This week is not only the Christmas countdown but the release of the Law Commission Scoping Report on Reform of Financial Remedies Law in England and Wales; to be published on 18 December 2024. 

The report is the byproduct of a review launched in April 2023 to examine laws that determine how finances are divided among couples after divorce as governed by the Matrimonial Causes Act 1973 and the Civil Partnership Act 2004.  

With over half a century of passage of the 1973 Act the decision to review financial remedies law is understandable.  The Government has asked the law commission to review if the current law has stood the test of time and is still working effectively, delivering fair outcomes for divorcing couples. 

Financial Remedy Orders

Before discussing the report, it is important to cover or some refresh on financial remedy orders. These orders address the division of assets, income and responsibilities between parties in divorce. This includes a wide range of financial provisions such as lump sum payments, maintenance payments and property settlements. The aim of these orders is to meet both parties' future needs.  

What is being reviewed?

As part of the analysis, the law commission will consider if there is potential for reform in areas such as:

• Discretionary powers given to judges over the division of financial assets and if there is a need for a clear set of principles enshrined in law to give more certainty to divorcing couples.
• If there should be wider powers for the courts to make orders for children over age of 18.
• How maintenance payments for an ex-spouse of civil partner should work.
• What consideration the courts should give to the behaviour of separating parties when making financial remedy orders.
• The factors judges should consider when making financial remedy orders. 

The commission has said the report does not make specific recommendations, rather it will offer an analysis on whether and how to reform the law on the points listed above. These suggestions form a four-pronged model. The first is a codification of existing case law, leaving judges with wide discretion. The second is codification plus limited reforms where the law is not yet settled by cases. The third sets out principles and objectives to guide the court when exercising discretion and the fourth is a new matrimonial property regime.

The proposal of four different potential models for financial remedies reform may decrease levels of judicial discretion. This could be a step backwards rather than forward as it may prevent existing legislation from continuing to evolve. Removing court discretion would also risk a one size fits all approach to a highly nuanced area. 

However, it may be more beneficial than we think to enshrine some settled case law into this area to increase certainty. Practitioners may be of the opinion that the advice given to clients is clear and well-established rendering reform unnecessary. Whilst this is true, it is often unlikely that an increase in guidance is unhelpful as it may reduce inconsistency in outcomes. 

Whilst the reform is welcomed there are also other areas that are in need of attention such as the legal protection afforded to unmarried cohabiting couples and the minimal benefit financial remedy reform will have on needs-based cases where the role of the judiciary is to try and ensure the needs of parties are met. 

Whilst this needs attention it would be unfair to say it has been neglected before the report is published as it may well have been included in their findings anticipated on the current trends and challenges of family law. 

It will be an interesting and insightful report to read to see what the Law Commission propose for reform in this area.