Financial remedies on divorce

Assessing the reform options for the laws governing finances on divorce and the ending of a civil partnership

The problem

Going through a divorce or ending a civil partnership is often a stressful and hugely consequential period for any couple – for both their personal and family lives, as well as their finances.

Every year, tens of thousands of couples begin proceedings for separation which result in the use of financial remedy orders – orders which determine how their finances are divided after they are no longer together. Financial remedy orders can include the sale and transfer of property, maintenance for spouses, civil partners and children, and the splitting of pensions.

However, the laws which govern the use of financial remedy orders are now several decades old, dating back to the Matrimonial Causes Act 1973, and subsequently mirrored in the Civil Partnership Act 2004.

Half a century after the passage of the 1973 Act, the Government has asked the Law Commission to review whether the current law is working effectively, and delivering fair and consistent outcomes for divorcing couples.

The project

In its review, the Law Commission will carry out a detailed analysis of the current laws on financial remedies, to determine whether there are problems with the current framework which require law reform, and what the options for reform might look like.

The project will consider the financial orders made by courts in England and Wales, as well as the law in other countries. It will conclude by publishing a scoping report in September 2024, which could provide the basis for a full review and future financial remedies reform.

As part of its analysis of existing law, the Law Commission will consider whether there is potential for reform in specific areas such as:

• The discretionary powers given to judges over the division of financial assets, and whether there is a need for a clear set of principles, enshrined in law, to give more certainty to divorcing couples.
• Whether there should be wider powers given to the courts to make orders for children over the age of eighteen.
• How maintenance payments for an ex-spouse or civil partner should work.
• What consideration the courts should give to the behaviour of separating parties when making financial remedy orders.
• Orders relating to pensions and whether they are overlooked when dividing the divorcing parties’ assets.
• The factors judges must consider when deciding which, if any, financial remedy orders to make.

Next steps

The Law Commission has started preliminary work on this project, with the aim of publishing a scoping paper in September 2024.

Terms of Reference 

Read the project’s Terms of Reference (ToR) here.

Background

In 2014, the Law Commission’s report, Matrimonial Property, Needs and Agreements, looked at marital property agreements and other specific aspects of the financial consequences of divorce and dissolution.

As part of the new review, the Law Commission will scope whether the issues covered in the Matrimonial Property, Needs and Agreements project need to be reviewed beyond its 2014 recommendations.

Contact

For general enquiries, you can contact the team at: financialremedies@lawcommission.gov.uk.