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Lucia Clark & Louise Laing on Scottish Family Law: Cohabitation - better off in Scotland?
Sep 29, 2018, 20:59 PM
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Feb 8, 2013, 12:08 PM
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It is perhaps one of the most enduring legal "urban myths": that a man and woman who live together for many years, support each, maybe have children together, are viewed in the eyes of the law as being married and so when their relationship ends, they will be entitled to receive a fair share of their home and any other assets. A recent case in the English Court is a very good demonstration of the harsh reality for the unmarried ex-partner.
Paula Curran and Brian Collins (both in their 50s) had been in a relationship for 30 years. Their home and valuable business, which they had run jointly, are owned in the sole name of Mr Collins. Ms Curran has nothing and applied to the Court for a share of these assets. The County Court judge ruled that Ms Curran is not entitled to share in either the home or the business. He felt compelled ignore his "human sympathies" and apply the law - which, in fairness to the judge, is his job. Ms Curran has however recently been granted leave to appeal - and it will be interesting to see what happens in the next round.
It is difficult not to have some sympathy for individuals like Paula Curran. If, like her, you had started a relationship with someone in the 1980s, would sorting out a cohabitation agreement have been at the forefront of your mind?
However, had the couple been living in Scotland, Ms Curran could have some recourse under the Family Law (Scotland) Act 2006. The Act introduced some limited provisions providing financial protection for cohabitants. Under Section 28, the court can order payment of a capital sum by one cohabitant to other. Such a claim must be raised within one year from the date upon which the couple ceased to cohabit. There are no prescribed awards under the 2006 Act and it is necessary to demonstrate that the defender has derived an economic advantage from contributions made by the applicant and that the applicant suffered a corresponding economic disadvantage in the interests of the defender or any relevant child.
Ms Curran may well have had the basis of such claim against Mr Collins, if the couple had been living in Scotland. What is less certain is how the Scottish Court would quantify that claim. The Act states that "economic advantage" includes gains in capital, income and earning capacity and "economic disadvantage" is to be construed accordingly. "Contributions" include indirect and non-financial contributions - although these are of course more difficult to quantify than say a injection of capital into a property or a business. Given the terms of the Act, it's not surprising that there have been varying approaches to cohabitants claims by the Courts in Scotland over the past few years. The decision of the Supreme Court last year in Gow v Grant (pdf) helpfully discouraged the detailed analysis of day to day expenditure during the period of cohabitation which has been a feature of some other cases in the lower courts. The Supreme Court however left considerable discretion to judges deciding future cases, rather than setting out a detailed breakdown of how awards should be assessed - arguably, a very English (rather than Scots) law approach?
Scots law provisions for cohabitants in no way equivalent to financial provision on divorce. In Scotland, the latter is based on fair sharing of the matrimonial property (the starting point for 'fair' being equal sharing). There is no equivalent to matrimonial property for cohabitants and therefore no defined value to divide. It is a very different exercise.
Finally, it is important for cohabiting couples in Scotland to be aware that the 2006 Act is retrospective - i.e the cohabiting relationship may have commenced long before these provisions came into force but the Act still applies to whole period of cohabitation. Unmarried couples may think they are avoiding financial 'messiness' by not marrying, but they would be wise to think again. The only way (in either jurisdiction) to make the parties' intentions clear is to enter into a written cohabitation agreement drafted by a specialist family law solicitor.
Lucia Clark is an Associate and Louise Laing is Solicitorin the top-ranked Family Law Team at Morton Fraser LLP. Lucia is dual-qualified in Scots and English law and specialises in complex financial and cross-border cases. She can be contacted at email@example.com.
The views expressed by contributing authors are not necessarily those of Family Law or Jordan Publishing and should not be considered as legal advice.