Does Family Law Need A “Legal Shake Up”?

In this blog, FLiP Director James Pirrie responds to an article by the Financial Times with regards to the Law Commission’s anticipated review of the way in which a couple’s finances are dealt with upon divorce. James has previously written on this subject which can be found here.

In my experience, and in the hands of expert professionals, family law is an efficient tool that provides fairly and appropriately, in particular to protect the needs of children and the vulnerable, where resources are tight.

There is a danger in making policy that has been impacted by survivorship bias or that is populated by the example of the outlier case.  That is often what we do when we think about the problems of our divorce laws from the perspective of reported cases or from the perspective of “the uber rich” to quote Lucy Warwick-Ching’s article in FT Wealth (28/08/23) found here.

Holding in mind the often enormous costs of family court proceedings that reported cases involve, it is bound to lift them into the category of the unusual.

• It is more usual, where you are able to see clearly that more will be spent on the process than stands between the parties, that agreements can be reached.
• It would only be where disclosure is poor (had expected to be put right at a final hearing) or there was intransigence from one person or the combination of circumstances was just very unusual that agreement would elude the well represented.

If we were looking for improvement, it would be to introduce changes that would make cases easier or more likely to settle – (or, to put it another way, it would be made prohibitively dangerous for parties to continue in litigation without clear justification).  With things as they stand, the tools that a reasonable person has to achieve conclusion might be thought of as pretty limited:

• they can make an open offer.
• they can try to negotiate but ultimately capitulate if they make no progress.
• they can return to the marriage.
• they can go through the court process.

The open offer can be an effective tool but it is not always sufficient to see cases resolve.  For example, it may impact upon the judge’s discretion: they will quite often think “well if this person was prepared to settle for this then perhaps it is OK that they receive a little less…”  Where resources are fewer, the judge may ultimately refuse to make an award of costs because of the devastating impacts upon the party who did not take the other’s offer to settle.

Until the noughties we had the option of the hidden or “Calderbank” offer. Here:

• each side could make an offer that was hidden from the view of the court until after the court had made its decision.
• the decision itself was then compared to the offer and generally if one person had been offered more than they got at the end of the day then they got to pick up the tab for both sides’ legal fees.

Some judges were on record as hating the system. They would see their careful structure tailored around the needs of the parties reduced to tatters at their feet.  But where your vision is restricted to the case in front of you it is very easy to see the flaws in such a design. Looking more widely it is the risks of this system that promotes settlement: with hidden offers, a really careful look has to be given: the recipient of the offer must say to themselves: “the judge won’t know about this offer. Do I feel so confident about my case that it is reasonable that I push on.”

Those who criticise the flexibility of our current law are perhaps failing to see the way it protects the financially vulnerable and, in particular, protects children, making up to some significant extent for the inadequacies of our child maintenance service (a privilege that sadly those who have not married do not share).  We should be very careful about abandoning our flexible needs-based approach simply because of some very large numbers emerging occasionally from High Court hearings.  Those cases often involve people who have large numbers to divide between themselves and there will usually be enough money to go around.  The fact that high costs are spent in this litigation is often proportionate to the sums involved in the first place.  To reform our system on the basis of these outlier examples is properly akin to a game of pinning a tail on the donkey.