Will divorce the Scottish way herald the way forward for England and Wales?

By Fiona Kendall, partner and a specialist in pre-nuptial agreements and dual qualified in English and Scots law

The findings of a four year Law Commission review of how English couples’ finances should be sorted out – will be unveiled shortly.

The Law Commission’s report will cover whether or not pre-nuptial agreements should become law, and this has been the main focus of the UK media to date. However, the report on Matrimonial Property, Needs and Agreement which will be published on February 27, is actually much more wide-reaching.

As a dual qualified family law specialist in English and Scots law I particularly welcome this review as it represents an opportunity to look at how out of kilter English family law has become in comparison with its Scottish and European cousins.

As well as examining how marital property agreements can be enforced, the report will also look at how much financial support one spouse or civil partner should give to the other following divorce or dissolution.

Among the aspects under review is “non-matrimonial property”.  This could include property that has been inherited or given as a gift or assets acquired by either party before marriage or civil partnership.

Key areas that could face reform include:

• The demise of long term maintenance for ex-spouses
• Ring-fencing assets brought into the marriage by one or both parties
• Ring-fencing inherited wealth
• Pre-nuptial and post-nuptial agreements becoming legally binding

All of these are principles which are long-established north of the border.

Under Scottish divorce law, there is greater certainty – but potentially less discretion. For instance, the property available for division is narrowly defined. This “matrimonial property” is valued at the date of separation. It will include anything acquired during the lifetime of the marriage but exclude any inheritance or gift which has not been converted into matrimonial property. In England and Wales judges tend to focus on ensuring that both partners are adequately provided for – regardless of how the assets were acquired.

Other principles used to divide assets under Scots law are:

• Matrimonial property being shared equally – since the starting point is that fair sharing is equal sharing
• Financial support being paid for a maximum of 3 years – encouraging the receiving spouse to maximise his or her earning capacity after a period of adjustment
• Support being made available to prevent a spouse suffering financial hardship as a result of the divorce

In Scotland couples can also agree to a binding financial settlement between themselves without the need for a court to be involved, whereas, in England and Wales, unless a judge reviews such an agreement, there is a risk of it being unpicked at a later stage.

Whilst there are undoubtedly arguments in favour of both systems, I will be interested to see whether the English approach starts to take on a tartan hue in the light of the report. I will be still more interested to see whether the report’s recommendations will be taken on board by Justice Secretary Chris Grayling, rather than simply generating debate.

If you have any questions or concerns about dividing marital assets, please call us on 0113 246 0055, leave us a comment below or drop us an e-mail.

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