A Fairer End to Relationships: cohabitation on separation

The lack of protection for cohabiting couples on separation and death has been on the agenda for decades. Since 'Mrs' Burns attracted the sympathy but not the help of the court in the 1980s we have been waiting for Parliament to provide much needed protection for cohabiting couples. With previous governments having kicked this can down the road, this is, by far, the closest we have come to real change.

The Government has made it clear that the question is 'what' rather than 'whether' when it comes to law reform for cohabitants, which is very reassuring news for the vulnerable in the aftermath of a breakdown of a cohabiting relationship. The difficulty is that the 'what' is not entirely straightforward.

It is estimated that over 7.2 million people live together in a cohabiting relationship outside marriage or Civil partnership and, in 2022, over half of babies born were born to unmarried parents. By 2031 one in four families are projected to be cohabiting. Those who have reduced or forfeited careers/working hours for childcare responsibilities are especially vulnerable to the lack of financial protection under current law. This is more often than not mothers rather than fathers. Statistical surveys show that n 2019, mothers with children under 14 were six times more likely to reduce working hours than fathers. 

As legal practitioners who see the real and practical consequences of the inadequacy and unfairness of the current law, reform is very much welcomed.

In its consultation, the Government has emphasized that the vulnerable must be protected, children are a priority in any financial outcome, and that the status of marriage must be preserved. So, it seems that reform should provide some financial protection for cohabiting couples on relationship breakdown, but not to the extent that cohabitants are in the same position as their married counterparts.

In essence, the Government suggests that the following framework be made available for separating cohabitants in England and Wales:

• In order to qualify, parties would need to be over 18 years of age and have been in a committed romantic relationship for three years OR have lived together with a child;
• They will have two years to bring the claim;
• Each would keep what they own save to the extent that assets are required to meet need;
• 'Need' would be narrowly defined and does not include 'discretionary need';
• Standard of living would be a benchmark in assessing needs;
• Those needs not directly linked to the relationship (e.g. deteriorating health condition) would also be relevant;
• Compensation would be relevant when assessing needs, as it will be one of the relevant statutory factors which the court would be required to consider;
• A needs-based approach would ensure that the financially weaker party would not be left vulnerable, unable to secure housing or unable to maintain a reasonable standard of living;
• Discretionary needs (which are excluded from cohabitants' claims) are said to be about comfort rather than necessities, and may include, for example, luxury items such as a high-value car, non-essential home improvements or private club memberships;
• All the same claims (for housing, lump sum, pension, maintenance or settlement of property) would be available as on divorce, but provisions of maintenance under the proposals would be exceptional (the examples given are where one there are serious health issues or disability);
• The consultation is clear that, in contrast to their married counterparts, cohabitants would not have an entitlement to 'share' in the assets or wealth accrued by their partner during the relationship;
• Misconduct should be treated consistently by the Family Courts across financial remedy proceedings on divorce and within the proposed cohabitation framework;
• It is an opt-out system (so it applies to all) but in order to opt out, there would need to be an exchange of material disclosure, and each person would need to obtain separate independent legal advice;
• The consultation reiterates that it would not be possible to opt out of TOLATA 1996 claims, which relate to the ownership of property, nor financial claims for the benefit children arising under the Child Support Act 1991 or Schedule 1 of the Children Act 1989.

There are also proposed changes in the event of the death of a cohabiting partner.

We can discern some technical difficulties with the proposed reform, such as how to define cohabitants in a way that is clear and reduces prospect of litigation; and the extent to which the concept that a person must not do better financially than they would have done on divorce, becomes more contentious than the government anticipates. We also query whether the two-year limit on bringing a claim would be a total ban, and what 'material' means when it comes to financial disclosure. Is it realistic to expect everyone who wants to opt out of the cohabitation regime, will want to (or be able to afford) to take legal advice?

There are also some fundamental questions that really need to be answered surrounding, for example, how needs will be defined. The extent to which the reforms truly protect the vulnerable will largely depend on how needs are defined and which 'discretionary needs' are excluded. And why is maintenance provision going to be exceptional, when having insufficient capital to meet the financial needs of two households rather than one, is by no means exceptional, and the data is clear that mothers are more likely to have lower incomes. How can this be aligned with protecting the vulnerable? 

There are many areas to discuss and reflect upon, but we should not lose sight of the overarching point that there is potential here for a huge step forward in terms of protecting the vulnerable. As lawyers we deal in details, but there is also a risk of throwing the baby out with the bathwater if we complicate this to the point where rare governmental appetite for reform in this area is lost for another decade or more.