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Lord Coleraine: My Lords, I am grateful to my noble and learned friend for his reply. It is helpful to have that on the record. Beyond saying that I find it difficult to see how the passivity of failing to respond to correspondence can be called "obstruction", I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 53 not moved.]

Schedule 2 [Financial Provision]:

The Lord Chancellor moved Amendment No. 54:


Page 45, line 7, leave out from ("satisfied") to end of line 8 and insert--
("( ) that the circumstances of the case are exceptional; and
( ) that it would be just and reasonable for the order to be so made.").

The noble and learned Lord said: My Lords, with this amendment I shall speak also to Amendments Nos. 56 and 60. The amendments ensure that financial provision orders and property adjustment orders, except interim orders, cannot take effect before the divorce order or the separation order is made, unless the court is satisfied that there are exceptional circumstances and that it would be just and reasonable for the order to take effect before that time.

Your Lordships will remember that on Report I mentioned that I was advised by the Ancillary Relief Advisory Group that the phrase "just and reasonable" was stronger than the phrase proposed in the amendment tabled by my noble friends Lady Young and Lord Coleraine. I of course accepted that advice. But looking back over the debate, I am entirely supportive of the principle lying behind my noble friends' amendment. I thought that it might add a degree of security if I added "exceptional circumstances" as well. So we have "exceptional circumstances" and that it would be "just and reasonable", in order to make it as clear as we can that the ordinary rule is that these orders

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should not take effect until the divorce itself is pronounced. I hope that your Lordships will feel that that is an emphasis which is worth making and which the amendment underlines.

Your Lordships will remember that in the previous amendments there was a specification of circumstances. I have taken the view that that might make it easier to make the orders take effect earlier, so I have not incorporated that. I believe that the general words that we have now used send the message plainly. I beg to move.

Baroness Young: My Lords, I thank my noble and learned friend for tabling the amendment which entirely meets the points raised at Report. I am grateful to him.

On Question, amendment agreed to.

[Amendment No. 55 not moved.]

The Lord Chancellor moved Amendment No. 56:


Page 47, line 36, leave out from ("satisfied") to end of line 37 and insert--
("( ) that the circumstances of the case are exceptional; and
( ) that it would be just and reasonable for the order to be so made.").

The noble and learned Lord said: My Lords, I spoke to this amendment with Amendment No. 54. I beg to move.

On Question, amendment agreed to.

[Amendment No. 57 not moved.]

Baroness Young moved Amendment No. 58:


Page 48, line 26, at end insert--
("( ) For section 25, substitute--
"Principles which the court is to apply.
25.--(1) The principles which the court shall apply in deciding what, if any, order to make under any of sections 22A to 24 above, are that--
(a) the net value of matrimonial property should be shared fairly between the parties to the marriage;
(b) fair account should be taken of any economic advantage derived by either party from contributions by the other, and of any economic disadvantage suffered by either party in the interests of the other party or of the family;
(c) any economic burden of caring, after the marriage breakdown, for a child of the family under the age of 16 years should be shared fairly between the parties;
(d) a party who has been dependent to a substantial degree on the financial support of the other party should be awarded such financial provision as is reasonable to enable him to adjust, over a period of not more than three years, to the loss of that support after the marriage is dissolved or annulled;
(e) a party who seems likely to suffer serious financial hardship as a result of the marriage breakdown should be awarded such financial provision as is reasonable to relieve him of hardship over a reasonable period.
(2) In subsection (1)(b) above--
"economic advantage" means advantage gained whether before or during the marriage and includes gains in capital, in income and in earning capacity, and 'economic disadvantage' shall be construed accordingly;

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"contributions" means contributions made whether before or during the marriage; and includes indirect and non-financial contributions and, in particular, any such contribution made by looking after the family home or caring for the family.
(3) In applying the principles set out in subsection (1)(a) above, the net value of the matrimonial property shall be taken to be shared fairly between the parties to the marriage when it is shared equally or in such other proportions as are justified by special circumstances.
(4) The net value of the matrimonial property shall be the value of the property at the time the court deals with the matter in exercise of its powers under this Part, save that any appreciation or depreciation in value since the parties' separation which is primarily attributable to the acts of one party may be disregarded.
(5) Subject to subsection (6) below, in this Part of this Act "matrimonial property" means all the property belonging to the parties or either of them which was acquired by them (otherwise than by way of gift or inheritance from a third party)--
(a) during the marriage; or
(b) before the marriage for use by them as a family home or as furniture and effects for such home.
(6) The proportion of any rights or interests of either party--
(a) under a life policy or similar arrangement; and
(b) in any benefits under a pension scheme which either party has or may have (including such benefits payable in respect of the death of either party),
which is referable to the period beginning with the marriage and ending with the date of the parties' final separation, shall be taken to form part of the matrimonial property, subject to any discounts which the court thinks fit to apply (for example, for the chance of receiving less than the quoted benefits).
(7) In subsection (3) above "special circumstances", without prejudice to the generality of the words, may include--
(a) the terms of any agreement between the parties on the ownership or division of any of the matrimonial property or maintenance;
(b) the source of funds or assets used to acquire any of the matrimonial property where those funds or assets were not derived from the income or efforts of the parties during the marriage;
(c) any destruction, dissipation or alienation of property by either party;
(d) the nature of the matrimonial property, the use made of it (including use for business purposes or as a matrimonial home) and the extent to which it is reasonable to expect it to be realised or divided or used as security."
( ) For section 25A, substitute--
"Matters which the court is to take into account.
25A.--(1) In applying the principles set out in section 25 of this Act, the following provisions of this section shall have effect.
(2) For the purposes of section 25(1(b) of this Act, the court shall have regard to the extent to which--
(a) the economic advantages or disadvantages sustained by either party have been balanced by the economic advantages or disadvantages sustained by the other party, and
(b) any resulting imbalance has been or will be corrected by a sharing of the matrimonial property or otherwise.
(3) For the purposes of section 25(1)(c) of this Act, the court shall have regard to--
(a) any maintenance being paid to or on behalf of the child;
(b) any expenditure or loss of earning capacity caused by the need to care for the child;
(c) the need to provide suitable accommodation for the child;

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(d) the age and health of the child;
(e) the educational, financial and other circumstances of the child;
(f) the availability and cost of suitable child-care facilities or services;
(g) the needs and resources of the parties; and
(h) all the other circumstances of the case.
(4) For the purposes of section 25(1)(d) of this Act, the court shall have regard to--
(a) the age, health and earning capacity of the party who is claiming the financial provision;
(b) the duration and extent of the dependence of that party prior to divorce;
(c) any intention of that party to undertake a course of education or training;
(d) the needs and resources of the parties; and
(e) all the other circumstances of the case.
(5) For the purposes of section 25(1)(c) of this Act, the court shall have regard to--
(a) the age, health and earning capacity of the party who is claiming the financial provision;
(b) the duration of the marriage;
(c) the standard of living of the parties during the marriage;
(d) the needs and resources of the parties; and
(e) all the other circumstances of the case.
(6) In having regard under subsections (3) to (5) above to all the other circumstances of the case, the court may, if it thinks fit, take account of--
(a) any legal or moral duty of support owed to a third party by the party against whom the claim is made;
(b) the conduct of the parties both during and since the marriage (including the way in which they deal with any contact arrangements for a child of the family).".").

The noble Baroness said: My Lords, I moved this amendment briefly at the end of the Report stage. It was at such a late hour that I did not feel it appropriate to go into any detail. I am sure that my noble and learned friend the Lord Chancellor will recall that he kindly offered to arrange a meeting on this matter, which we had last week.

As a result of that meeting, I retabled the amendment. It may be helpful to the House if I say clearly that this is not an amendment upon which I would wish to divide the House, because that would be inappropriate. It opens up a new principle which would be helpful to the principles which my noble and learned friend wishes to have behind this piece of legislation.

The amendment is based on Scottish law and what happens now in Scotland. It may surprise your Lordships, as it did me, to discover that English law is devoid of any principle of sharing assets on divorce. The ruling section (Section 25 of the Matrimonial Causes Act 1973) leaves everything to the court's discretion. There is a power to transfer assets from one spouse to another, or to settle property on one or both spouses and the children, but there is no guidance on how those powers are to be exercised.

Furthermore, the Court of Appeal has said repeatedly that previous decisions are no guide: every case turns on its own facts. The House had a long debate on pension splitting on Report, and an amendment was

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carried which opens up the principle of splitting assets. I believe that amendments must be made to the Bill in order to meet that decision of your Lordships' House.

I understand that most systems of law treat marriage as a partnership of equals. Systems of law, in particular in Europe, go on to provide what most people would accept as fair; namely, that property and savings which will come into being during the marriage as a result of joint efforts of the parties should be divided equally. It matters not whether one goes out to work while the other stays at home looking after the children. The corollary is that assets brought into the marriage by one spouse or come from outside by way of a gift or inheritance remain the separate property of that spouse. That is broadly the position in Austria, Belgium, Denmark, Finland, France, Germany, Italy, Norway, Spain, Sweden, Switzerland and, last but not least, Scotland. Therefore, there is extensive experience of the working of the provision. As I said, in every one of those countries the divorce rate is lower.

Therefore, it shows that the English system of making such settlements raises a number of problems. In the first place, on entering divorce people do not know what their rights are. Lawyers cannot advise on the likely outcome of court proceedings because a court may award this or it may award something else. Furthermore, practice may vary in different parts of the country. It appears to be the case that, proportionately speaking, wives in the south east tend to do better than in the Midlands or the north. Whether or not that is the case it is certainly a perceived case.

Since the outcome of such cases is so unpredictable, lawyers are reluctant to commit themselves to a quoted fee in advance and therefore they quote on an hourly rate. The client is then sucked into a spiral which he or she often cannot control and costs increase. I understand that my noble and learned friend is looking for savings and this appears to be an area in which savings might be made. I believe that we would all agree that it would be to our advantage if savings could be made on legal aid in this way. It would appear that Scottish law is fairer than ours and there is no sound reason why England and Wales should operate a different system.

One of the reasons why I have tabled the amendment is that we need to ask ourselves whether the different system has any influence on the divorce rate. In the absence of clear statistics it is difficult to make such judgments. Nevertheless, it is observable that 75 per cent. of divorce petitions are presented by wives. It is just possible that the majority of men have behaved badly and that this is a restoration of some kind of balance of power over the ages. What seems to be a more likely explanation is that women are now cushioned economically from the effects of divorce. That arises in two ways; there are state benefits in the Child Support Act and the courts frequently award 75, 80 or even 100 per cent. of the family home to the custodial parent, who is usually the mother.

It appears that as a consequence divorce may be a much more attractive option for many women than struggling to make the marriage work. I regret to have to say that because I do not like to speak in such a way

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about my own sex. However, there is considerable evidence to show that for no good reason many men appear to be turned out of the house and divorce follows. It would be unrealistic to suppose that all those factors have no effect on the divorce rate because, in a way, our system offers incentives to divorce rather than the reverse.

This is a wide subject and I do not wish to take up more time at this late hour. I believe that it shows that there are serious weaknesses in the English system. It generates anxiety; it certainly generates uncertainty; and I believe that it generates acrimony.

It seems to me that if there were clearer ground rules, more cases would be settled which would contribute to the saving of public funds. It seems strange that we are alone among European powers and quite distinct from Scotland in what we do. If the Scottish system has the great merits of clarity, fairness and providing much greater certainty so that you know much more clearly when you go into divorce what the consequences will be, and if it leads to less acrimony, they would be merits which make the amendment well worth very serious consideration.

It is for those reasons that I have tabled the amendment. My attention has been drawn to what is currently happening in Scotland where the system appears to work well. It works well in a great many countries in Europe. We should consider having something similar if it has all those beneficial advantages which other countries appear to enjoy coupled with a lower divorce rate, which I believe we all wish to see. I do not wish to push that argument too far because I am not sufficiently familiar with all the details of it, but I hope that my noble and learned friend will take away the amendment and consider and consult upon the matter. If at the end of all that, it were thought to be a good idea, perhaps we should incorporate it into our legislation. I beg to move.


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