decided to rent instead, effectively paying his mortgage for him; the property market booms, creating a profit for him, and nothing for her.    [Back]

Note 81    There might be thought to be some inconsistency in the fact that means-tested benefits rules presuppose, and perhaps encourage or even force, financial interdependence between cohabitants, but that they have no remedies on separation to deal with the consequences to which such financial interdependence may give rise.    [Back]

Note 82    S Gardner has long argued for the law to approach family property from the perspective of “trust and collaboration, rather than autonomy and responsibility”, or a “rubric of communality” or mutualism, instead of the current individualistic approach which focuses on specific intentions about ownership and financial contributions in a way unsuited to the informal family context: “Rethinking Family Property” (1993) 109 Law Quarterly Review 263; “Fin de Siècle Chez Gissing v Gissing” (1996) 112 Law Quarterly Review 378; “Quantum in Gissing v Gissing Constructive Trusts” (2004) 120 Law Quarterly Review 541. In the absence of judicial development along those lines (see para 5.98 below), legislative intervention would be necessary.    [Back]

Note 83    See, for example, A Barlow, S Duncan, G James and A Park, Cohabitation, Marriage and the Law (2005) ch 6, particularly if the purpose of ancillary relief on divorce is essentially to deal with the financial hardship that would otherwise be experienced; see also R Bailey-Harris, ”Dividing the Assets on Breakdown of Relationships Outside Marriage”, in R Bailey-Harris (ed), Dividing the Assets on Family Breakdown (1998). As we shall explain in Part 6, we do not propose that the law applying to spouses should be extended to cohabitants.    [Back]

Note 84    The point is made in relation to cohabitants generally, not just those without children.    [Back]

Note 85    J Mee, “Property rights and personal relationships: reflections on reform” (2004) 24 Legal Studies 414, at 426. As that author goes on to observe, some non-intimate relationships between other categories of home-sharer may exhibit similar characteristics. But that does not detract from the argument’s contribution to the case for reform in relation to cohabitants.    [Back]

Note 86    See studies referred to in n 72. The British Social Attitudes Survey posed questions about maintenance remedies on separation and rights to remain in the home following the death of a partner, both in the context of a ten-year, childless, opposite-sex cohabitation. Respondents were asked whether they thought that a cohabitant should have the same claim as a spouse in such situations: 61% favoured awarding maintenance, 93% favoured allowing the survivor to remain in the home: see A Barlow, S Duncan, G James and A Park, Cohabitation, Marriage and the Law (2005) ch 5. The 1995 Omnibus Survey (see n 72), which asked questions about property adjustment relating to shares in the home on separation, found considerably less support for property adjustment in cases without children. If there had been no children and the claimant had made no financial contribution to the acquisition of the property, only 31% thought a half-share was appropriate and 29% considered that no award should be made; on the same facts, involving a same-sex couple, 24% favoured a half-share and 44% thought that no award should be made.     [Back]

Note 87    See paras 6.205 and 9.57.    [Back]

Note 88    Indeed, in applying those remedies, the courts increasingly take account of periods of pre-marital cohabitation: see para 6.281.    [Back]

Note 89    See Example 3B in Part 7.    [Back]

Note 90    See paras 3.55 and 3.62.    [Back]

Note 91    This is as true of cases involving spouses as it is of cohabitants. We consider some of the special features of small money and debt cases in para 6.298.     [Back]

Note 92    A Perry, G Douglas, M Murch, K Bader and M Borkowski, How parents cope financially on marriage breakdown (2000); S Jarvis and S Jenkins, Marital Splits and Income Changes: Evidence from Britain (1997) Working Papers of the Institute of Social and Economic Research: Paper 97-4, University of Essex.     [Back]

Note 93    Perry et al found that while fathers’ incomes were less likely to drop, they were more likely to have difficulty finding secure accommodation and had extra expenses to meet owing to their continuing liability to the children of the marriage and their primary carer: n 92.     [Back]

Note 94    K Kiernan, H Land and J Lewis, Lone Motherhood in Twentieth Century Britain (1998) p 283.    [Back]

Note 95    Notably in Australia, New Zealand and Canada: see J Mee, The Property Rights of Cohabitees (1999) for discussion.     [Back]

Note 96    J Mee, The Property Rights of Cohabitees (1999) pp 313-8 and J Mee, “Property rights and personal relationships: reflections on reform” (2004) 24 Legal Studies 414, at 433.    [Back]

Note 97    Even, or particularly, if that policy is not articulated: G Battersby, “Oxley v Hiscock in the Court of Appeal: the search for principle continues” (2005) 17 Child and Family Law Quarterly 259, noting the lack of policy discussion in Oxley v Hiscock [2004] EWCA Civ 546, [2005] Fam 211.    [Back]

Note 98    See Oxley v Hiscock [2004] EWCA Civ 546, [2005] Fam 211, at [70], per Chadwick LJ.    [Back]

Note 99    This would seem necessary for any authoritative clarification of the law.    [Back]

Note 100    See, for example, Family Property Law (1971) Law Commission Working Paper 42, in the context of the ownership of property during marriage.    [Back]

Note 101    See, for example, remarks made in Pettitt v Pettitt [1970] AC 777, 795, per Lord Reid, 805, per Lord Morris, 810-811, per Lord Hodson; Burns v Burns [1984] Ch 317, 332, per Fox LJ, and 345, per May LJ; Stack v Dowden [2005] EWCA Civ 857, at [78], per Carnwath LJ.     [Back]

Note 102    Sharing Homes: A Discussion Paper (2002) Law Com 278, para 4.29.    [Back]

Note 103    There are various checks that could be used to limit claims, whether litigated or not, in particular eligibility requirements and a tight limitation period. See Parts 9 and 11.    [Back]

Note 104    See Part 11.    [Back]

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You are here: BAILII >> Databases >> The Law Commission >> Cohabitation: The Financial Consequences of Relationship Breakdown [2006] EWLC 179(5) (04 May 2006) URL: http://www.bailii.org/ew/other/EWLC/2006/179(5).html Cite as: [2006] EWLC 179(5)