Family Law

'The law relating to financial orders is inherently unclear. It is not possible to discern from the statute what the law requires, although the courts and family lawyers administer the law with confidence.'

Suffix this paragraph with the word 'Discuss', and you have the makings of a particularly knotty and nightmarish finals question. The observation was in fact made by the Law Commission at para 2.56 of its February 2014 report Law Com No 343, Matrimonial Property, Needs and Agreements ('LC343')).

Financial needs are 'an issue of central importance in most divorces' (LC343, para 1.22). But how are a divorcing spouse’s needs to be assessed? At what level should needs be met? For how long should provision for needs be made in a financial order? How important, or how possible, is a transition to independence following a divorce? Given the divergences of approach among the judiciary to answering these questions, the Family Justice Council has just published (1 July 2016) the excellent 'Guidance for the judiciary on financial needs on divorce' ('the Guidance').

The Guidance was published following the identification by the Law Commission of the following problems.

Problem 1 – regional disparities and forum shopping

In LC343, the Law Commission identified geographical inconsistencies and 'significant regional differences' in the duration of spousal periodical payments awards (para 2.45) . There was also anecdotal evidence of differences in quantum (para 2.45 – 2.53), and of strategic forum shopping (2.53).

The Law Reform Committee of the General Council of the Bar told the Law Commission 'the Principal Registry of the Family Division [as it then was] and High Court tend to make joint lives orders, other major court centres do not. The impact is that clients and solicitors openly forum shop' (para 2.50).

Problem 2 – bargaining in the shadow of the law

Family lawyers will be familiar with the law and with the practice of their local court. However –

• 'most people cannot afford lawyers'; and
• '[m]any who previously had access to legal advice are no longer entitled to legal aid'; and
• it is unreal to suggest that the parties to a dispute always have 'access to judicial discretion';

Many separating couples labour under the impression (of course, an illusion) that the law requires them to share everything on a 50:50 basis.

In the absence of guidance as to the law, “a couple seeking to negotiate a financial settlement on divorce, without the means to afford lawyers and without the inclination to go through the court process, may have great difficulty in discerning what their legal rights and responsibilities are” (LC343 para 2.55).

The solution

The Law Commission therefore recommended the production and publication of non-statutory guidance, with 'the aim of minimising regional inconsistencies and addressing the problem of lack of transparency' (LC343, 2.57).

Although 'not intended to change the law' (‘how could it?’, I hear you cry), the resulting Guidance from the Family Justice Council –

• explains how the court exercises its discretion; and
• encourages 'the consistent use of that discretion in a particular way and … with a particular objective' (p 7).

Who wrote the Guidance?

The Family Justice Council Financial Needs Working Group is chaired by Mrs Justice Roberts. Members of this “small but hugely experienced working group” include other senior members of the judiciary, senior counsel, leading academics and highly-respected solicitors, all of whom, it is self-evident from reading the Guidance itself, have a genuine interest in financial orders (ancillary relief).

Who should read it?

The Guidance is aimed at the judiciary. It very effectively summarises the combined effect of the Matrimonial Causes Act 1973 (and the Civil Partnership Act 2004) and the case-law that has developed the jurisprudence about needs. So, first, if the judiciary are being asked to read this document, then it is required reading for those whose cases will be decided by those judges. But, second, the Guidance is so well-written and provides so many helpful citations and shortcuts that it would be foolhardy for any family lawyer to ignore it.

The Guidance is in any event presented in an easily digestible format, with the use of short section-summaries and appropriate headings, and whilst not exactly light bedtime reading, it would certainly make those long train journeys to court pass more swiftly.