Will There Be a Growth in Schedule 1 Claims?
Will the growth in the number of children born to unmarried couples (51% in 2021) lead to more claims for financial provision for children and those caring for them being made under Schedule 1 of the Children Act?
This article, written by FLiP Director James Pirrie and Charlotte Bradley, Head of Kingsley Napley’s Family Team, was first published by The Law Society Gazette on 9th June 2023 and can be found here.
Schedule 1 to the Children Act 1989 allows the family court to make financial provision for children. It is most often used in cases where the parents have not been married and have no right to financial support for themselves under the 1973 Matrimonial Causes Act.
Given provision under Schedule 1 claims can be extensive and can include pre-funding of the applicant’s costs, it is perhaps surprising the regime is not used more widely. A total of only 230 Schedule 1 applications were made in 2022 (according to MOJ figures) out of a potential pool of claims probably numbering 180,000 children a year.
With the number of children born to unmarried parents rising (some 51% of children were born to unmarried parents in 2021), the number of Schedule 1 cases will inevitably grow year on year, however the unpredictability of Schedule 1 outcomes is still a concern for many practitioners.
Schedule 1 can help those bringing up children where provision from the child maintenance service (CMS) and limited claims under the Trust of Land and Appointment of Trustees Act 1996 (for an interest in a property) leaves a caring parent (and the children) disadvantaged compared with the other parent’s higher resources and standard of living.
Provision can cover housing, equipping the home, lump sums for one-off items like cars, educational costs and additional maintenance (called ‘top up’ maintenance) where the other parent is a high earner (earning a gross income over £3000 per week).
Centre stage will usually be the budget for the child, standards of living (both during the cohabiting relationship and of the paying parent since) and the extent to which the applicant parent should be contributing to these costs themselves.
The regime can be flexible and caters for a wide range of circumstances. Significant awards include a recent Schedule 1 case where a figure of £3.65m for housing during the child’s minority and £148k child maintenance per annum was made (to include some of the carer’s own expenditure).
Some differences with married parents
Divorcing parents tend to make claims for child related provision, using the available matrimonial jurisdiction (MCA 1973), as they also have the ability to make maintenance and capital claims in their own right and don’t have to wait for a CMS maximum assessment before seeking child maintenance through the court, unlike under Schedule 1. For those cases, housing provision reverts to the paying parent when the child ends dependency, leaving many parents potentially homeless (and without any maintenance) when their child becomes an adult. However, Schedule 1’s provision is increasingly emerging in divorce cases as a reference point where matrimonial claims are restricted by a pre-nuptial agreement.
The repeated concerns with Schedule 1 that we hear most often from family lawyers is the difficulty they have in ‘calling’ the outcome on cases and predicting how the principles of provision apply to applications involving lesser financial circumstances. The reported cases tend to involve wealthier families (as referred to above), and so provide little guidance for the majority of the population.
Furthermore, the process is not kind either – domestic cases will require running a case through the CMS in parallel to court (which may be a three year journey) and the court aspects are unlikely to take fewer than eighteen months.
Flexibility v certainty
The benefit of our discretionary system is that many judges seek to stretch the limits of Schedule 1 and the case law is constantly evolving. This is illustrated in the decisions of Mostyn J (most recently in James v Seymour  EWHC 844), dealing with the approach on ‘top up maintenance’ and whether CMS percentages should be applied for high earners.
Yet insufficient clarity about the likely outcome for the majority of applicants and for their advisors makes it harder to promote settlement of cases before they get to court. Legislative change with provision for the needs of cohabitants would help at a stroke and bring us in line with many countries around the world which recognise protection for separated cohabitants (including Scotland) but there is no prospect of that at the moment, despite relationship trends and decades of calls for reform.
So despite its drawbacks, Schedule 1 is what we have on the table for the foreseeable future. As cohabitation continues to rise, it will be ever more essential as a piece of legislation to support children and their carers.
The publication by James Pirrie and Charlotte Bradley on financial claims for children under Schedule 1 of the Children Act 1989 is available for download in exchange for a donation to one of our chosen charities, The Hampton Trust (via this link), NACCC (via this link) or Cure Parkinson’s (via this link).
The suggested donation is: £100 for firms/teams; £30 for individuals. Once you have made your donation, please email Matilda Pigneguy at FLiP (firstname.lastname@example.org) to receive a downloadable copy of the book.