A Fairer End to Relationships: the reform of financial remedy claims

The Government's consultation is called A Fairer End to Relationships. It could see the most significant reform of family financial law for decades, taking the principles we argue about every day and writing them into statute. Its favored model is termed 'codification plus.'

Under the proposals, sharing and needs would become statutory principles anchored to an express objective of achieving a fair outcome. 

Equal sharing of matrimonial property would become the express starting point, with the ability to adjust that equal division to meet needs. We are promised statutory definitions of matrimonial property, non matrimonial property and matrimonialization, drawing directly on the Supreme Court's reasoning in Standish v Standish [2025] UKSC 26. Clear guidance will be needed here so that couples can understand what is and what is not matrimonial property, how property can be matrimonialized and how, for example, post-separation accrual should be categorized.

These definitions would work alongside a three-stage hierarchical approach:

1. the first consideration being the welfare of any children; 
2. the next consideration being how 'basic needs' (including housing and pensions) would be met;
3. and then, and only where resources permit, further 'discretionary needs' would be considered. These are said to be lifestyle ‘luxuries’ (e.g. expensive cars or designer items including clothing or accessories). But what might constitute a luxury for one family could be a standard expense for another, and there is also concern that having to discern between needs and luxuries risks polarizing separating couples and would not protect the vulnerable, which is one of the main aims of the consultation.

'Needs' are intended to be assessed by reference to standard of living and not limited to those arising directly from the relationship (and so should include all needs arising from wider circumstances, such as illness or disability). 

Some concern has been raised about whether putting the focus on sharing available matrimonial assets equally first, rather than encouraging couples to focus first on needs, could inadvertently cause separating couples to assume that all matrimonial property should be shared equally and that 'sharing trumps needs'. 

However, the Government's approach on that reflects the current law, and maintains the cross-check of making sure needs are met so others feel there are sufficient safeguards built in.

As for 'matrimonialization' (i.e. the process by which non-marital property becomes matrimonial), the proposal uses wording from the judgment from Standish (above), namely that where there is a dispute as to whether property is matrimonial or the court should consider relevant factors, including how the property has been used, shared and treated by the couple over time. For example, if one partner receives inheritance that is used to fund improvements on the family home years before the breakdown of the marriage, the inheritance could have been 'matrimonialized'. The concept is nuanced and fact-dependent and so codification of it could be challenging.

Decades have been spent distilling what 'needs' actually means. It is elastic and varies from case to case, so carving into tidy tiers may not work in practice.

I am pleased to see that pensions, so frequently overlooked in divorce cases, are included as a basic 'need'. And, whilst compensation is disregarded as a statutory principle, disadvantage suffered as a result of the relationship is included as a new section 25 factor. This is likely to raise questions about what it should cover and how it should be pleaded in the future. 

The aim is to make the law clearer, more accessible and better able to protect vulnerable individuals. The challenge is achieving that through a codification-plus-model framework while preserving the flexibility and discretion of the current system, which are often the very features that provide the greatest protection to the most vulnerable.