Written evidence from The Law Society of England and Wales [HAB0368]

 

 

  1. Summary

 

1.1.            The Law Society of England and Wales is the independent professional body that works globally to support and represent 200,000 solicitors, promoting the highest professional standards, the rule of law and access to justice. 

 

1.2.            Solicitors play an important role in supporting and advising on legal rights.  As an organisation, the Law Society has a public interest role in ensuring the law is applied fairly and that anyone who needs justice can access it.

 

1.3.            This response outlines some of the key areas to consider when looking at the rights of cohabiting partners.

 

1.4.            Cohabitation has become increasingly common, yet our members tell us that many people are unaware of their rights in this situation.  Many rely on the incorrect assumption of a common law marriage, when in law there is no such thing

 

1.5.            This common misconception can result in confusion when there is a breakdown of a relationship between cohabitees or upon the death a cohabiting partner. It is at this difficult time that cohabitees may realise that they have few legal protections, and some can find themselves in a vulnerable financial position.

 

1.6.            The law that does exist for cohabitants is fragmented and, in some cases, non-existent. Reform is needed to provide a structured, rational system which reflects modern society.

 

1.7.            We are of the view that cohabitants should have some redress in the event of a relationship breakdown, when their financial and property rights need to be adjusted so that no one suffers financial disadvantage as a result of having shared a home, income and the upbringing of any children with another person.

 

 

  1. Should there be a legal definition and, if so, what should it be?

 

2.1         The Law Society considers that there should be a legal definition of cohabitation.  A definition, enshrined in law, ensures that cohabitants, and all professionals or institutions they may have reason to interact with, clearly understand the status of their relationship.

 

2.2           However, in drafting a definition, consideration must be given to the impact across all areas of life and law, including property law, landlord and tenant law, immigration law tax law, and of course, family law. We would suggest there be a framework for resolving disputes about whether a cohabitant relationship does or did exist and consideration on the impact of potential new litigation in terms of use of court resources where the court system is heavily over-burdened.

 

2.3           The Law Commission’s 2007 report on cohabitation[1] offers a good starting point, such as a minimum period of cohabitation and other criteria for demonstrating a committed relationship.  However, the criteria set out in that report may need to be reviewed to ensure any definition reflects modern and diverse attitudes and relationship models. Cohabitation can mean different things to different couples and does not necessarily demonstrate commitment or mutual dependence.

 

2.4           There are existing definitions used in other areas of our law, such as in social security legislation, from which family case law has drawn non-exhaustive criteria for determining the existence of cohabitation with a new partner post marital separation which include:

 

 

­        A child who is the parties’ child biologically;

­        A child adopted by either party and raised as a child of the couple during their relationship;

­        A child in respect of whom there is a joint residence order in favour of the parties;

­        A child born to either of the parties as a result of assisted reproduction licensed under the Human Fertilisation and Embryology Act 1990 during the relationship; or

­        A child born as a result of a non-commercial surrogacy arrangement between the parties and a surrogate mother.

 

 

2.5           We appreciate that because of the diversity of arrangements that can qualify as cohabitation, no definition will be finite but taking the above factors into consideration will ensure that any definition is clear while still allowing sufficient flexibility as far as possible to provide fairness.

 

2.6           In addition, consideration needs to be given as to whether cohabitants will need to formally register their relationship status and whether there will be an option to opt in or out.

 

  1. What legislative changes, if any, are needed to better protect the rights of cohabiting partners in the event of death or separation?

 

3.1         Cohabitants have little or no protection under the law in the event of relationship breakdown or death. The rights under the law for marriage and civil partnership do not apply yet many cohabitants wrongly assume that they do if the partners have been living together for a certain period of time or if there are children from the relationship.

 

3.2         Under the current framework, if cohabitants want to formalise their intentions around property, finances and how they would support their children if they split, then they can draw up a cohabitation agreement.    However, both parties would have to agree and opt into this. There is also the risk that the agreement may not afford each party equal rights, with the financially stronger partner having an advantage.

 

3.3         Any proposed definition or framework of rights and protections must be looked at holistically so that it does not have unintended consequences on other areas of law. Some areas to consider would be:

 

 

3.4         Some couples may choose to cohabit rather than register their relationship more formally by marriage or civil partnership.  In recognition of this it would need to be determined whether cohabitants should be required to register their relationship (opt – in) or be able to opt out of any protections or legal frameworks that are established.  This again may open up questions about the potential for undue influence or duress if one party is pressured into opting out by the other, or does not realise the implications of doing so.

 

3.5         Child maintenance

 

3.5.1              Schedule 1 to the Children Act 1989 provides for the court to make financial provision for children by making:

­        Periodical payments orders (limited by the Child Support Act 1991)

­        Secured periodical payments order

­        Lump sum orders

­        Settlement of property

­        Transfer of property orders

3.5.2              Government will need to consider what applications under Schedule 1 should be available to cohabitants, such as whether an ex-partner should be permitted to make a maintenance claim outright as well as a claim as a parent to a relevant child of the relationship, and whether any claims as a parent are forfeited once the parent enters a new cohabitating relationship.

 

3.5.3              Another consideration might be whether a child of one partner would be able to issue a claim against their parent’s ex-partner after relationship breakdownIf such claims were permitted, then there would need to be thought given to whether time limits should be imposed.

 

3.6         Tax Law

 

3.6.1              Tax law currently distinguishes in various ways between married couples and civil partners, on the one hand, and cohabiting couples on the other. There are a number of tax reliefs that apply to spouses and civil partners in the event of death or separation, but not to cohabitants. These reliefs include: stamp duty land tax relief on transfers of real property between spouses and civil partners when the relationship breaks down; capital gains tax relief for transfers of assets between spouses and civil partners on separation; and exemption from inheritance tax on transfers between spouses and civil partners made on death.

 

3.6.2    For tax purposes, both marriage and civil partnership are statuses that are

straightforward to recognise. It is likely to be more difficult to define and determine the beginning, existence, and end of a cohabitation relationship as opposed to a marriage or civil partnership.  Therefore, careful consideration would need to be given to these definitional issues should there be any extension of tax reliefs to cohabitants. It would be important to ensure they are introduced in a way that is sufficiently certain and avoids unintended effects.

 

3.6.3                  Any changes in legislation would also need to be considered in the context of existing and connected areas of law as touched on above.

 

 

  1. What equalities issues are raised by the lack of legal protection for those in cohabiting relationships?

 

4.1         Family life has changed dramatically in recent years. Many people choose to cohabit rather than marry or enter into a civil partnership. Many also have children outside these formal arrangementsPeople may face inequality, financial hardship and emotional distress because the law does not always reflect these changed relationship and family models.

4.2         Data from the ONS shows that there are almost 2 million more cohabiting couples in 2020 than a decade ago.[2] Relationship breakdown is a significant financial risk for women in particular, many of whom are made vulnerable by joint decisions made while they were in long-term relationships, such as pausing or giving up their careers to raise children. Research also suggests that the average man accumulates five times the pension pot of the average woman.[3] 

4.3         Although cohabiting is most common among younger age groups[4], the rate at which over 65s preferred to live as cohabitants trebled between 2002 and 2015[5]. This is significant as it leaves younger couples who make contributions towards ‘joint’ assets in one partner’s name without a strong claim once the relationship breaks down. For older couples, they may find themselves with no claim to their partner’s pension should their relationship end. A 2018 Age UK[6] report mentions the experience of two women who both paid into their husband’s pension via a joint account and found they lost this investment when they got divorced.

4.4         People with uncertain immigration status may be more likely to enter in cohabiting relationships where their immigration status prevents them from entering into a legally valid marriage. Already vulnerable as a result of this status, they may be financially exploited by partners by having assets purchased jointly, or by funds being placed solely in their partner’s name. Upon relationship breakdown, they may be unable to demonstrate their financial contributions and therefore struggle to show their interest in assets enjoyed during the course of the relationship.

4.5         Non-discrimination between the roles the parties adopt during a relationship in terms of earning and caring responsibilities and relationship-generated disadvantage are well-established concepts in the context of financial remedies on divorce or dissolution of a civil partnership, dating back to the case of White v White [2000] UKHL 54, and are widely recognised in divorce settlements.  

4.6         However, for cohabitants, decisions made during the relationship, often about bringing up children or caring for elderly relatives, or perhaps caring for a partner who has a disability, may mean that the economically weaker party’s future financial position has still been significantly compromised. The financially vulnerable cohabitant has no ability to pursue a claim for a share of assets in the other person’s sole name, unless they can rely on complex trust principles to establish a beneficial interest.

4.7         It is not possible to make a claim in relation to pensions, outside of divorce/dissolution proceedings, to compensate a cohabitant who does not have their own retirement fund because they haven’t been working. Nor can they make a claim for maintenance save for the upkeep of a child and then within possibly limited parameters via the Child Maintenance Service.

4.8         As women still tend to undertake the majority of caring responsibilities in relationships, the lack of effective remedies disproportionately affects them and therefore the present state of the law is arguably discriminatory.

4.9         Where a couple has a religious marriage which is not recognised in this jurisdiction, there are significant implications upon the breakdown of that relationship, because they are not treated as married.   The couple will be treated as unmarried and in the same way as cohabitants who have little or no legal protection when they separate regardless of the length of the relationship or whether they had children or property together.  

  1. Should legal changes be made to better provide for the children of cohabiting partners?

5.1         The Law Commission has been recommending that there should not be discrimination between children of married and non-married partners since 1982.[7]

 

5.2         A legal framework of rights and responsibilities when couples who live together split up, taking into account relationship-generated disadvantage experienced by one parent as a result of the presence of children, and making some provision for limited ‘spousal type’ maintenance for that parent, would also benefit the couple’s children.

 

5.3         Where there are minor children of a cohabiting family it is possible for an application to be made under Schedule 1 of the Children Act 1989 for financial provision for the benefit of the children during their minority. The court can make orders for maintenance, lump sums and the transfer or settlement of property.

 

5.4         However, in practice, many children, or parents on behalf of their children, are excluded from the scope of Schedule 1.  Applications tend to be where the economically stronger party has an income over £156,000 gross per annum and so is outside of the jurisdiction of the Child Maintenance Service. Outright transfers of property are extremely rare even in “big money” cases.   The needs of children in smaller money cases are rarely addressed.

 

5.5         Unlike financial remedies in the matrimonial/civil partnership jurisdiction, the child’s welfare is not listed as a factor the court is required to consider, although in the leading case on Schedule 1 claims Re P (A Child (Financial Provision) [2003] 2 FLR 865 the court said that the welfare of the child while a minor, while not paramount, is a very relevant consideration as one or all the circumstances of the case.

 

5.6         Schedule 1 is some 32 years old and was conceived against a background of the so-called ‘bastardy laws, which were only repealed with the Family Law Act 1987. Society and the ways families are formed and live their lives have altered drastically in that time, and it is appropriate that the legislative framework is now reviewed to provide a more accessible, flexible and fairer system to properly meet the needs of children of a cohabiting relationship.

 

5.7         An extension of the duration of the orders available (and possibly the range of orders) and the criteria to be considered on an application under Schedule 1, could provide a relatively straightforward legislative safety net for the children of those left most vulnerable on relationship breakdown.

 

  1. Should cohabiting partners have the same rights as those who are married or in a civil partnership?

 

6.1         A key point to consider here is that some of those entering into cohabitation do so intentionally to avoid the more formal registration of a relationship that takes place with a marriage or civil partnership.

 

6.2         There are any number of reasons why people may choose this relationship model and the key thing is to ensure that there is clarity around rights in this situation and that cohabitants are not unfairly disadvantaged should the relationship end.

 

6.3         There also needs to be more public understanding to dispel the incorrect assumption of a ‘common law marriage’ which leaves many unmarried couples at a disadvantage when a relationship ends.

 

  1. Are there examples of good practice in relation to the rights of cohabiting partners in the UK or internationally that the Government should seek emulate in England and Wales?

 

7.1         There are examples of legislation protecting some rights for cohabiting partners in the UK and internationally, such as in Scotland (The Family Law (Scotland) Act 2006 abolished irregular marriage and introduced rights for cohabiting couples - s29), Australia (Australian law recognises and safeguards cohabitants under the Family Law Act 1975) and Sweden (cohabitation is regulated in the Cohabitation Act 2003) for example.  England and Wales need also to introduce legislation to protect cohabiting partners and any children, on relationship breakdown or death.

 

7.2         However, we would echo Resolution’s assertion that any new legislation should ‘provide clarity, be fit for purpose and useful i.e. it must help people in this jurisdiction’ and would be wary of simply emulating the law of other jurisdictions, even if those jurisdictions are within the United Kingdom. 

 

7.3         Different jurisdictions may have differing demographics, social security systems and legislative frameworks.  A comprehensive evidence base about the extent of cohabitation in England and Wales, as well as wider informed consideration regarding the diversity of the population, is vitally important when considering the creation of policy in this area.

July 2021

 

 

 

 

 

 

 


[1] Cohabitation: the Financial Consequences of Relationship Breakdown

[2] Families and households in the UK: 2020

[3] The Chartered Insurance Institute illustrates https://www.cii.co.uk/media/7461333/risks_in_life_report.pdf 

[4] Data from the ONS shows 69.2% of those aged 16-29 are cohabitants

[5] Age UK, For love and money: Women's pensions, expenditure and decision-making in retirement

[6] Age UK, For love and money: Women's pensions, expenditure and decision-making in retirement

[7] Family Law: Illegitimacy, Law Com. 118 (1982).