My Lords, more and more people now choose to live together before or instead of getting married or entering into a civil partnership. In 1996, there were fewer than 3 million people cohabiting in the United Kingdom. By 2013, the figure had almost doubled to 5.9 million. More cohabiting couples—about 38% of them—are having children. The trends are clear: people are choosing to live together and often to build families together as an alternative to getting married or entering into civil partnerships. That is a clear life choice that they make, and it is mark of a free society that we accept and indeed embrace our freedom to choose how we live and with whom we live. This Bill is designed to right injustices that have long bedevilled our law and to ensure that people who live together will not be subjected to an unfair and invidious disadvantage by so doing.
There persists widespread confusion among the public about the legal status of cohabitants. In a British Social Attitudes survey in 2006, no less than 58% of respondents thought that cohabiting couples who split up were probably or definitely in the same position as married couples. The myth of the so-called common-law marriage is widespread—but, as your Lordships are well aware, it is just that: a myth, without any foundation in law. In 2008, a further British Social Attitudes survey found that nine out of 10 people believed that cohabitants in a long-term relationship involving children, or where career sacrifice was involved, ought to have redress on the breakdown of their relationship. Yet, at present, unless they have entered into a cohabitation agreement, the protections for couples who part are extremely limited. As to the property they live in, if it is in the name of one partner,
the other may secure an interest only if he or she can bring a case based on the antiquated and unwieldy law of trusts by showing that joint ownership was their joint intention. The ascertainment of the parties’ shares remains difficult, even where the property is in fact in joint names. The last major decision on the issue of intention, that of the Supreme Court in 2011 in Jones v Kernott, has made the position no easier.
Minor children are entitled to support under the Child Support Act, and the children of wealthier parents under Schedule 1 to the Children Act 1989. However, support ends when the children are older. At that stage, the caring parent may be left completely unsupported and often out of a home. Cohabitants may also secure some provision on death under the Inheritance (Provision for Family and Dependants) Act 1975, which I shall refer to as the 1975 Act. That was a welcome reform made in 1995, but the provision for cohabitants is limited to maintenance and it is necessary for the surviving party to go to court to establish a claim.
However, on separation, there are no legal rights at all for the woman who has given up her career to look after her partner’s children—or their joint children—once they are older and independent. There are no rights for the woman who gives up working to keep house for her family and then does so for many years before the relationship breaks down. There is no redress for the man who has worked for years and used up his savings to help establish his partner’s business and is then left with nothing when they break up. Then again, if one partner dies without leaving a will, the other will inherit nothing as of right from the estate—not even the home they lived in together.
The Law Commission’s proposals on separation were made, after a long and detailed consultation, in 2007, and those on intestacy in 2011. They were thorough and carefully considered. As your Lordships well know, the Law Commission was set up by Parliament to recommend necessary law reforms to government. It is an entirely independent body with a stated mission: to keep the law fair, simple and modern. Despite repeated pleas from the professions and from the judiciary at all levels to implement the commission’s proposals in this area, no action has been taken.
The Bill is limited to implementing the Law Commission’s proposals made in its two reports. I make no claim to originality in presenting these proposals. My noble friend Lord Lester of Herne Hill introduced a similar Cohabitation Bill in 2008. I pay tribute to him for his vast achievements in the area of law reform, and I am delighted that he is here and able to speak in the debate today. My noble friend’s Bill went rather further than this one, because it included provision for continuing maintenance, which the Law Commission’s proposals and this Bill do not. My noble friend also introduced a Bill incorporating the Law Commission’s proposals on intestacy in 2012.
I turn first to the proposals for relief on separation. I make it clear at the outset that the Bill’s proposals do not equate cohabitation with marriage—far from it. For many would-be reformers, the Bill is for that reason a disappointment, because it proposes perpetuating what they would call a two-tier system of financial
provision, with one regime for those who marry or enter a civil partnership and another for those who do not. I do not share their view. I firmly believe that when two people commit to marriage or civil partnership, they commit to full financial interdependence—a commitment which demands that there be a comprehensive range of remedies in the event of divorce. However, when people decide to live together without taking on the obligations of marriage or civil partnership, that is their choice, and they should not have those obligations thrust on them by the state.
That does not mean that where a cohabiting relationship breaks down, there should not be a mechanism to adjust the economic impact of the relationship so as to share it more fairly between the parties. Essentially, and simplifying them to the core, the Bill’s 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.
Scotland has a cohabitation law, and has had one similar to that proposed in the Bill since 2006. Ireland introduced similar legislation in 2010. The noble and learned Baroness, Lady Hale, our one woman Supreme Court judge—how regrettable it is that she is still the only one—said in July 2012, in a significant case under the Scottish Act in the Supreme Court called Gow v Grant:
“The main lesson from this case, as also from the research so far, 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”.
The noble and learned Baroness concluded:
“The Act has undoubtedly achieved a lot for Scottish cohabitants and their children. English and Welsh cohabitants and their children deserve no less”.
It is not just Scotland that has similar legislation. Australia, Canada, New Zealand and many other jurisdictions have strong arrangements by statute for cohabitants who separate.
Perhaps I may describe in broad terms some of the more important provisions of the Bill. By Clause 2, cohabitants are defined as a couple who either have children and live together, or who have lived together as a couple for two years. By Clause 6, the parties can by agreement opt out of the financial settlement provisions of the Bill, provided that requirements for independent legal advice and other safeguards are met. 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. So this scheme would not be compulsory; the parties could choose to make alternative arrangements. By Clause 7(3), there would be a two-year time limit for bringing a claim following separation, so that such a claim would not hang over the heads of the parties indefinitely.
Clauses 8 and 9, and Schedule 1, set out the scheme of the financial settlement proposals. The starting point is for the applicant to show “qualifying contributions” to the parties’ shared lives. These could be financial or they could be in work, in care or in kind. If, as a result of such contributions, the other party had derived and retained a benefit, or the applicant had suffered or would in the future suffer “an economic
disadvantage”, the court would be empowered to intervene to award a financial settlement. Such an award would first reverse any retained benefit, in full or in part. If after that exercise, the applicant would still be left with an economic disadvantage, the court could order that disadvantage to be shared between the parties. The court would be required to consider discretionary factors, the welfare of any minor children of the parties being the first consideration.
The financial position of each party would of course be crucial. Conduct which it would be inequitable to disregard would be taken into account and the circumstances in which contributions were made would be important, especially where they were discouraged rather than sought by the other party. The orders that could be made would include capital orders for lump sums, property or pension-sharing but not continuing maintenance. The lump sums could be payable by instalments. It may be argued that this would encourage litigation between former cohabitants but I would expect most cases to be settled by agreement, without coming anywhere near a court. Furthermore, mediation will play a large part in resolving such cases.
I turn to the proposals on the death of a cohabitant. I will deal just with the most important provisions. Clauses 16 and 17 would enable cohabitants to insure each others’ lives and write policies for the other partner’s benefit, so as to fall out of the deceased’s estate for inheritance tax purposes. Clause 19 would enable the survivor of a cohabiting couple to inherit an interest in the estate of a partner who died on an intestacy. This is an important provision. The Law Commission’s research has shown that only 17% of people who are cohabiting make a will. The other 83% are vulnerable to death and intestacy. Of course if that provision is not required by a cohabiting couple, they are free to make their own wills, just like everyone else.
In relation to the home in which parties live, research has shown that most cohabiting couples would hope and expect that their partners, surviving in the house that they shared together, would be the people to whom the house would pass on their death. Clause 20 would thus ensure that a surviving cohabitant could make a claim to the parties’ joint home. By Clauses 21 and 22, and part of Schedule 2, cohabitants’ claims under the 1975 Act would no longer be limited to claims for maintenance, as they currently are under the 1995 amendment.
The previous Administration were sympathetic to the aims of the Law Commission’s 2007 report, but wanted to consider how the new law was working in Scotland. As the noble and learned Baroness, Lady Hale, made clear in Gow v Grant, it is now absolutely apparent that the law in Scotland is working well. When I asked the present Government about this in 2011, they issued a Written Statement saying that they would do nothing during the term of this Parliament. However, this Parliament is nearing its end, while the need for reform in this area becomes ever stronger.
It has been a long time since the Law Commission’s two reports, particularly the 2007 report on relationship breakdown, but the trends have not changed and the injustice has not decreased. Although the noble Baroness,
Lady Deech, has been a formidable campaigner against these proposals, particularly when my noble friend’s Bills have been debated—I am delighted to see that she is here to make her case again today—there is a powerful body of both professional and lay opinion in favour of these reforms: most of the family judiciary; Resolution, the body that represents family solicitors and for whose strong support I am particularly grateful; the Family Law Bar; and many others, including many in the church. I am delighted to see the right reverend Prelate the Bishop of Sheffield here today to speak in this debate. I suggest that legislation is now overdue, and this Bill attempts to redress the position. I beg to move.
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