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Baroness Berners: I too support the amendment. As the three-tier system proposed by the Government to cover all eventualities could be so complicated to administer or be understood by the clients, may we be assured that time will be given to work on simplification by training and education before the Bill is enacted in order to avoid protracted negotiations at the time of pension procedures?

The Earl of Buckinghamshire: I do not want to take up too much time, but I agree with my noble friend Lady Fookes about the complexity of the provisions. Probably if we were starting afresh we would not start from this position. Therefore, it is inevitable that we are dealing with a complex issue, and complex remedies are required.

I agree with my noble friend Lord Astor about new Section 40A(2) on pension sharing. I am not entirely sure that I read it in the same way as he does. I certainly agree with his view that trustees and managers of pension schemes and their advisers do not wish to be put in a position in which they must unravel pension sharing orders which are already being implemented. I do not believe that the industry wants anything to do with pension sharing or divorce, but I guess that that day has passed.

The Earl of Onslow: I remember when my noble friend Lady Young and the noble Baroness, Lady Hollis, were hunting as a couple to produce this effort at pension sharing. We were all moved by what they said and totally convinced by the attitude and line of country which they were following.

This matter is complicated beyond measure. I ask in a spirit of pure inquiry why it is not possible to say to a pension company that one-third of Mr X's pension will go to his ex-wife, to be attached to the pension records. That is all that happens. I cannot understand why the matter must be so much more complicated so that it will make even more money for lawyers. That is what will happen as a result of the complications of this schedule.

7.15 p.m.

Baroness Hollis of Heigham: This was a helpful debate. Again, I apologise to the Committee because I realise that I may have failed in seeking to clarify the position, as I had hoped to do. I accept that Members of the Committee will wish to return to this matter. I should be happy to follow up any issues which your Lordships wish to raise through correspondence and to do so before we reach Report stage.

Perhaps I may do my best to respond to the points raised. The noble Lord, Lord Astor, asked me where my six points had got to because he thought I had seven

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points. That may have been because I was speaking rather quickly, mindful of the time of the Committee. However, on page 4 of my speech notes, it says there are six main points to be made on the amended schedule. My sixth was a "sixth and finally". I counted them again and I still think there are six points. We must wait to look at the efforts of the editors of Hansard to see whether the noble Lord is right.

I turn to some more serious points. The first point the noble Lord raised is that problems have arisen from poorly drafted earmarking orders. There have been problems and we recognise the importance of consistency and simplicity of approach, which has been called for by many Members of the Committee this evening. Therefore, the Government will be consulting publicly later this year about the information which should be contained within both pension sharing and earmarking orders and whether it would be appropriate to prescribe the format of those orders. Power exists already under Section 40 of the Matrimonial and Family Proceedings Act 1984 to prescribe the content and format of court orders.

The second point raised by the noble Lord, Lord Astor, and supported by the noble Earl, Lord Clanwilliam, is the need for education and training of all those involved. Plans are already being made for the training of court staff and judges in England and Wales by the Court Service and the Judicial Studies Board respectively. The training of solicitors, barristers and other advisers is for their professional bodies, but the Government are willing to help; for example, by preparing written guidance. In addition, we expect to provide information for the public closer to the time when the pension sharing provisions are to be implemented.

Thirdly, the noble Lord, Lord Astor, supported by the noble Lord, Lord Goodhart, asked what is meant by "detriment" in new Section 40A(2). The purpose of the provision mentioned is to protect the pension arrangement in exactly the way mentioned by the noble Lord, Lord Astor. The policy of the Bill is to avoid the unravelling or unpicking of a pension sharing order which has been implemented or on which implementation has begun.

Under new Section 40A, it will not be possible for the court to vary or discharge an effective pension sharing order in response to a successful appeal out of time if the person responsible for the pension arrangement has acted to his detriment on reliance of the taking effect of the order; if, for example, the pension arrangement has incurred any costs which are not recoverable from the parties or the order has been implemented to the extent that the pension debit and credit has been created, any reversal of which would create additional costs for the pension arrangement, the pension sharing order cannot be discharged; nor the terms of it altered.

We need that to protect the pension arrangement. If it were possible to vary the terms of the pension sharing order which is already, in effect, spent because it has been implemented by the arrangement, there could be an obligation to recreate a situation--for example, to

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rebuild a fund--which could not be recreated. Liabilities may thereby be incurred, with compensation possibly having to be paid to the pension member.

The noble Lord, Lord Astor, will wish to note the provision in that new Section 40A(4) which makes it clear that the court has the power to disregard any claim of detriment made by the pension arrangement if the court believes that detriment is insignificant. It could be argued, for example, that writing a single letter on the pension share to the former spouse was a cost to the pension arrangement and therefore a detriment, and that the court could not vary or discharge the effective order in response to a successful appeal out of time. However, the court will be able to disregard such a claim as insignificant, thus allowing an alteration to the terms of the order to go ahead in appropriate circumstances.

I have taken some time with that, but it is a point which was raised by several Members of the Committee and I felt that it should be explained in greater fullness.

I welcome the support of the noble Lord, Lord Goodhart. Our parliamentary draftsmen should be on their toes because his scrutiny of every Bill so far has scored a bull's eye. Our failure has been, if not to the Government's detriment, to the public's gain.

The noble Lord, Lord Habgood, suggested that we have been deterred too easily by the research which suggests that we should abandon Part II of the Family Law Act. Like the noble Lord, I read the summary of the research in progress of June 1999. Reading it, I was persuaded that the present arrangements which we had conceived were not working as we had hoped. We all wanted mediation to work but, for various reasons, that was not the case. Couples were coming at different stages in their divorce or unsettled marriage process. Couples wanted particularised information available to them. The partners of many people were not prepared to go for mediation and, therefore, it broke down. We all wanted to make mediation available to couples in the hope of saving marriages where possible and reducing acrimony where that was not possible. But it is clear that the procedures proposed by Part II of the Family Law Act were not as effective as we had hoped. We shall revisit that issue with further research and it may well be that we can be as optimistic as the noble Lord asks, but, at present, the research does not support that case.

The noble Baroness, Lady Fookes, said that this matter is complex and that I had wonderfully added to those complexities this evening. Pensions are always complex because they are technical. For those who have the language--and I do not have that language--they appear as obvious as changing a language code between French and German. They have to be correct. That means that one must give an elaborate explanation rather than winging it.

The reason that our discussions this evening have been complex is not because pension sharing itself is any more complex than pension structures and arrangements in general; rather, it is because we are trying to do something different; namely, in trying to see what the future may hold for Part II of the Family Law Act, we have covered three possible contingencies.

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The first is that Part II of the Family Law Act may come into force before pension sharing does; secondly, that it may come into force after pension sharing; or thirdly, that it may not come into force at all. With this sequence of amendments, we are seeking to ensure that all three possible contingencies are built into the framework of legislation. I suggest that that is what is complex, rather than pension sharing itself. Certainly, by bringing the matter under the Matrimonial Causes Act 1973, we do not add to its complexity. The difficulty is that we are trying to cover all three possible options.

Finally, the noble Earl, Lord Onslow, asked why we could not simply make provision for one-third of the pension and attach a note to that effect to the pension records. Where a pension is being paid or a pension pot is being accrued or where there is earmarking, the flagging, about which the noble Earl spoke, can be carried out. The point is that some people will want that and others will not. The proportion will vary whether the ex-spouse's share remains within the scheme or goes outside it. It will all depend on discussions and negotiations between the couple and pension managers.

That is why the matter is complex. The possibilities facing couples involved in divorce proceedings have to be sufficiently sensitive to the situations that they face. That is why a simple tag of one-third to her and two-thirds to him will not do. Life would be easier if it would. We want to make sure that the arrangements best suited to their personal circumstances, including financial arrangements, are available to them and to the court, if the court believes that that is the fair solution. In the light of that, I hope that the Committee will accept these amendments. I am very happy to follow up any detailed points through correspondence.


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