Family Law

Matrimonial property rules cannot be maintained says family lawyers group

Law Commission was backed by the Resolution on need for reform to avoid postcode lottery saying that the current laws on matrimonial property was not sustainable policy choice and the rules should be reformed on a principled basis.

The Family Law Bar Association yesterday questioned Law Commission’s plans to introduce a “clear, principled basis” for sorting out disputes, warning that they could make settlements harder to achieve.

Responding to the commission’s consultation on matrimonial property, Resolution said it shared concerns of the commission about the lack of an ‘objectives clause’ in section 25 of the Matrimonial Causes Act 1973.

The family lawyers group said there were currently “wide differences of approach” in the way courts across the country dealt with disputes, resulting in a “postcode lottery” on orders for periodical payments raising difficulties in advising some clients, but also the issue of forum shopping.

An expert practitioner would have the knowledge of whether a particular court would transfer a matter back to the home court and the possibility of a different type of order likely to be made against the home courts orders.

Resolution said that unreliable evidence meant that clients were more likely to get a joint lives order if the matter was heard at the Principal Registry of the Family Division in London rather than a less generous order if issued in Birmingham.

The family lawyers group stressed that litigants in person were unlikely to make a starting point for the payment of spousal support from section 25 of the MCA in principle or guidance. The group said that principled reform should take the place of a “reformed discretionary approach” rather than a formulaic calculation.

It favoured “non-absolute limits” on the extent of financial support for former spouses, both on the percentage of net income one should pay the other and the length of time the payments should last.

The group illustrated that the limits should not cause hardship to wives over 55 years of age who have not worked during the marriage. It also said that there was merit in reform to prompt the courts to fully and properly consider the exercise of their powers. The courts normally ignore question of any increase in earning capacity which should be reasonable for a party to expect to take steps to acquire.

Resolution said courts should be under a stronger obligation than that contained in section 25(a) of the MCA to decide whether it would be possible for support to be terminated, but the hardship rule should be retained. A term order could encourage increasing income and earning capacity and recognise the vanishing of the historic gender imbalance in earning capacity.

Resolution added that there could be guidance warning clients not expect to get ‘half’ of the other party’s income, “to provide more certainty, soften the unrealistic expectations of some claimants and avoid discouragement to payers making them seeking to reach agreements on their own or in mediation.

Family Law

Offshore holiday homes become a millstone in the necks of divorcing partners due to falling value of the property

Family lawyers have warned that the Euro crisis has had tumbling effect on property values across the EU leading to holiday homes becoming into a toxic legacy for couples who are in the midst of divorce.

Number of cases that are currently on the pipeline centre around the question of which partner would be taking on the villa in Spain, Greece or Italy rather than who would not.

One family lawyer described the task of dividing the assets between warring couples who own a holiday home as like a game of pass the bomb.

Case notes in one separation being negotiated currently include discussions about how to deal with a ‘dead duck’ villa in Spain which has lost its value but still has a hefty mortgage to service and little prospect of being sold.

Another case has a couple who are wrangling over what to do with a house in Cyprus which was now worth £53,000 less than its original value, and after calculating currency exchange issues and steep local taxes to transfer ownership.

In other cases, the added complexity of disposing of a property abroad has become a weapon used by one side or the other in already acrimonious splits.

One British divorcee is being forced to go through a lengthy legal challenge in France to recover proceeds from the sale of their former home, awarded to her by an English court but being withheld by her ex-husband.

A partner of family law solicitors firm said that fighting over overseas houses had become one of the biggest headaches in divorce proceedings in the last year.

The firm estimates that at least one in six of its cases involve the division of domestic and foreign property.

When everything is going well in a family it feels really great to own a property abroad but as soon as the relationship becomes rocky the same assets become a disaster the lawyer said.

The lawyer said that she always encouraged her clients to get rid of property abroad or let the other side have it because they are more trouble than they are worth. They become millstone around the neck of a divorcing partner’s neck.

She added that the majority of people who’ve got these second homes in places like France and Spain, were not the super-rich they but just normal middle class families who could managed to purchase a holiday home.

Another partner of the firm added that some divorcees who received Continental homes before the financial crisis have attempted to “unpick” the terms of their settlements in light of the crisis but were rebuffed by the courts.

Divorce Law

A demand by Iain Duncan Smith may bring a new Coalition row

The Works and Pensions Secretary has demanded that the government introduce a tax break for married couples.

Iain Duncan Smith wants George Osborne to make changes by next year’s budget to show the government was serious about promoting marriage.

The idea of giving a tax break for married couples was a key Tory manifesto pledges which if not carried out would let the public dismiss as tokenism, Mr Smith has said to have warned David Cameron.

It is being feared that the pledge which the prime minister said would be honoured by 2015 was going to fall by the wayside unless implemented soon.

But the problem lies within the coalition with the Lib Dem leader Nick Clegg opposing it by accusing the Tories that it was trying to create the 1950 model of suit wearing, bread winning dad and apron clad home making mother.

Mr Cameron championed the idea of a marriage tax break when in opposition, although the proposal was watered down to the point where it would be worth only about £150 a year to most.

He said encouraging marriage would help in avoiding divorce proceedings as it would encourage more couples to stay together and produce greater stability for children.

The move was bitterly opposed by the Lib Dems, who argue it was wrong to favour marriage over cohabitation. The Coalition agreement allows them to abstain on any vote on the issue, and gives priority to their tax plan of raising the income tax threshold to £10,000.

Mr Duncan Smith received an unstinted support from the Bishop of Chester. Peter Forster said recognition of marriage in the tax system was one way of sending a ‘powerful symbolic message from government into society, and stress the importance of marriage in the society.

He argued that good marriages were not just a benefit for the couple themselves, and their children, but serve to strengthen the wider society of which they are a part.

A strong respect for marriage would actually support single parents, and others who have the care of children.

Speaking in a House of Lords debate on child development, the bishop urged ministers to act without delay, adding that there would be some changes needed to be carried out to implement the issue before the next budget it would become an unfulfilled pledge of the government as the next election would approach.

Former Tory Lord Chancellor Lord Mackay of Clashfern also urged the Chancellor to act swiftly in the interests of children.

Ministers have not specified exactly how the pledge to recognise marriage in the tax system by 2015 will be implemented.