News

The government’s recent announcement of a consultation on reforming financial remedies for cohabiting couples has thrown renewed light on the shortcomings of the status quo. In this, the second part of our Cohabitation Rights series, we explore the scope for reform and some potential pitfalls to be avoided.

Following both the Women and Equalities Commission report ‘The Rights of Cohabiting Partners’ of 2022 and Resolution’s 2023 ‘Vision for Family Justice’ report, the need for reform – which was extensively explored in the seminal 2007 Law Commission Report ‘The Financial Consequences of Relationship Breakdown’ – has been brought into sharp focus.

A proposed legislative scheme

The essential pillars in any future change remain a ‘qualifying relationship with a qualifying contribution leading to a retained benefit/continuing disadvantage’. In brief, this means:

- A qualifying relationship: the concept of cohabitation is well known in Family law from divorce matters, so could be comfortably imported – possibly using the six factors of the social security assessment for additional context.

- Duration: at least 5 years together or two with children; which must be concurrent and continuous; financial claims to be brought within 12 months of separation; and

- The qualifying contribution (for example: work in the partner’s business; managing home and finances; care for family members etc.) leading to a retained benefit/continuing disadvantage (for example: a material improvement in the respondent’s capital/professional circumstances; or the applicant restricting/giving up their career).

Any subsequent financial award would then be correlated to the scale of the benefit retained/impact of the disadvantage on the applicant – naturally limiting the potential sum in shorter relationships.

Navigating pitfalls

There are certain challenges to be navigated in implementing reforms along the Law Commission’s lines and later recommendations – particularly around how the legislative scheme for financial remedy is engaged.

Duration

While ensuring the greatest breadth of protection, by automatically engaging the legislative schema after 5 years’ cohabitation (or 2 where the couple share children) it could be argued that this compromises personal autonomy. Moreover, the notional start date for any cohabitation will likely be a focus for significant litigation as courts try and settle the precise point at which a relationship could be determined to start. As the Law Commission’s proposed system requires any cohabitation period to be continuous, it may also lead to a series of tactical ‘break-ups’ to avoid engaging the provisions.

The Opt-out regime

While opt-out by agreement is a suggested remedy, it being based on a public information campaign might mean that public awareness mirrors that of the ‘common law marriage’ myth, which has itself been subject to extensive public information campaigns. Moreover, part of the court’s discretion in considering opt-out agreements is to set them aside should they lead to manifest injustice. This would lead to the paradoxical situation where couples do not merely drift but are dragged into the regime against their expressed intentions and a decision to opt out should be considered carefully.

On a practical level, any opting regime is also subject to the twin biases of optimism early in a relationship (where at least one of the parties cannot conceive of separating), the ‘self-fulfilling prophecy’ of the opting issue being raised during a relationship and so leading it to founder, and any potential power imbalances (where the more independent party can exert significantly more control in terms of opting out should they wish).

This may be particularly acute where there are wider cultural pressures being brought to bear – perhaps in the realm of ‘religious-only’ marriages. In such circumstances, there is an argument for no opt-in or -out provisions as the couple has clearly demonstrated an intention towards mutual society and support. This may counteract some of the cultural pressures which prevent partners from seeking financial remedies – or being able to opt-in/forced to opt-out of a voluntary regime. Conversely, there may remain a risk of a partner who is seeking a remedy becoming both socially and culturally isolated as a result, thereby limiting exercise of their rights.

Final thoughts

Whatever the result of the consultation, it is clear that reform in this area is long overdue. Nevertheless, it will require a careful analysis of the underlying reasons for the rise in cohabitation in order to develop a new legislative system that clarifies rights and obligations, as well as ameliorating the harsher aspects of the present regime. Moreover, properly targeted, it would expand the protection offered to vulnerable individuals and bring legislation into closer alignment with ius naturale, allowing for a suitable evolution, rather than disruptive revolution.

Sinclair Gibson is a proud home to one of London’s leading family law teams, with extensive experience in advising clients on cohabitation matters and adapting to the ever-changing circumstances of relationships. If you would like to know more, please contact us and a member of our expert team will be happy to assist you.