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Following its 2012 consultation on marital property agreements, the Law Commission has opened a supplementary consultation on financial needs and non-matrimonial property following a relationship breakdown.
As access to family law legal advice will become more limited following reform of legal aid and the number of litigants in person increases, the Law Commission is considering ways to simplify the process of separating a couple's finances.
The consultation considers to what extent one spouse should meet the other's financial needs and what should happen to non-matrimonial property.
In relation to law relating to financial needs, the Law Commission is considering three options:
(1) Compensation for needs generated by the relationship. The spouse left less well-off by the divorce or dissolution would be entitled to support until he or she was able to attain the level of earnings and the living standard that he or she would have achieved but for choices made in the interests of the family.
(2) Support to enable a transition to independence. This would provide for a financial adjustment that equalises, or evens out, the standards of living of the couple for a transitional period. In contrast to a compensatory basis for payment, this approach does not require the court or the parties to work out what position the claimant would have been in, but for the marriage or civil partnership.
(3) Support for a limited time so as to create incentives for independence. This option could impose a statutory time limit on the support available from a former spouse to incentivise their ex-partner into employment and gain independence. However, the Commission has said it will not go as far as the Scottish system where a three-year limit is placed upon support following divorce.
The Consultation Paper also asks "whether financial support should continue to be determined by the court, at the judge's discretion, or whether it should be calculated by reference to a formula, so substituting greater predictability for individualised discretion".
In an opinion piece today for Family Law Newswatch, Alison Hawes, partner and family law specialist at Irwin Mitchell, warns: "The price of certainty and a rigid formulaic approach may lead to the loss of the balancing act that experienced judges work with to create solutions that take issues like bad behaviour, illness and business assets into account. Such factors often are so diverse that they simply do not fit into this concept."
In relation non-matrimonial property the Law Commission is considers:
(1) the definition of non-matrimonial property;
(2) whether there should be a rule that it is not shared;
(3) whether that rule should be subject to the further rule that it must be shared if it is required to meet needs; and
(4) whether non-matrimonial property can ever become matrimonial, either by the passage of time or because it has been sold and replaced or has appreciated in value as a result of investment or management by either party.
The consultation period is open until 11 December 2012.
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