In Scotland, cohabiting couples have certain rights under the Family Law (Scotland) Act 2006, when their relationship ends. Scotland takes the approach that the law on cohabitation should not be overly prescriptive, on the basis that couples have chosen to opt-out of a legislative framework by not getting married. However, it is deemed necessary to have some provision in place which can be relied upon. This includes the ability to apply to the court for financial provision following the breakdown of the relationship.
Since its introduction, this legal framework has been subject to criticism, leading to the Scottish Law Commission conducting an extensive review with a view to proposing recommendations for reform. These recommendations were published in a Report by the Scottish Law Commission on 2nd November 2022, together with a draft Bill which, if passed into law by the Scottish Parliament, would implement those recommendations.
In May 2021, Elaine Sym, Legal Director here at Thorntons, wrote about the Scottish Law Commission’s review of the legal framework of cohabitants rights on separation. In her blog, which can be found here, Elaine identified two main criticisms of the current legal framework. The purpose of this blog is to consider the extent to which the Commission’s recommendations addresses those concerns.
The Current Law on Cohabitation
Under the current law, a cohabitant is defined as either member of a couple who are (or were) living together as if spouses. This involves considering the nature and duration of the relationship and has received criticism for being vague and outdated.
Cohabitants are also provided with a financial remedy upon the breakdown of a relationship, in the event that the relationship ends otherwise than by death. This claim must be made within one year of separation. In order for a claim to be successful, the applicant must demonstrate to the court that they have suffered an economic disadvantage which has resulted in a corresponding economic advantage to their partner. The court’s main consideration when making an award is to offset any imbalance brought about by the relationship. The contributions made by each party and taken into account by the court need not necessarily be economic, which is why these claims can often be difficult to measure.
It is also stipulated that household goods and any allowances paid by either party for joint household expenses stand to be divided equally.
The New Proposals
The reforms aim to provide a “more modern, simpler and fairer scheme for financial provision when relationships come to an end otherwise than on death” by making a series of changes to the current statutory scheme.
Who will be classed as a “cohabitant”?
The definition of “cohabitant” is to be updated and defined as “one of two persons who are (or were) living together as a couple in an enduring family relationship, are aged 16 or over, are not spouses or civil partners of each other, and are not closely related to each other.” This new definition seeks to direct attention to the characteristics of the relationship, rather than defining it as a de facto marriage. The court will be required to have regard to all of the circumstances of the relationship and the draft Bill includes a list of features for the court to consider including whether there is a child of the relationship, the duration of the relationship, and the extent to which the couple lived together in the same residence.
A common criticism of the current legal framework, and one discussed by Elaine in her blog, is that the strict one year time limit for making a claim for financial provision may be problematic in situations where individuals are not aware of their rights. It also leaves little time to process the breakdown of the relationship before starting to pursue court action.
In response to this concern, the Commission has recommended that whilst the one year time limit should be retained, some flexibility should be introduced. The Commission suggests that the Court ought to have the discretion to allow a late claim where special cause can be shown. However, this would be subject to an absolute deadline of two years. Furthermore, the Commission also recommends introducing provision allowing cohabitants to agree, in writing, to extend the one year time limit, to enable them to negotiate with a view to settling their claims for financial provision. In such cases, the time limit for making a claim would be extended to eighteen months from the date that cohabitation ceased but the absolute deadline of two years would remain.
Financial Provision on the cessation of cohabitation:
Another criticism discussed by Elaine in her blog is that it is often difficult to advise clients in these situations. This is because of the level of discretion that a Court has under the current law when making a decision regarding granting an order for financial provision.
It is proposed that the framework should be made clearer and make use of a principled approach. Rather than only being able to award a capital sum, a court could instead choose from a range of orders where such an order is justified by the principles, and is reasonable with regard to the resources of the parties, including an order for a transfer of property, a series of periodical payments made over a period of six months, and incidental orders.
The guiding principles are set out in the draft Bill and include:
- The fair distribution of any economic advantage derived by one cohabitant and the compensation of any economic disadvantage suffered by one cohabitant in the interests of another cohabitant or of a relevant child.
- Short term relief of serious financial hardship. This should be employed only when the hardship is serious and caused by the cessation of the cohabitation, for example, a cohabitant who was dependent on financial support from their partner and urgently needs a place to live. This remedy should only be available in the short-term.
- Fair sharing of economic responsibility for childcare. While a similar provision is contained in the existing legislation, the draft Bill suggests a different approach, whereby the orders available to the court are more expansive and not limited to the cost of childcare. For example, the court could order the transfer of property.
There is also a list of relevant factors to provide clear guidance on the application of the principles. The combined framework seeks to provide a far more comprehensive way of dealing with financial claims arising from cohabitation separation, which will not only assist courts, but will hopefully give clarity to solicitors and individuals in navigating the difficult and emotional circumstances which can accompany such separations.
The proposals outlined in the Scottish Law Commission’s Report, and the accompanying draft Bill, will now be considered by the Scottish Ministers. The Scottish Government may also decide to carry out its own consultation process. Whether any of the recommendations will be implemented therefore remains to be seen. Nevertheless, the Report represents an important step in reforming the legal framework to achieve greater clarity for those in cohabiting relationships.
If you would like advice or further information about cohabitation contact a member of the Family Law team on 03330 430150.