Financial Provision on Divorce

Baroness Deech Excerpts

Monday 10th November 2025 Lords Chamber

Asked by

[Baroness Deech]

To ask His Majesty’s Government, following the Law Commission’s Financial Remedies Scoping Report published in December 2024, what consideration they are giving to the reform of the law relating to financial provision on divorce.

[Baroness Deech (CB)]

My Lords, for nearly 50 years I have been calling for reform of the way assets are distributed on divorce, a law now contained in the Matrimonial Causes Act 1973. In that time, divorce law itself has undergone profound changes and is now entirely no fault and administrative. In 1973, the financial provisions were based on the difficulties that had arisen when divorce was first detached from fault, and women and the Church had argued that the husbands should pay for what they saw as the abandonment of their wives. It was a sop to them.

In the past decades, society has changed. Sadly, the harm to children remains, and it is shameful how their maintenance is neglected and not enforced—one of the ills that I am seeking to remedy. The statutory law, however, has remained frozen in a 1960s state. Over the years, the noble Baroness, Lady Shackleton, the great expert, and I, have pointed out that it is so full of discretion that it is unpredictable to the point of being in breach of the rule of law. It is unstable, being thrown into fresh disarray every time there is a Court of Appeal or Supreme Court decision. It still contains gaps in coverage. For example, to what extent do pre-matrimonial assets become matrimonial, on which the case of Standish has opined after 52 years? There is the treatment of pensions. Does domestic abuse make a difference, even if general conduct does not? Why should an oligarch’s wife such as Mrs Potanina be able to clog up our courts, with only the slightest link to this country, in order to seek millions more to add to the £31 million she had already been awarded in Russia?

All this has a devastating effect on litigants. There is no legal aid, and I have witnessed less well-off couples in court, ignorant of even the basics, such as the paramountcy of the child’s welfare. I have seen them weeping at the adversarial nature of the proceedings, needing more judicial guidance than there is time for. I have seen much of a couple’s assets dissipated in legal costs—for example, assets of £1.5 million running up costs of £280,000 in EC v JC.

Let there be no misunderstanding: this is a lucrative field for lawyers representing better-off couples, and their opposition to reform is understandable. I have seen what were thought to be watertight nuptial agreements torn up by judges in different ways. It is disgraceful, too, that the law’s uncertainty keeps the door open for blackmail by husbands in religious divorces.

Some discretion is a good thing, but it has reached a pitch that is too costly and too damaging to the parties. As the Law Commission explained, Scotland and some Australian states have statutory guidelines that promote mediation and settlement without ruling out judicial nuance. I no longer need to make the case for reform. The noble Baroness, Lady Shackleton, and I have been totally vindicated by the Law Commission’s scoping report of December last year, which in hundreds of pages explored the deficiency of the law and determined that it has to be reformed.

The existing law is an intellectual delight for the lawyers, an accountants’ bonus, solicitors’ sustenance, an area of judicial creativity, a windfall for the wives of oligarchs, an academic goldmine, an impoverishment of children, but a desert for the average divorcee. We are out of step with most of Europe and the common-law world, especially Scotland, where the default position is a 50:50 split of assets acquired after the marriage, very limited ongoing maintenance and prenuptial contracts that are binding. This is what I have tried in successive years to achieve in my Private Member’s Bill. Now we are nearly there.

The Law Commission identified four potential models for reform and invites the Government to choose one. The first is codifying the existing law, but that would lead only to the continuation of the discretionary scheme and all its attendant ills. The second is guidelines-based discretion, which would retain judicial discretion within a structured framework. This, too, would keep the door open to too much uncertainty. The third is, as I recommended in my Bill, a matrimonial property regime which limits division to assets acquired during marriage, excludes premarital, inherited or gifted assets, aligns with Scotland and other European countries, and limits maintenance. If that sounds harsh, remember that wives, typically, who are in receipt of universal credit will have their maintenance reduced pound for pound. The husbands in that category are unlikely to have any income to give away in any case. The fourth option is a community property model without discretion—just dividing equally all post-marital assets. That may be a step too far for now.

Whatever model the Government choose, they should be mindful of artificial intelligence: ChatGPT has entered family law. There are already online models for clarifying which assets are in play and suggesting a settlement. The way forward is obvious. Once the law is reformed and has clear principles, AI will gather the information and predict the resulting split that should occur, leaving only the very dissatisfied to continue to fight in court at huge expense.

The other imperative is that there is no point in legislating for cohabiting couples to join the fray while the law is unsettled. That would only open the door to blackmail and a waste of assets. All the Government have to do is choose one of these models and the Law Commission will get on with the work of transposing it into statutory form for enactment. We have waited long enough. If this House believes in reducing child poverty, as I know it does, a law that prioritises child maintenance from divorcing parents and stops wasting their assets must be a good thing.

In the meantime, the Government could immediately bring forward for enactment the Bill already drafted by the Law Commission for the statutory enactment of pre- and post-nuptial agreements with conditions. That would enable all those who dislike the present law to get around it. It would also enable cohabiting couples to make agreements with some confidence that they will be upheld. It is imperative that the Government choose one model now for the sake of litigants, the general economy and peace of mind of families. Vested interests and uncertainty about direction can now be put aside. I ask the Minister to say which model the Government will go forward with.

--- Later in debate ---

[Baroness Levitt (Lab)]

I am afraid I am going to have to disappoint the noble Lord, Lord Sandhurst, because our assessment is that looking at these matters piecemeal will run the risk of creating new disputes and injustices. In the end, it is about making sure principally that children are protected when the relationships from which they are born end up dissolving.

I assure the noble and learned Baroness—

[Baroness Deech (CB)]

Perhaps I might point out to the Minister that the consultation on cohabitation was carried out very thoroughly by the Law Commission. It did it some years ago and, as far as children go, you cannot protect them if the splitting couple—which is very often the case with cohabitants—have no money, and we are not enforcing child maintenance in this country. So do not do the work all over again—it has been done.

[Baroness Levitt (Lab)]

I am afraid that I will disappoint the noble Baroness. This is a manifesto commitment, and it will happen. We will issue our consultation by spring next year.