Thursday, 23 March 2023

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Half-century-old divorce law on asset splitting set for review

Half-century-old divorce law on asset splitting set for review

The UK government is set to commission an extensive review of 50-year-old legislation that determines how financial assets are split after divorce in England and Wales.

The Matrimonial Causes Act 1973 has been criticised as uncertain and unpredictable with spouses often turning to costly litigation due to a lack of clear guidance on how wealth should be divided.

Lord Christopher Bellamy, justice minister, has signalled he plans to ask the Law Commission, the independent agency which reviews legislation, to examine whether the act needs updating with further announcements expected “very soon”.

London has become a magnet for wealthy couples seeking a divorce in recent decades because of the generosity of financial awards given to ex-wives by the courts in the capital.

The English legal system tends to split the combined wealth of divorcing spouses equally even if one partner is the breadwinner in contrast to many other European countries, where financial awards are far less generous and maintenance is only given for a limited number of years.

However, under the current law, spouses who go to court can spend thousands of pounds on fees because legal aid is no longer available for most types of family law, and the drawn-out court battles can be detrimental to children.

Baroness Fiona Shackleton, a peer and leading divorce lawyer who has represented clients including King Charles, Princess Haya and Paul McCartney, told the House of Lords this month the law was “hopelessly” outmoded as it relied “entirely on finance and the discretion of judges”.

She added: “Divorce practitioners like me make a fortune in arguing, because the guidelines are 50 years out of date.” 

Prenuptial agreements — legal documents specifying how assets are to be divided when the marriage ends — are now recognised by the courts following a seminal 2010 Supreme Court involving German paper industry heiress Katrin Radmacher.

But legal experts believe these contracts should be put on to a more formal, statutory footing and enshrined in law.

German heiress Katrin Radmacher outside Britain’s Supreme Court after winning a decision regarding the prenuptial agreement in October 2010 © Luke MacGregor/Reuters

Others complain the legislation, which has been subsequently developed by judge-made case law, allows judges to use their discretion to assess each case and make different awards, creating uncertainty.

Judges have flexibility when it comes to allocating settlements…

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