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Financial provision when a relationship ends

Published Tuesday, October 10, 2017

This Commons Library briefing paper deals with the law in England and Wales and relates to the division of a couple’s property and income when their marriage or civil partnership breaks down.

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This note deals with the law in England and Wales and relates to the division of a couple’s property and income when their marriage or civil partnership breaks down.

Division of assets on divorce or dissolution

A couple may agree between themselves how to divide their assets. Their agreement may be embodied in a consent order approved by the court which makes it legally binding and enforceable. 

When agreement is not possible, the court may decide an application for financial provision. In deciding an application, the court is required by statute to have regard to “all the circumstances of the case, first consideration being given to the welfare while a minor of any child of the family who has not attained the age of eighteen”.  Therefore each case is dealt with on an individual basis according to its facts. 

Case law

Case law has established that, in trying to achieve fairness in the division of property in any given case, the court should be guided by the principles of the needs of the parties; compensation; and equal sharing.  The Law Commission has commented that the sharing principle is relevant only in a minority of cases because of the overriding problem of meeting needs.

Application to court

Couples must attend a Mediation Information Assessment Meeting (MIAM) before issuing an application to court for a financial remedy (with some exceptions).

Most divorce applications are now considered at divorce centres and there has been an administrative separation of the divorce process from contested financial applications.

Sir James Munby, President of the Family Division, has outlined how he envisages further procedural change to go ahead and said that “the on‐line divorce project must proceed as fast as sensibly possible”.

Guidance for couples

The previous Government asked the Family Justice Council to take forward a recommendation by the Law Commission for guidance to clarify the meaning of ‘financial needs’. In April 2016, the Family Justice Council published a guide, intended to help litigants in person, Sorting out Finances on Divorce.  The guide sets out how the Family Court approaches financial needs on divorce.  In addition, the Ministry of Justice is working to develop an online tool, supported by formulae, to assist separating couples in making private financial arrangements on divorce.

Calls for reform

Baroness Deech (Crossbench) has introduced a number of Private Members Bills intended to reform the law relating to financial provision on divorce. Resolution are among those who have also called for reform in this area.

Enforcement of Family Financial Orders

The Law Commission has made recommendations aimed at ensuring that payment is made once a court order is in place.

Pre-nuptial agreements

Some couples enter into a pre-nuptial or post-nuptial agreement which sets out how they would wish their property and income to be divided in the event of divorce or dissolution. Although these agreements are not automatically enforceable, following a landmark ruling in the Supreme Court, some pre-nuptial agreements will now have effect in the absence of circumstances which would make this unfair. 

Cohabitation

Cohabiting couples do not have the same rights to financial provision on relationship breakdown as married couples or civil partners.

Commons Briefing papers SN05655

Author: Catherine Fairbairn

Topics: Civil partnerships, Divorce, Family law, Marriage

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