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The Cohabitation Bill: the present position

Is Lord Lester's Cohabitation Bill making progress in Parliament? Bik Wong, solicitor with Hubbard Pegman & Whitney LLP, reviews the history and scope of the proposed radical legislation

Bik Wong, Hubbard Pegman and Whitney LLP

The Cohabitation Bill (“the bill”) was introduced into the House of Lords by Lord Lester of Herne Hill (the champion of much significant family legislation) and given its first reading on 11 December 2008, the second reading of the bill took place on 13 March 2009: it went through its committee stage on 30 April 2009. The Bill is largely based on the report of the Law Commission in 2007.  Whilst the bill has had firm support from Resolution and family lawyers generally, it also has some significant opponents notably the legal academic Baroness Deech and the attorney general Baroness Scotland.

Family Practitioners have long bemoaned the lack of an equivalent piece of legislation to the Matrimonial Causes Act 1973 (“the MCA”) for co-habitants who are in a situation of relationship breakdown. At the end of 2007, the Office of National Statistics reported that approximately 24% of men and 25% of women are cohabiting, this is a significant increase over the preceding 20 year period. Hence, the general view from family lawyers is, that this gap in the law in relation to cohabiting couples separating, really does need to be filled.

At the present time, where a dispute over property arises between co-habitants all that can be relied upon is trust law: such law is complex and has evolved in quite different factual situations to those of a cohabitation scenario. Likewise when considering the debts of the parties, which may have been incurred for a joint benefit, the application of strict contractual principles may well result in an unfair consequence. Where chattels are concerned, there are no legal parameters at all and consequently, there is a high risk of disputes between ex cohabitants descending into expensive and damaging squabbling.  In short as matters stand, ex-cohabitants who are financially able to consult lawyers may well find themselves expending more money than they would otherwise do, because of the lack of appropriate law aimed to address their particular difficulties.

It is these problems that the Cohabitation bill, introduced by Lord Lester to the House of Lords, is designed to remedy.  The significant provisions of the Cohabitation bill are:

That its provisions would apply to those who have lived together as a couple (whether of the same or the opposite sex) for a continuous period of two years or more. This requirement was subsequently extended at the committee stage to five years for childless couples.

The second condition is that neither of the parties are married to each other, nor are they civil partners, and they are not within prohibited degrees of relationship to each other.

A family court would be empowered to make financial settlement orders. Any application for a financial settlement order would have to be made within twenty four months of cohabitation ceasing. Various provisions can be ordered by the court under a financial settlement order such as: lump sum settlements; periodical payments (including secured periodical payments); property settlements; the transfer of property; the sale of property and pension sharing (refer to s.10 (1) of the bill. These provisions are similar to those contained in the MCA. However, it is unclear how the ability of the court to make pension sharing orders would square with the presumption also contained in the bill that the parties should be financially independent of each other as soon as practicable. This presumption is a significant difference from the MCA, where periodical payments for a party to a marriage are usually made for the duration of joint lives. Under the cohabitation bill, any order for periodical payments would be limited to three years and any award would not exceed the applicant’s reasonable needs, which is simpler and less generous than the wide judicial discretion conferred by the s.25 factors in the MCA.

The bill contains a checklist of considerations to which the court must have regard when considering whether to make a financial settlement order ie:

A financial settlement order may be revoked, suspended or revised by the court. The bill also enables the court to grant injunctive relief where a party apprehends that the other may try to dispose of or dissipate assets (refer to schedule 1 s.14(4)). By the same token the parties themselves may agree to opt out of financial settlement orders (s.12).  The original caveat that both parties should receive independent legal advice from a qualified practitioner before an opt out agreement can be entered into, was severely opposed by Baroness Deech at the second reading on the basis that such a provision was a “windfall for lawyers”.

The second reading of the bill on 13 March 2009 brought into sharp focus the arguments for and against the bill. Lord Lester made clear that the purpose of the bill was to provide appropriate protection for those who are vulnerable when a relationship ends, in particular the lack of protection for dependent parents. To meet the point of those ideologically opposed to the bill because of their view that it would undermine the status of marriage, Lord Lester reassured the House that he was strongly in favour of marriage.

Baroness Turner of Camden and Baroness Butler-Sloss spoke strongly in favour of the bill, the former describing it as “very necessary”: the latter expressing her profound disagreement with the severe criticisms of the bill by Baroness Deech.  Baroness Deech declared that in her view the bill was wrong in principle and in practice and the cohabitation law retarded the progress of women, disrespected the relationship and was a recipe for instability. She described one of her points of opposition as being one of human rights ie that by imposing a complex legal structure on people who were not did not wish to be bound by marriage as simply wrong.  If this learned academic had direct practical experience of dealing with the intractable disputes that can arise between ex-cohabitants then one suspects her views would certainly be more moderate.

Lord Henley of the Opposition stated that he was unable to support the bill because it removed choice from individuals and that the bill would weaken the institution of marriage. Interestingly Lord Harries (a former cleric)  expressed the view that introducing the bill would not increase the number of marriages failing and conversely not to introduce the bill, would not strengthen the institution marriage.

Most disappointingly, the Attorney-General (Baroness Scotland) considered that the bill sought to divide assets in a manner that was similar to the Matrimonial Causes Act rather than simply addressing hardship. In fact the lack of a statutory  equivalent to the MCA for ex cohabitants is what many family lawyers regard as being one of the banes of their professional lives!

Detailed consideration of the various objections raised to different parts of the bill was given at a meeting on 21 April 2009, of the Resolution Advisory Group with Mary Creagh MP, who herself introduced a similar Bill to the House of Commons.  The purpose of the meeting as outlined by Lord Lester was to simplify and streamline some of the provisions of the bill in the hope that it would reduce the likelihood of opposition. For this reason close attention was paid to the objections raised at the second reading.

With reference to the those to whom the bill would apply, it was agreed to extend the period of cohabitation for those without children from two to five years, but to confer the court with a discretion to waive that requirement in certain circumstances where failure to make an order would result in exceptional hardship.  Baroness Deech and Lord Henley opposed the retention of the court’s discretion, nor did they wish the bill to have retrospective effect.  These peers also proposed that the bill apply to all family members not just co-habiting couples.  They also desired that common law and equitable principles would have continued to apply which of course flew in the face of the specific purpose of the bill which is designed to replace the use of Trust law in determining the property disputes of cohabiting couples.

To meet one of the arguments made by Baroness Deech in opposition to the bill, it was agreed to remove the requirement for parties to take legal advice where they envisaged entering into an opt-out agreement: a provision positively encouraging the use of ADR was included.

With respect to the factors to which the court is complied to have regard when considering whether to make a financial settlement order, it was agreed to reduce these.

The Committee Stage took place on 30 April 2009.  The proposed amendment that the length of the qualifying period of cohabitation should be increased from two years to five years was passed.

Baroness Deech sought with a second amendment to include a broader category of cohabitants such as those in the same situation as the Burden sisters. Lord Brett confirmed that the Government did not support this amendment and therefore it was withdrawn by the Baroness, however the Baroness was by no means finished with her raft of objections.  She objected to the retrospective effect of the bill, to this Baroness Butler Sloss responded vigorously making the point that the purpose of the bill was to promote legal certainty for a specified group of people many of whom have been in long standing relationships who need legislative assistance of this kind. This amendment was defeated.

For those who support this bill, it is disappointing that Baroness Scotland feels unable to support it. She stated that the bill went further than the recommendations of the Law Commission. She apprehended that one of the consequences of the bill if passed, would be expensive litigation, though she accepted that the bill was a genuine attempt to assist unmarried families to resolve their differences smoothly. Furthermore the Government Whips’ Office have indicated that they are not prepared to grant more time for the Bill in the Committee stage, for that reason there is no real possibility of the bill becoming law in the foreseeable future.

The Bill being left in limbo in this way is lamentable given the changed social conditions of our time. However, the redoubtable Lord Lester made the point that it took him thirty years to get the Human Rights Act through parliament!  Therefore those of us who see the need for legislation in this area, can only hope that now the issues are on the political radar, further attempts will be made at filling this significant hole in the legislation.