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Cohabitation Rights Bill [HL]

My Lords, it was in July 2007, nearly 12 years ago, that the Law Commission issued its report recommending the financial provision measures in this Bill. Then, in December 2011,

it recommended the Bill’s intestacy and related provisions. Yet, in all this time, there has been no government action.

The proposals in this Bill are modest. They would not give cohabitants relief resembling the financial relief available on divorce. However, they would enable courts, in appropriate circumstances, to adjust the financial position of qualifying cohabitants on relationship breakdown, so as to spread the financial consequences, benefits and costs fairly between them. As I said when introducing the predecessor to this Bill in December 2014, in a passage quoted in the helpful House of Lords Library briefing, for which I am grateful:

“Essentially, and simplifying them to the core”,

my proposals,

“aim to address economic unfairness at the end of a relationship that has enriched one party and impoverished the other in a way that demands redress”.—[Official Report, 12/12/14; col. 2070.]

They are urgently needed.

When we debated this in 2014, the number of people cohabiting in the UK had risen from less than 3 million in 1996 to 5.9 million. The figure is now 6.6 million, and this rate of increase is not abating. The Office for National Statistics’ 2018 figures show that cohabiting families are the fastest growing family form and a quarter of all children are growing up in cohabiting families. About 40% of cohabiting couples have children together while cohabiting. The Bill is aimed not just at those couples but at their children, who stand to suffer from their parents breaking up.

This discussion takes place against the background of the misplaced but extraordinarily widespread belief that cohabiting couples already have legal protection on the basis that they are in what is often called common law marriage. It might be called that, but it does not exist. In January, the British Social Attitudes Survey demonstrated that 46% of people in England and Wales believe that cohabiting couples form a common law marriage. Despite all the publicity, that figure has remained almost unchanged since 2005. Only 41% of respondents get it right. I am grateful to Professor Anne Barlow at the University of Exeter for the further research she has done in this area, but the figures show that the level of ignorance is truly alarming.

The reality is that, in the absence of cohabitation agreements, cohabiting couples have virtually no legal protection. Rights to property are difficult and expensive to establish. They depend on outdated and unwieldy trusts law. A claimant has to show a joint intention that property should be jointly owned, and it remains extremely difficult to predict or ascertain what courts will decide the parties’ shares should be, even where joint ownership is established.

Child support protects the parents of minor children, where the arrangements work, and provides some financial support. However, when the children are older that stops, and the caring parent might be left unsupported, often having given up a career to look after the children. On the death of a partner, the survivor of a cohabiting couple might apply for limited provision under the Inheritance (Provision for Family and Dependants) Act 1975, but it is necessary to go to court to establish such a claim and it is limited. However, if a woman gives up a career to live with a man and

look after their children, or even just his children, and contributes to his business, even spending her savings to do so, there is no relief. If one partner in a couple works hard in the business of the other and suffers financially as a result, and then they break up, there is no relief. If one partner helps to build up the assets or the property of the other and cannot establish an intention that it should be jointly owned, or cannot afford to try, there is no relief.

The present law is a charter for partners in cohabiting couples, whether inadvertently or deliberately, to take financial advantage of their relationship and to walk away when it ends, leaving the other party disadvantaged and without redress. Then again, if one partner dies without a will, the other will inherit nothing as of right from the estate, not even the home they lived in together. The Bill would ensure that where a relationship between qualifying cohabiting couples breaks down, the court could adjust the economic impact of the relationship so they share that impact more fairly. I would hope and expect that were these provisions to be enacted, couples would settle the financial consequences of breakdown amicably and without the need for court proceedings.

I will now introduce the main financial provisions in the Bill. By Clause 2, cohabitants are defined as a couple—whether same-sex or opposite sex—who either have a child together or have lived together as a couple for three years. Importantly, particularly in the context of allowing people freedom of choice, by Clause 6 co-habitants could by agreement opt out of the Bill’s financial settlement provisions. There are requirements in Clause 12 for independent legal advice, along with other safeguards and formalities for opt-out agreements. By Clause 14, there would be power in the court to vary or revoke unfair opt-out agreements. Other cohabitation agreements or deeds of trust would also be honoured under Clause 6(2)(c), so the scheme would not be compulsory. By Clause 7(3), there would be a two-year time limit for bringing a claim following separation.

Clauses 8 and 9 and Schedule 1 set out the scheme of the financial settlement provisions. The starting point is for the applicant to show that he or she has made or will make qualifying contributions, whether financial or in work, care or kind to the party’s shared or family lives. If as a result of such contributions the other party has derived and retained a financial benefit, actual or potential, whether in capital, income or earning capacity, or the applicant has suffered or would in future suffer an economic disadvantage, the court could intervene to award a financial settlement if it considered it just and equitable to do so, having regard to a number of discretionary factors, to which I turn.

The award would, first, reverse any retained benefit in full or in part so far as reasonable and practical under Clause 8(3). If the applicant would still be left with an economic disadvantage, the court could then order that disadvantage to be,

“shared equally between the parties”,

under Clause 8(4); again, so far as it is reasonable and practical. The discretionary factors to which the court would be required to have regard in deciding whether

it was just and equitable to make an order include the welfare of any minor children of the parties, that being the first consideration; the financial position of each party; conduct which it would be inequitable to disregard; and the circumstances in which contributions were made, especially where they were discouraged rather than sought by the other party. The orders that could be made would, under Clause 10, be capital orders for lump sums, property or pension sharing. There would be no provision for continuing maintenance, although lump sums could be payable by instalments.

There are many who argue that it is not right to withhold from cohabiting couples the full relief available to couples who divorce. I do not agree. Couples are entitled to choose between marrying, entering a civil partnership or cohabiting. It is right that we respect the choices they make but that does not mean that cohabiting couples should be entirely without protection.

In 2014, the noble Baroness, Lady Deech, whom I am delighted to see in her place today, suggested that as a result of the then Bill, cohabiting couples,

“will find that they are snared unaware in a trap of laws from which there is no escape, save for the opting-out provisions of the Bill. Almost the entire panoply of marriage law is to be lowered on to them by the Bill once they have spent two years”—

it is now three years in the Bill before the House—

“cohabiting … or if they are parents of a child”.—[Official Report, 12/12/14; col. 2072.]

I do not agree with the noble Baroness, although I look forward to hearing from her again today.

The noble and learned Baroness, Lady Butler-Sloss, would have liked to be here today but unfortunately could not be so. With all her great experience of family law, she has said:

“I do not see ‘the panoply of family law’ as an appropriate phrase for the very modest proposals that the noble Lord, Lord Marks, has put forward, particularly in Clause 8 of the Bill. These are modest proposals: you have to show either a benefit acquired or an economic detriment”.—[Official Report, 12/12/14; col. 2079.]

I regard the opt-out provisions and the respect for cohabitation agreements and deeds of trust as important in preserving choice for cohabiting parties. It may be argued that the Bill would encourage litigation between former couples, but I expect most cases to be settled by agreement, without coming near a court. Furthermore, mediation will play a large part.

I turn now to the most important of the proposals for change, in respect of the death of a cohabitant. Clauses 16 and 17 would enable cohabitants to insure each other’s lives and policies to be written for the other partner’s benefit, so as to fall out of the deceased’s estate for inheritance tax purposes. Clause 18 would provide that cohabiting couples would be treated as relatives for the registration of death. Most importantly, Clause 19 would enable the survivor of a cohabiting couple to inherit an estate and an interest in the estate of a deceased partner on an intestacy. Clause 20 would ensure that a surviving cohabitant could make a claim to the parties’ joint home.

Cohabiting couples would still be able to make their own wills, like everyone else, but the unfairness that often occurs when one partner dies intestate would be avoided. I regard these as important provisions because, at present, when one partner in a cohabitating couple

dies intestate, the other is vulnerable to losing not only financial support but the home in which the couple lived. By Clauses 21 and 22 in Schedule 2, cohabitants’ 1975 Act claims would no longer be limited to claims to maintenance.

As your Lordships know, the Law Commission is a statutory independent commission established in 1965 with a mission to keep the law “fair, modern, simple” and “cost-effective”. The two reports recommending the proposals in the Bill were fully and carefully researched, and followed detailed and extensive consultations; yet, in all this time since their publication, we have had no government action—never refusal, always a delay.

In 2008, the Labour Government said they intended to consider the evidence about the working of similar provisions in Scotland, which were introduced in the Family Law (Scotland) Act 2006. In 2011, the coalition Government suggested that, at that stage, the Scottish research was inconclusive and that the Government did not intend to implement the Law Commission’s recommendations in that Parliament. In the well-known case of Gow v Grant in the Supreme Court on the Scottish Act, the noble and learned Baroness, Lady Hale, now president of the court, said:

“The main lesson from this case, as also from the research … to date, is that a remedy such as this is both practicable and fair… It does not impose upon unmarried couples the responsibilities of marriage but redresses the gains and losses flowing from their relationship”.

She concluded:

“‘The Act has undoubtedly achieved a lot for Scottish cohabitants and their children’. English and Welsh cohabitants and their children deserve no less”.

The evidence from Scotland has been overwhelmingly positive. Ireland introduced similar legislation in 2010. Other jurisdictions with similar protections include Australia, New Zealand, Canada and some states in the US, yet still the Government have dithered.

As recently as November 2018, Lucy Frazer, Parliamentary Under-Secretary of State at the Ministry of Justice, stated in a Written Answer:

“The Government’s current priorities are to reform the law on the process for obtaining a divorce in order to reduce family conflict and to extend civil partnerships to opposite sex couples. The Government will be considering how to proceed in relation to proposals made by the Law Commission in the context of any further reforms to the family justice system”.

I simply do not accept that it is not possible for the Government, given the necessary political will, to introduce three desirable and laudable reforms, rather than just two. These proposals have the overwhelming support of family judges, of Resolution, which represents family law solicitors, and of the Family Law Bar Association. It is high time they were implemented. I beg to move.

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