Labour’s Pledge to Help Cohabitants – What Form Might it Take?

 

In James Pirrie’s blog of 11 October 2023 (read here) he set out Labour’s Common Law Marriage Pledge to give cohabiting couples rights over each other’s finances and property if they separate, and explained both the need for reform and the long road of campaigning to get to this point. Labour’s Common Law Marriage Pledge is long overdue and very welcome.

But, as ever, the devil will be in the detail. There will be many options for any new law. This could be simply to equate cohabitation with marriage once certain conditions are met or it may provide some safety net provision.

This blog looks at some the schemes that exist elsewhere and the options that have been proposed for England & Wales before.

The Overseas Schemes

Australia has one of the most progressive schemes, that effectively equates cohabitants to married couples by recognising these “de facto relationships”.  To qualify a couple must meet at least one of 4 gateway criteria.  These are:

1. That the period for the de facto relationship is at least 2 years;
2. That there is a child in the de facto relationship;
3. That the relationship is or was registered under a prescribed law of a State or Territory;
4. When assessing property or custodial claims in cases of a breakdown of a relationship, it is recognised that significant contributions were being made by one party and the failure to issue an order would result in a serious injustice.

These may present some evidential hurdles but once a gateway criteria is met, a party to a “de facto relationship” has the same rights as if married in terms of financial claims on separation.

New Zealand has an equivalent scheme with similar gateway or qualifying criteria, though the time period, absent other qualifying criteria, is 3 rather than 2 years. Both schemes allow for couples to opt-out through a written agreement.

Scotland has a more conservative scheme set out in the Family Law (Scotland) Act 2006. To qualify it is necessary to show that a couple has lived together as if married or in a civil partnership. In determining this the court will have regard to:

1. the length of the period during which the couple have been living together (or lived together);
2. the nature of their relationship during that period; and
3. the nature and extent of any financial arrangements subsisting, or which subsisted, during that period.

If the qualification is proved, then the Act enables the court to order one party to pay a capital sum to the other. However, there is no presumption of sharing capital acquired during the cohabitation (unlike marriage) and an order will only be made if the person applying can prove that he or she has suffered an economic disadvantage as a consequence of the cohabitation, or the other party has enjoyed an economic advantage.

Previous Proposals in England & Wales

In 2007 the Law Commission issued a report and recommendations called “Cohabitation: The Financial Consequences of Relationship Breakdown”.  The scheme proposed by the Law Commission allowed eligible cohabitants, that is cohabitants who have had a child together or lived together for a minimum period of time not set out in the report, to make financial claims on separation.

The Executive summary for the report explained that: “in broad terms, the scheme would seek to ensure that the pluses and minuses of the relationship were fairly shared between the couple. The applicant would have to show that the respondent retained a benefit, or that the applicant had a continuing economic disadvantage, as a result of contributions made to the relationship. The value of any award would depend on the extent of the retained benefit or continuing economic disadvantage. The court would have discretion to grant such financial relief as might be appropriate to deal with these matters, and in doing so would be required to give first consideration to the welfare of any dependent children”.

The scheme also allowed for a couple to opt out of the protections.

As James Pirrie said in his blog, Resolution, has campaigned for many years for reform of the law for cohabitants. In 2008/2009, at a time I was chairing the Resolution cohabitation committee, I had the privilege of working on behalf of Resolution with Lord Lester of Herne Hill on the Cohabitation Bill 2009. This was a private members bill that started in the House but, like so many such bills, never got near to becoming law.

The Bill defined cohabitants as two people who live together as a couple and either have a child together or have lived together for at least 2 years. The Bill gave the ability to cohabitants to make financial claims but made clear that there was no presumption of equal sharing. It then set out a long list of factors that a court would take into account including any economic advantage or disadvantage. Other factors included the welfare of children, the nature of commitment including any degree of dependency and their respective contributions including by looking after the home or caring for children. The Bill made provision for the full array of orders available on divorce including maintenance and pension sharing.  The Bill also allowed the couple to opt out of the Act by entering into an opt out agreement upon which advice was required to be taken.  As I have said, the Bill did not become law.

The Likely Options for the Labour Party Reforms

There has been significant opposition to reforms of the law for cohabitants. In view of this and the previous proposals in this jurisdiction, a new law that focuses on the economic advantages and disadvantages resulting from the relationship seems the most likely option. Any attempt to equate cohabitation with marriage is likely to result in a troubled passage of any bill through the Houses of Parliament. They will also need to consider whether to give cohabitants the full array of potential claims or to limit such claims to capital payments to re-balance the economic advantage or disadvantage.

So, whilst the promise of reform is welcome, we are still likely to be a long way from reform that will give couples the rights that so many think they have under the Common Law Marriage myth.  Whatever happens, resources will need to be committed to public education, so that people can make informed choices.