Matrimonial and Family Proceedings Bill [H.L.]

HL Deb 24 January 1984 vol 447 cc160-97

4.23 p.m.

Consideration of amendments on Report stage resumed.

Lord Hatch of Lusby moved Amendment No. 2: Before Clause 3, insert the following new clause:

("Annuities and insurance policies

. In section 24 of the 1973 Act the following paragraph shall be inserted after subsection (1)(d)— (e) an order that a party to the marriage shall pay monthly or annual premiums in order to purchase a deferred annuity, life or other insurance policy for the benefit of the other party to the marriage to the trustees or managers of this annuity or insurance policy.".").

The noble Lord said: My Lords, I beg to move Amendment No. 2 standing in my name and in that of other noble Lords on the Marshalled List. I make it clear at the beginning that neither on Amendment No. 2 nor on Amendment No. 3 have I any intention of dividing the House. I think that it would be incorrect to call both of these amendments probing amendments. They are opportunities to air the collective wisdom of the House on what is a very complex issue but one on which I believe there will be general concern and, I hope, an attempt to develop ideas which may well be put into practice at later stages in the Bill either in this House or in another place.

I think that we would all agree that at the time of almost every divorce the woman suffers financially. One of the most important financial losses which she suffers at the time of divorce is the loss of her rights to a widow's pension. She loses also the right to participate generally in her husband's pension under his occupational pension scheme. It is also the case that she may suffer losses in relation to state retirement and widow's pension schemes although these losses are smaller mainly because the law, through various changes, has provided a cushion. For example, a divorced wife is permitted to rely on her husband's contributions during marriage. She can also bolster her own contributions record because of the home-responsibilities provisions which permit her to count towards her own pension entitlement the years spent at home looking after children.

Despite this, there can be no doubt—and I would assume that there is no doubt in this House—that the vast majority of women at the time of divorce suffer a financial loss. The object of these two amendments is to explore means by which this loss, if it cannot be entirely recovered, at least can be minimised. Let us take the case of a woman divorced at, say, the age of 45—an important stage in a woman's life. She is no longer entitled to a widow's benefit under her ex-husband's occupational scheme. Nor is she able—although this refers more to the next amendment—to enjoy a part of a lump-sum payment on her husband's retirement.

Perhaps most important of all, if she returns to work she will find it very difficult at that age to build up her pension entitlement as she is to retire in 15 years' time at 60 and not at 65, as does a man. Also, it is not generally recognised that she may encounter a prejudice in securing employment at all. That prejudice will be the result of a firm saying, "As you are 45, you are going to interfere with the provisions of our pension scheme". I came across a case just this week of a lady who had applied for a job at 45 and was told that if her application had been six months earlier, before she was 45, she would have been given the job; but, because she was 45, she was outside the pension scheme and therefore could not be given employment. This is a serious financial loss and a loss of earning capacity for the divorced woman at around that age.

The pension rights enjoyed by the husband are surely rights that emerge from the savings that have been built up during the marriage. That marriage may very well have lasted for 20 or 25 years. Surely, we would all agree that the role of the wife during that period has contributed to the entitlement of the husband in building up his pension rights and drawing his pension at the time of retirement. Should it not be regarded as a matrimonial asset to be equitably divided on divorce in the same way as any other accumulated property is divided? I am quite well aware that this is not easy. We have struggled for some time—and I have been very heavily dependent upon and assisted by the Legal Action Group in looking at the whole background of this aspect—to find some formula. We do not claim to have done so. However, I invite noble Lords, and particularly the noble and learned Lord on the Woolsack, to express their views as to what can be done in order to remedy what is obviously a lack of equity for the divorced woman.

The pension rights that I am referring to are expectancies. At the time of a divorce, there are very few husbands who have sufficient resources to be able to compensate their wives for the loss of the rights which will accrue only in the future, so we have to find a means by which rights that will accrue at a future time can be safeguarded for the divorced woman. This problem, as I am sure the noble and learned Lord knows, has long been recognised by the Law Commission. It considered it as long ago as 1967 in Working Paper No. 9 on Matrimonial and Related Proceedings: Financial Relief. The Law Commission then put forward various proposals and solutions, all of which needed further work doing on them, but that work has not been done. I wonder whether the noble and learned Lord can tell us why, and if there is any intention that it should be done.

In 1981—a matter of 14 years later—the Law Commission was still saying that early consideration should be given to the introduction of legislation empowering the courts to deal with the problem of occupational pensions, but it made no further detailed proposals itself. Meanwhile—and I think most significantly of all—the Occupational Pensions Board considered the same issue in its 1976 report (Cmnd. 6599, Chapter 13). The Occupational Pensions Board recommended—and again this has particular significance to the debate on this amendment—that the courts should have power to make orders against the trustees of pension funds allocating a widow's or widower's pension. I shall come back to that in a moment, but it seems to me to be a most important recommendation. I should very much welcome the views of the noble and learned Lord on the Woolsack on this aspect.

The Law Commission has never seriously looked at this recommendation, nor, so far as I know, has any other body. Why not? Surely, if we are agreed that here is a matter of serious unfairness, there should have been action since the recommendation of the Occupational Pensions Board as long ago as 1976. I know that the recommendation would involve a number of changes which could not be brought into this law; it would involve changes in the matrimonial law and also in pension and tax laws, and it is not possible to do that in drafting an amendment to the present Bill. But this and the following amendment suggest two possible changes—I put them forward simply for discussion—in the law on maintenance after divorce, which could be of assistance where the court wishes to order some compensation to a wife for the loss of pension rights, and where the husband does not have the resources to pay that compensation at the time of divorce.

I confine myself for the moment to Amendment No. 2 and the payment of an annuity premium, though much of what I have said so far applies to the next amendment. It is possible for the court to be given power to order the husband to pay the premiums on a deferred annuity, or some other form of insurance policy for the benefit of the wife. At the moment, the court does not have power to order either party to make payments to a third party such as an insurance fund, and this amendment is designed to allow the court to do that. I say specifically "allow" and not "enforce". This proposal was considered by the Law Commission in 1967, and in its consideration it came to the conclusion that the wives might prefer a higher maintenance order rather than an order that the husbands should purchase an annuity for them.

The wives might object that this was excessive paternalism of the courts in trying to protect them in their old age. But I suggest that it is highly unlikely that a court would make such an order unless a wife actually applied for it, and that is the force of saying that the court can make an order and the wife can apply for it under the terms of this amendment. In other words, the wife can say, "I want this order made because I am looking to the time when I shall no longer he able to work", and that cannot be described by any standard as paternalism. Many wives might very well want to take advantage of such a power and it might provide them with both tax and benefits advantages.

I go back to the recommendation of the Occupational Pensions Board in 1976 as a better form of protection for the divorced wife, for the wife who may have great difficulty in getting another job or for the wife who may very well face penury in old age. I believe that that is the best door to open for future legislation. But as it is not an option that we have in this Bill, I have suggested that the wording of this amendment will offer an opportunity to the House to discuss what I believe we would all accept is a tragic problem, which it is our responsibility to do something about. I beg to move.

4.39 p.m.

Lord Scarman

My Lords, I desire to support as strongly as I can Amendment No. 2—at any rate, the principle of Amendment No. 2—and my attitude to it has been eloquently and vigorously expressed by the noble Lord, Lord Hatch of Lusby. I can therefore be brief. We are here considering an area of the law where there is a serious weakness, in practice and in principle, in the financial support available to a divorced woman. The basic weakness of the law has been described by the noble Lord, Lord Hatch of Lusby. It is that the courts have no power to order the trustees of a pension fund, when the moment comes for them to pay out benefits either by way of pension or lump sum, to apportion those benefits between the husband, his widow if he has married a second time and his first wife. The position therefore is that trustees of these pension funds pay out the benefits either to the man himself or to his widow, the second wife, and there is nothing directly available from the fund for the first wife.

One understands that it would be difficult to introduce into the Bill a provision which gave power to the courts to make such direct orders upon the trustees of funds, insurance companies or other institutions charged with the operation of an occupational pension scheme. Therefore, this amendment and Amendment No. 3 are put down so that the attention of the House and of the noble and learned Lord on the Woolsack and his department may be drawn to the crying need to strengthen the protection of women of the kind we are discussing.

I invite the attention of the House, in particular, to Amendment No. 2. This option was considered by the Law Commission when I was its chairman. In retrospect, I am very sad that we did not put it forward. It is a very ingenious provision. It deals with the all too common situation of a family which has an income, earned, let us say, by the husband from his job, but no capital worth speaking about, although there is the expectation (it may be more than that under an occupational pension scheme; it may be a right) on retirement or death of receiving a pension or capital sum benefit from an occupational pension fund. The ingenuity of this proposal is that it enables the court to require the husband, on divorce, to buy, by payment of monthly or annual premiums, a deferred annuity, or a life or other insurance policy which will mature very much later; namely, on the retirement or death of the husband.

Let us consider how serious that moment is for an ex-wife who, for one reason or another, has been unable during the years since her divorce to earn a substantial living and therefore a pension. That is the moment when the source of her financial support by periodical payments disappears. That is the moment when she must find a substitute. Under existing law she will be hard put to it to find a substitute if her ex-husband's only pension entitlement is to be found in an occupational pension scheme which is operated by trustees who do not recognise any rights in the divorced wife. The amendment secures that by regular payments, within the means of the ex-husband, there will be, when that dread moment arrives, some benefit, either by way of annuity or capital sum, available for the ex-wife who has, ex concessis, no rights against the fund.

Though, like the noble Lord, Lord Hatch of Lusby, I am certainly not pressing the House to divide on this amendment, I do ask the House and the noble and learned Lord on the Woolsack to give it, together with other proposals, most careful consideration. I blushed as the noble Lord, Lord Hatch of Lusby, indicated the apparent lack of success or lack of enterprise—I do not quite know which it was—of the Law Commission in not pursuing this matter, which we in 1967 plainly recognised was a serious weakness in the law. Let us hope that perhaps during the course of the Bill we may, late though it is, repair that injustice to women. And how appropriate it would be to do it in a Bill which is seeking to repair injustices to men! Let us add a little chivalry to the Bill.

Baroness Ewart-Biggs

My Lords, I, too, should like to support the principle underlying the two amendments which have been put forward by my noble friend Lord Hatch of Lusby. I should like to highlight the concern which is felt about the whole matter by giving the example of a particular category of wife who suffers from the quality of her husband's profession and who is therefore a target after divorce, as a result of his profession. I refer to the diplomatic service wife.

There can be no doubt that because of the unusual nature of the diplomatic profession the diplomatic service wife has to make more sacrifices than do women who are married to men in other professions. Not only does she suffer the very great inconvenience of perpetual moves from one country to another, with the consequent damaging effects on her own qualifications or her own job opportunities; she is also required to put a great deal more time and effort into supporting her husband in his particular profession. She has to do a great deal more entertaining and she has to devote a great deal more of her time to contributing to her husband's profession. So more than most wives she feels bitter about not qualifying for any part of the occupational pension.

In the event of a divorce, therefore, a diplomatic service wife will feel this injustice but will be in an even weaker position than most ex-wives to find employment. She will have been away from the employment market; and she will therefore be unable to earn her own occupational pension. After a long period of time she will find herself almost disqualified from her own employment field. To give your Lordships an example, I have been sent a letter which was received by the Diplomatic Service Wives' Association and which bears out this point. This elderly lady said: I have been most interested in the recent articles relating to divorce after retirement. I myself would have consented to a divorce some years ago but have not done so solely because of the civil service widow's pension problem. I hope this ruling may be changed some time. I feel that it is most unfair. I had to give up a perfectly good job when I married into the Foreign Office in 1949 and have since done a number of jobs which have been useful, but not a career. I have been doing a part-time catering job for six years, but I am now 63 and cannot go on much longer. I do have an old-age pension, so I will not be left with no income at all, but I will get no share of the civil service pension which, like many others, I feel I have earned.". However, I would point out that American law recognises this particular injustice and provides special treatment for ex-foreign service wives in the United States. There, under the provisions of a public law which is apparently re-stated in a s section of the Foreign Service Act 1980, an appropriate distribution of a retirement benefit between a federal employee and a former or separated spouse can be determined. The paying officer is authorised to make payments directly to the previous or separated spouse in compliance with the terms of an express court determination providing for the apportionment of retirement benefits.

I realise that that provision was brought in under a foreign service Act, and indeed it is quite remote from any possibility within this particular Bill. But my reason for pointing it out to your Lordships is simply to stress that this injustice has been recognised by American law and it has been dealt with. The spirit and principle of these amendments are extremely important. They are trying to rectify this injustice, and for that reason I should like to support them very strongly indeed.

Lord Simon of Glaisdale

My Lords, your Lordships will feel indebted to the noble Lord, Lord Hatch of Lusby, for these two amendments, because they identify a problem which has been recognised as being part of the injustice to wives which was implicit in the 1969 legislation. Being so very near the heart, it is far from easy to be rectified.

The noble Lord has put us all in his debt by identifying the problem so clearly. He made it clear that these are probing amendments so it would be quite inappropriate to cavil at any matter of drafting or machinery, as to which I am far from convinced. But I venture to go behind even the noble Lord's very clear analysis and review the way in which maintenance of wives should be looked at, because that affects so many of the other matters which your Lordships have to consider.

Viewed economically, marriage involves a functional division of labour. The husband is free to go out and pursue his career and to make money. It is the wife who bears the children. She undergoes nine months of nausea, discomfort and fatigue. Even after the child is born, her earning capacity is impaired. I entirely agreed, if I may say so, with the noble Lord when he said that the very fact of divorce is an economic disadvantage to a wife. My noble and learned friend Lord Elwyn-Jones said virtually the same in general terms at Committee stage. It was spelt out in detail by the noble Baroness, Lady Lockwood, when she referred to recent research which suggests that the disparity in earnings between husband and wife, between men and women, is due at least significantly to the fact that women have family responsibilities.

If the wife's efforts in the home free the husband to be the breadwinner, that imposes on him the obligation—and vests in her the right—to share the loaf which he has earned. That does not end on divorce, because her economic impairment subsists long after the divorce. The noble Lord, Lord Hatch of Lusby, gave a striking example of the woman of 45—but I venture to believe that it is almost inevitably general throughout the working life of any woman; even the career woman, in the odd case, finds her earning capacity impaired through being away from work, if not because of housekeeping then because of child-bearing.

That being so, what is to be done about this particular problem? The problem is that, increasingly, emoluments for work are paid not immediately but deferred to be paid in the form of a pension. If the wife has a moral entitlement to current earnings, equally she has a moral entitlement to share in the pension or other benefit.

The Law Commission and Parliament in 1969 tried to deal with that problem—the general problem of the wife's disadvantage during marriage, and particularly after divorce—by stipulating that the court should, as far as possible, put the parties in the position that they would have enjoyed had the marriage subsisted. That has not worked, and it is corrected in this Bill. It has not worked because, as was pointed out at the time by my noble and learned friend Lord Hodson, that most experienced matrimonial judge of his generation, there is not enough money to go around for two families in other than an exceptional case. The result is that both families plummet down to subsistence level.

It is very difficult to deal with the problem of deferred earnings in the form of a pension. One method is not to hamper the court in any way in the variation of a maintenance order. There has been much talk on this Bill about a clean break. As my noble and learned friend Lord Elwyn-Jones pointed out, there can be no clean break when there are children. Nor, I venture to add, can there be any clean break when there is an entitlement to a pension.

My own preferred method of dealing with the matter would be within the purview of the family court; to let the court have before it the trustees of any pension fund or any occupational employer and impose a trust into the trust deed in favour of the wife if she had been in no way substantially responsible for the break-up of the marriage. I agree that the problem cannot be solved within the purview of this Bill; and I agree also with my noble and learned friend Lord Scarman. But it is a very real problem. This Bill does compound the inequities to married women—to wives—in the way that I have tried to indicate to your Lordships. That makes it more incumbent upon the legislature to deal with this particular problem.

Lord McGregor of Durris

My Lords, it is hardly necessary to add anything in giving strong support to these amendments beyond saying that the need for them is underlined by the steady increase in the occupation of women, and by the steady spread of occupational pension schemes.

4.59 p.m.

Baroness Gardner of Parkes

My Lords, I spoke to an amendment concerning this matter of pensions at Committee stage and I should like again to confirm my support for this amendment. I was pleased to hear the noble and learned Lord, Lord Simon of Glaisdale, point out the inequities between men and women and that he considers this Bill will compound them. A point which has been made—but not very clearly I feel—is that the woman who gives up in any way, for marriage or for children, not only has the difficulty of going back but has lost her place on the ladder of promotion during the time that she has been away, and that is something that is quite significant when the time comes to return to work.

Many women who are divorced—and I have had a great many letters from different women's groups on this subject—feel that the second wife is an option, but the first wife in a divorce situation is no option, she is in that position and unable to change her status. They therefore feel that, although, as the noble and learned Lord, Lord Simon, has pointed out, there is not enough money for everyone, that is certainly no reason why the first wife would not have the assurance of whatever proportion of pension to which she had helped to contribute over the years in which she was the supportive partner. If recommendations of the type suggested in this amendment—I appreciate the point that this particular amendment may not cover it all—could be brought in as a possibility for the court, I think that this would answer the concerns of many women who have written to me on this matter.

Lord Elwyn-Jones

My Lords, this amendment has exposed and highlighted an important omission in the Bill. The speeches of my noble friend Lord Hatch of Lusby and the noble Lords on the Cross-Benches, as well as those of the noble Baronesses who have spoken, have shown the power and the strength of the case that is put forward for bringing forward the recommendations in the amendments.

The Occupational Pensions Board considered in their 1976 report the issues that arise from the amendments and then, as I understand it, recommended that the court should have power to make orders against trustees of pension funds allocating a widow's or widower's pension. As my noble and learned friend Lord Scarman has indicated, the Law Commission looked at this problem; I am not being discourteous to them in dismissing their examination of it as lightly as that. But it may well be, bearing in mind that there are serious practical problems to be resolved in the implementation of these proposals—but not impossible difficulties I would have thought—of value if the matter could be referred back once more to the Law Commission, which is seized of the problem to a certain extent. I hesitate to mention that lest, owing to the pressure of work that the Law Commission may be under, this may be projecting the proposal back too remotely in time.

Therefore, I am a little nervous about making this suggestion and perhaps the noble and learned Lord will express some thoughts about it in his reply. But something ought to be done and needs to be done quickly to remedy the injustice that has been pointed out, the inequality of the treatment we are faced with. I hope that the noble and learned Lord will be able to give some encouragement to the proposals which have been, if I may say so, so authoritatively and admirably explained to your Lordships.

Baroness Lockwood

My Lords, before the noble and learned Lord replies. I wonder whether I may add one comment. If it should be that the Law Commission is too occupied to take up this matter, I wonder whether the noble and learned Lord the Lord Chancellor could give us an assurance that the recommendations of the Occupational Pensions Board could be looked at more closely, because that board looked very carefully at all the implications of pensions in relation to the divorced and separated woman and their recommendations were very specific. It would be possible for some of their recommendations to be taken up and even perhaps incorporated into this Bill. Many of the recommendations in the 1976 Report depended on fundamental changes in the social security system as administered by the Government; but this section dealing with divorced and separated people is something which stands on its own. I think it would be possible and practicable to take up some of their suggestions, perhaps without even a great deal of further consideration.

Lord Morris

My Lords, the noble Lord, Lord Hatch of Lusby, in moving this amendment opened by referring to the amendment as being in his name and in the name of other noble Lords. When I looked at the names of the other noble Lords I could not help but think, "Some other noble Lords!", for the noble Baroness, Lady Ewart-Biggs, invariably talks with eminent commonsense; and the noble and learned Lord. Lord Scarman, always talks with eminent commonsense, wisdom, and—if I may say so—brilliance. There is no doubt in my mind that this has exposed a very serious gap in the law. I believe that this Bill is an extremely good vehicle whereby this matter could be dealt with. After all, there is a whole Part, Part II, which is devoted solely to the financial provisions upon divorce. I would have thought it a very good vehicle. As this is a House of Lords Bill (that is, a Bill initiated in your Lordships' House) there is absolutely nothing stopping noble and learned Lords—and indeed any other noble Lords who have the standing—influencing Members of another place and getting them to consider seriously this extremely important lacuna in the law of England and Wales—indeed of the United Kingdom.

The Lord Chancellor

My Lords, I think I can offer the noble Lord, Lord Hatch of Lusby, and his various supporters, at least modified rapture, but in one respect without agreeing with the noble and learned Lord. Lord Elwyn-Jones; I do not think that this is an important omission from the Bill. The Law Commission, at page 12 of the report which this Bill embodies, drew attention to this particular matter most specifically, and this is what they said: We, therefore, recommend that early consideration be given to the introduction of legislation empowering the courts to deal with the problem of occupational pensions. We do not think it necessary that the reforms which we propose —those are the reforms contained in this Bill— should, however, be delayed in the meantime. I wholly agree with a very great deal of what the noble Lord, Lord Hatch of Lusby, said at the beginning of his speech. I think that I said it in my own way at Second Reading, and therefore I will not repeat it. Quite obviously a woman who has been married for any considerable length of time, particularly if there are children of the marriage, is affected financially most adversely by the fact of divorce. I would not go so far as to say that the second wife is an option and the first wife is not, because she usually is the person who brings the petition. But at the same time she is adversely affected financially by the fact of divorce. Her earning capacity is diminished.

I need not elaborate the matter further because it was spelled out in great detail and with admirable authority by my noble and learned friend on the Cross-Benches, Lord Simon of Glaisdale. The fact is that one can deal very easily on the whole with existing liabilities, earnings and possessions, but if you are talking about a deferred emolument, such as an occupational pension, many very much more difficult problems arise.

I think I can best deal with this matter by lumping these two amendments together. I absolutely agree with whoever it was—I forget who—who said there is nothing more boring than drawing attention to drafting deficiencies. There are two in the amendments, however, which I ought to mention. One is the absence of provision in the case of remarriage and the other is the absence of provision for variation. There are other more detailed drafting deficiencies with which I will not trouble the House.

I am, on the whole, rather sympathetic to the thinking behind these two amendments, and particularly with the second of the two. The first could probably be dealt with under the terms of the existing law—Section 23 of the principal Act—because, after all, under that section the court can order payment to the wife of either periodical payments or a lump sum and there is nothing to stop the wife from buying a pension or utilising part of that money to pay premiums. So I do not think that that presents anything like the problem suggested in the second of the two problems concerning deferred rights drawn to our attention by my noble and learned friend Lord Scarman, the noble and learned Lord, Lord Simon of Glaisdale, and the noble Baroness, Lady Ewart-Biggs. Lady Ewart-Biggs cited the case of a diplomatic pension which, of course, is only one of a whole series of occupational pensions the advantages of which are lost on divorce by the wife of the marriage.

On Second Reading my noble and learned friend Lord Scarman, who otherwise gave me much needed and valued support, expressed his disappointment that the Bill contained no provision on the problem of occupational pensions and the right of the divorced wife to have some share of that pension. In Committee I made certain declarations about that which I think will, on the whole, be more satisfactory if pursued than the particular course suggested by the noble Baroness, Lady Lockwood, or the noble and learned Lord, Lord Elwyn-Jones. In the Committee debates, particularly on 12th December, I mentioned that my department was going to issue a consultation paper on the question of the allocation of pension rights on divorce. This paper will be one of a series of other papers—the others being produced by the Department of Health and Social Security.

It should also be mentioned that my right honourable friend the Secretary of State for Social Services announced on 23rd November that he would be chairing an inquiry into retirement pensions generally, including the portability of pensions—which, of course, is closely relevant to the subject we are now considering—in one of its special aspects; namely, the allocation and apportionment on divorce. These initiatives are relevant to the consideration of any change in the existing law which would have the effect of empowering courts, on divorce, to make orders in favour of one party to the marriage for the provision of annuities or life insurance. The inquiry hopes to reach conclusions by the autumn of this year, which I think is probably more promising than anything that could be arranged under the umbrella of the——

Lord McIntosh of Haringey

My Lords, I hope the noble and learned Lord will forgive me for intervening. He refers to the inquiry to be brought forward by the Secretary of State and he also used the word "portability". Surely "portability" means portability between employment and not between recipients of pensions.

The Lord Chancellor

Of course, my Lords, I said it was closely allied to the problem we are now considering. If the noble Lord will forgive me, I said that I am issuing a consultation paper which is one of a series of papers which will deal with the specific question we now have under consideration. My department is producing a paper on the options for reform on the allocation of pension rights on divorce, as I indicated earlier. A wider review of retirement pensions is that by the DHSS, and that has been announced by the Secretary of State for Social Services.

I was very grateful to the noble Lord, Lord Hatch of Lusby, for making clear in his opening remarks that this is a matter for debate rather than for Division. I do not think that it would be sensible to pursue the amendment in isolation from these two initiatives. I must tell your Lordships that this is a matter which I view with a great deal of sympathy. In the light of that sympathy, which I hope I have shown to the general approach especially in relation to the second amendment—the first I believe could be dealt with under existing legislation—I hope we can leave the matter there for the present.

I certainly promise the noble Lord that I will draw the attention of the Government machine to what has been said and express my sympathy with that. There is no doubt that we must deal with this problem and this is wholly in accord with the report of the Law Commission, which we are putting into effect. The only point is that I agree with the Law Commission that the present reforms ought not to be delayed while that is going on. Otherwise, I rather agree with what has been said.

Lord Hatch of Lusby

My Lords, it only remains for me to thank those who have taken part in this debate and for the ideas that they have put forward to this House. In particular, I thank the noble and learned Lord on the Woolsack whose assurance I accept unreservedly. It is clear that there is widespread disturbance about this inequity, at least in the present practice if not in the present law. It is equally clear that there is unanimous agreement that a wife will have contributed to the pension which is paid to her husband during the time that she has been living with him, up to the time of divorce and, therefore, she has a right to a part of that pension. It is our responsibility to see that that right is put into law. I leave it to those with much greater legal experience than mine, and particularly to the noble and learned Lord on the Woolsack, to see that this is done. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5.19 p.m.

Lord Hatch of Lusby moved Amendment No. 3: Before Clause 3, insert the following new clause: (" . After section 24A of the 1973 Act the following section shall be inserted—

"Payment of lump sum on retirement or death.

24B.—(1) In addition to and without affecting the powers of the court to make an order for the payment of a lump sum under section 23 of this Act, either party to the marriage may, on the retirement or death of the other party after decree absolute of divorce or nullity, apply to the court for an order that the party or his executors or administrators shall pay to the applicant such lump sum or sums as may be specified.

(2) The court, in exercising its powers to make an order under subsection (1) above shall have regard to the provisions of section 25 below but, in addition, shall make an order only if the respondent is on retirement or death, entitled to benefits from a retirement pension or superannuation scheme to which he or his employer contributed during the subsistence of the marriage to the applicant.".").

The noble Lord said: My Lords, I beg to move this amendment in my name and that of other noble Lords. We need to spend much less time on this amendment because a great deal of the ground has already been covered and a partial reply has already come from the noble and learned Lord the Lord Chancellor. I make one point about the lump sum. It is often the case that a lump sum is paid to an employee on retirement. This comes into the same category as a pension. The lump sum is paid to the employee, who has been living with his wife up to the time of the divorce. Therefore, the wife has been contributing to the entitlement of that lump sum and even if she is divorced she has a right to a proportion of it.

There is at the moment one handicap to her pursuing that right. It is open to the husband to compensate his wife for the loss of pension rights and to require him to make a lump sum payment to her when the rights accrue. The ex-wife should be entitled to ask the court for an appropriate proportion of the lump sum. However, under the present law that is difficult. It is difficult for this reason. In general, on divorce only one lump sum payment can be ordered. It is usual at the time of the divorce for the wife to receive a lump sum, often to compensate her for the loss of the home. In that case, she is not entitled to ask for another lump sum when the husband retires and is paid a lump sum by the firm for which he has been working. It is, therefore, suggested that the court should be given the power to consider awarding a second lump sum where appropriate.

Again there are difficulties, and there are certain reservations. The reform could have only a limited effect. For example, it could not, on the death of the assured, prevent the trustees of the pension fund from paying out the money to the newly widowed second wife rather than paying it into the deceased's estate. Nevertheless, the same argument applies to the case for the court to be given the power to award the divorced wife a proportion of a lump sum received by the husband on retirement as to her right to a proportion of the pension.

I wish to raise one last point. It may be controversial and it will certainly require a great deal of thought. I know that it is completely against the spirit of parliamentary government for us to have retrospective legislation. However, this may be one instance in which we could consider varying the general rule. Perhaps the proposal could be considered at a later stage, possibly in another place. If a person divorced on a Tuesday had a certain right but someone divorced the day before did not, it seems to me that there would be a great feeling of inequity. I think that we have to think about that. I put the idea forward as it is an issue which could affront the sense of fairness of the British people and one about which we may well have to think seriously in the future. I beg to move.

Lord Simon of Glaisdale

My Lords, this matter will be further considered. I desire only to express my agreement with what the noble Lord, Lord Hatch of Lusby, has said but to voice reservation about the restrictive provisions of subsection (2) in the amendment, whereby the wife can benefit only if the husband: is…entitled to benefits from a retirement pension…to which he or his employer contributed during the subsistence of the marriage". My reason for the reservation is this. Many pension schemes allow entry only at a certain stage of seniority. Frequently in the functional division of labour the wife will have enabled the husband to achieve that seniority and to benefit from the pension scheme. Although in general I support what the noble Lord has said, I very much doubt whether that restriction is equitable.

The Lord Chancellor

My Lords, what I said in reply to Amendment No. 2 was intended to apply to both amendments. I think that Amendment No. 3 is the more important of the two. As I said, there are ways round the problem which Amendment No. 2 was designed to deal with, but there is no way round this one. As the noble and learned Lord, Lord Scarman, said, the court has no power to order the trustees of a pension fund, or whatever they are called, to apportion the value of the pension between husband and wife when they divorce.

I think that there are problems which have to be thought through. One was specified by the noble and learned Lord, Lord Simon of Glaisdale. I notice that the amendment, as drafted, covers the executors and administrators, obviously contemplating that money payable on a whole life insurance after death would be subject to the scheme. I think that we have to protect them in some way against a situation where the whole estate has been distributed before the application is made, assuming that it was distributed in good faith. The proposal has to be married a little to the Inheritance (Financial Provision for Family and Dependants) Act.

I think that a question will arise as to the time within which an application should be made. On the wife's side it could very well be said that she may not know of her former husband's death or retirement. Either may take place many years after the divorce. Again, I think that something has to be done about remarriage. The wife herself may remarry, and the rights of the second wife of the husband must also be taken into account. But I make it plain that I want to deal with this subject. I shall try to get on with that along the lines that I indicated in answer to Amendment No. 2. How far one will succeed in one's endeavours I fear that bitter experience of life sometimes leads me to doubt, but I shall do my best.

Lord Hatch of Lusby

Again I thank noble Lords who have participated in this short debate and particularly the noble and learned Lord on the Woolsack. I wish him Godspeed in his promised endeavours. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3 [Orders for financial relief after divorce etc.]:

5.28 p.m.

Lord Elwyn-Jones moved Amendment No. 4:

Page 3, line 24, after ("shall") insert ("not have regard to the conduct of each of the parties unless in the opinion of the court there exist such exceptional circumstances as would render it inequitable for such conduct to be disregarded but shall").

The Lord Chancellor

My Lords, I do not know whether the noble and learned Lord would like to speak to Amendment No. 6 at the same time?

Lord Elwyn-Jones

My Lords, it would be a most convenient and sensible course to speak to Amendment No. 6 as well.

Amendment No. 6:

Page 4, line 7, leave out paragraph (g).

Amendment No. 4 raises the important issue as to how far the conduct of the parties should be considered and weighed by the court when it is considering the question of making financial provision in divorce proceedings. As the Bill now stands, your Lordships will see that in the financial provisions in Clause 3 it is stated: As regards the exercise of the powers of the court…the court shall in particular have regard to the following matters"; and paragraph (g) reads: the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it". When we discussed this matter before, my noble friend Lord Mishcon indicated that a solicitor advising the parties in such cases might well, in the presence of the requirement that: the court shall…have regard to…the conduct of each of the parties", then and there, at the consultations with regard to the divorce proceedings, think it necessary to go through the history of the marriage to seek whether there might be matters of misconduct which ought, perhaps as a matter of safeguarding the position of his client, be registered and included in the petition.

Therefore, there is a grave danger that there could arise the very mischief that we sought to avoid in the old procedures, whereby the barrel was scraped for every element of alleged misconduct that could be trumped up. There would be a danger of that arising, with the bitterness which in divorce proceedings is to some extent bound to arise, being aggravated and continued. That is why we have sought to limit that possible mischief by means of the amendment, which provides that the court shall: not have regard to the conduct of each of the parties"— in other words, that should be its basic approach— unless in the opinion of the court there exist such exceptional circumstances as would render it inequitable for such conduct to be disregarded".

We feel that in that way what is common ground between the noble and learned Lord and ourselves can best be achieved. As he has said, there is no difference in principle between us on this matter, but we feel that the way in which the problem is faced in the amendment is less likely to result in a renewal of the old mischief and in the miserable multiplicity of complaints about conduct again returning to proceedings. I beg to move.

Baroness Macleod of Borve

My Lords, I should like to say a few words, since I fear that I cannot agree with the amendment. Those of us in this country who try to follow the matrimonial law, and indeed some of the very sad divorce cases that we are told about, are conscious of the divorce judges and registrars who have always been gentle, perhaps in the rather old-fashioned sense, in that the wife has usually been given the benefit of the doubt. The judges have felt that they had to look after the woman and the husband had to pay. I am glad to say that the divorce judges still behave like gentlemen, even though during the last 10 years the social and matrimonial scene has changed considerably. The change has occurred partly as a result of the Sex Discrimination Act, and partly because many more women have had premarriage jobs, are now working, and can support themselves. To my certain knowledge the result of that situation is that by their behaviour wives are increasingly breaking up the family. This is happening far more often than it did 10 years ago, and in some cases wives are leaving their husbands and children to fend for themselves.

I know of many cases, but there is one particular tragic case that I should like, very briefly, to recount to your Lordships. The family was a happy one. The wife worked part time in a local bar. A man picked her up. She left the family—all her three teenage children—went off, and was able to earn her own living. The husband had to leave his job. In accordance with the old law they had to settle the home 50-50 between them. That meant that the husband and the three children had to leave their home because the financial circumstances did not permit the matter to be settled in any other way. The result was that the children suffered a very great lowering of standards and of income. That was the outcome when the conduct of the parties was not taken into consideration. Having instanced only that one case, which I know about very well, I feel that in such a context the conduct of each of the parties should be taken into consideration. In my view, that would be the only fair way of settling the problems facing both parties and the children.

Lord Denning

My Lords, when we considered this question in Committee my noble and learned friend the Lord Chancellor said that it might turn out to be a matter of words; I would disagree. The object of the amendment is in a way to keep the position roughly as it is at present. Let me for a moment recall the position when it was necessary to prove a matrimonial offence. We took conduct into account, and we had all of those scandalous cases with days and days of argument about whether, for instance, the wife was guilty of cruelty when she had not mended her husband's socks, or whether the husband was guilty of cruelty or bad conduct when he stayed out and went to the club twice a night. All those trivial allegations by one against the other were gone into by the courts at great expense, usually with legal aid.

The Act made all the difference. In the Court of Appeal we had to consider—and we followed Lord Justice Ormrod—how far conduct should be taken into account in the new dispensation when it was only in regard to the irretrievable breakdown of marriage, irrespective of who was the cause. We used the phrase, "obvious and gross". I think that it has helped reasonably well. Conduct is still taken into account when it is obvious and gross.

It seems to me that as the Bill now stands the court will say to itself, "We have to have regard to the conduct of the parties if it would be inequitable to disregard it". The court will say, "We shall have to hear what the conduct is, we shall have to inquire into it before we can say whether or not it is equitable to disregard it". So the court would once more be going into all the questions of allegations about conduct. That would be the position as the Bill stands. The court would feel obliged to go into the conduct if the party made an allegation about it.

Under the amendment the position would be quite different. The starting point would be that the court would not go into the question of the conduct unless there were exceptional circumstances. I can see the judge saying to counsel, "You want to raise conduct in this case; what are the exceptional circumstances?"

I would agree with the instances which the noble Baroness mentioned; they are obvious exceptional circumstances. I have tried many cases where the wife has been grossly at fault and has gone off and left the husband to fend for the children. That is certainly a case when conduct would be taken into account. Those are exceptional circumstances. In all the instances that I can conceive of the phrase "exceptional circumstances" will meet the case when the conduct is so bad that it ought to be inquired into before provision is made for maintenance. In other words, I think that in a way the burden of proof is put the right way in the amendment, and it is the wrong way in the Bill as it stands. So I would support the amendment.

Lord Hatch of Lusby

My Lords, I was not in any way questioning the sincerity or the instances given by the noble Baroness. I feel that she is being a little unfair to her gender—

A noble Lord

Sex.

Lord Hatch of Lusby

Gender. Take your pick. When she refers to the increasing number of women who leave their husbands and children because of the greater occupational mobility of women in recent years, one can understand this. I wonder, however, whether she has considered that even on the question of the allocation of the children, it is the woman who is normally most highly at risk. Let me explain briefly. If the judge decides that it is the husband who is to retain the care and control of the children, then it is also normal—I am not sure whether it is statutory—that it is the wife who has to leave the matrimonial home. It is much more difficult for a wife to leave a matrimonial home than it is for a husband. This is still in our social climate a matter of discrimination.

I take the case of a family with three children aged, say, between nine and 14. I remember particularly a comment that I think was made by my noble friend Lord Mishcon (if I am wrong, I am sure that he will correct me) either at Committee stage or Second Reading when he said that we all know that there are husbands' judges and wives' judges. There are many cases where a husband's judge will award the care and control of the children to the husband. Often, that leaves the wife, at least for a time, destitute and homeless. This arises once we have reintroduced the issue of conduct, of fault, of matrimonial offence. I agree with the noble Lord on the Cross-Benches that the amendment is designed to prevent the reintroduction of the concept of fault. That concept of fault is so liable to different interpretations by different judges that I believe that it should be taken out of the purview of the judge's interpretation.

I believe that there should be no risk of the reintroduction of the question of matrimonial fault that we have tried to remove, I think successfully, for many years. If it is reintroduced, then we are putting in the hands of judges decisions that should really not lie with them. The question of the responsibility for divorce should not be used to affect the care and control of the children, the control of the matrimonial home. This should not depend upon conduct. It should depend upon the interests of the children. It is only if it depends upon the interests of the children, irrespective of the conduct—unless it is really extreme conduct—of the spouses, that we are looking after the interests of those most damaged in a divorce case.

Lord Simon of Glaisdale

I venture to urge your Lordships to prefer the Bill and to reject the amendment for a number of reasons. In the first place, the Bill follows the final recommendation of the Law Commission, and that should prima facie weigh with your Lordships. Paragraph 39 of its report No. 112 states: We would accordingly propose to preserve a reference to the conduct of the parties as one of the specified list of circumstances to which the court should have regard in those cases where it would be inequitable to do otherwise. Any further elaboration can, in our view, best be left to case law development". That is precisely what the Bill does. Secondly, it seems to be almost universally agreed that conduct cannot be disregarded. In committee, the noble Lord, Lord Foot, was the only one to recommend its entire disregard. I think that even the noble Lord, Lord Hatch, did not go so far in his speech today. Certainly the noble Baroness, Lady Macleod, gave a convincing example of where it would be utterly unjust to neglect conduct, and the noble and learned Lord on the Woolsack gave many examples in Committee. If conduct is not to be disregarded, there seems to be no answer to what was stated by the noble Lord, Lord Coleraine, in Committee; namely, that if it is equitable to take conduct into account, why should one take it into account only in exceptional circumstances? No answer was given to that. I cannot see that any answer could be given.

So the question arises: is it possible to apply the criterion of equity? I think it was the noble Lord, Lord Mishcon, who, in Committee, said that this was an impossible criterion. I venture to disagree. The law can often say that if X is proved and if Y is proved, then the result Z shall follow. But, as often as not, the law cannot say that. It can only say that if a certain standard is reached, result Z will follow, or that if a certain standard is not reached, result A will follow. In one case, I had to consider some of the examples where the law takes that approach. I was not purposely exhaustive. But, even so, trying to run the gamut of the law, it filled two pages of the Law Report.

I shall give only two examples because they use the very word "equitable". They will be well within the cognisance of the noble and learned Lord, Lord Elwyn-Jones, and the noble Lord, Lord Mishcon. Is it just and equitable that a company shall be wound up? Is it just and equitable that a bankruptcy order shall be made? So far as I know, courts have no difficulty in applying that criterion. I have no doubt at all that they could apply it in the circumstances that your Lordships are discussing. There seems to be some fear that the form of words in the Bill will allow the resurrection of the minutiae of ancient matrimonial grievance. I regard that as utterly unreal. The judge will use his influence.

My noble and learned friend Lord Elwyn-Jones himself gave an example of a case in which he was engaged where he was discouraged from reviving ancient and minute grievances in that way, although one must remember that a stone can not only be smashed by a sledge-hammer; it can be worn away by the ceaseless dripping of rain upon it. So once you have conduct to be considered—and I think it is the universal view, with the exception of the noble Lord, Lord Foot, that conduct must be considered—you must consider the cumulative effect of conduct, any single instance of which in isolation might be derisory. So I would think that we should leave to the discretion of the judges to rule out of account and to discourage the completely trivial, such as my noble and learned friend mentioned. That is the fifth consideration.

Sixthly, it is said that divorce is now based on the breakdown of marriage and that we have banished the matrimonial offence and must not bring it in again. We have said no more than formally that divorce is based on breakdown, because the statute goes on to say that five matters shall be taken as conclusive proof of breakdown in the absence of proof that the marriage has not broken down. Of course, a petitioner has only to say, "I refuse to be reconciled"—and I have come across that myself in reconciliation proceedings in a foreign forum—and the marriage has unquestionably broken down irretrievably. One then looks to the five grounds. The first is adultery. Is that not a matrimonial offence? The second is what is compendiously called "intolerable conduct". That subsumes and in fact involves the former matrimonial offences of cruelty including, I would say, cumulative misconduct amounting to cruelty breaking the health of the other party—cruelty and constructive desertion. Are those not matrimonial offences? The third is desertion. Is that not a matrimonial offence? So it is quite unreal to say that, in any but a formal sense, we have banished the matrimonial offence and that we now have divorce based on the breakdown of marriage.

That that is so can be seen by looking at two schemes which did base divorce on the breakdown of marriage. One arose in the dissent of Lord Walker by himself in the Morton Royal Commission and the other was the scheme put forward by the committee under the Bishop of Exeter in the pamphlet Putting Asunder. Those were real schemes whereby divorce should be based on irretrievable breakdown.

Our present law is not so. There are subsisting matrimonial offences as I hope I have demonstrated to your Lordships.

My final reason is that the amendment reinstates the decision in Wachtel. My noble and learned friend Lord Denning said that in terms in Committee. What the Court of Appeal did in that case was to say that conduct was not to be considered unless it was gross and obvious. I say with all respect in his presence—respect for his eminence and because he is an old friend and I started in his chambers—that seems to me most improper judicial law-making. The question of conduct was exhaustively discussed in the 1969 legislation. The discussion went on for hours in Committee and if Parliament had wanted to say that conduct should only be considered if it were gross and obvious, then nothing was easier. It would be perfectly simple to devise the form of words. So in my respectful submission it was not for the Court of Appeal to insert those words in the legislation.

Finally, the courts have moved away from that. My noble and learned friend said today that this amendment keeps the position as it is. I venture to disagree. The present law was stated by my noble and learned friend on the Woolsack. He enumerated the cases which showed how far the courts have moved from Wachtel; and what this does, as my noble and learned friend said in committee, is to put the clock back to Wachtel and to disregard all that has been accomplished since. It is the Bill and not the amendment which preserves the law, as it is at present administered, so much more satisfactorily.

Lord McGregor of Durris

My Lords, with great trepidation I venture, in disagreeing with the noble and learned Lord, Lord Simon of Glaisdale, to attempt to answer his question about why conduct should only be taken into account when it is exceptional. My answer——

Lord Simon of Glaisdale

My Lords, I hope that the noble Lord will allow me to intervene because that was not quite the question that I asked. If it is equitable to take conduct into account, why is it only in those circumstances which are exceptional?

Lord McGregor of Durris

My Lords, I thank the noble and learned Lord. One reason why the word "exceptional" is in the amendment is that it is in line with ordinary people's experience. When one hears people talking about the collapse of a marriage of people they know or to whom they are related, they nowadays talk along the lines of saying, "Well, it is impossible to make any judgment; it is six of one and half a dozen of the other". That is the view that sensible outsiders generally take, except in circumstances where the behaviour of one or both of the spouses has been extreme or pathological. For ordinary people, for conduct to be taken into account it has to be exceptional because no one—and lay people are the same as lawyers in this regard—wants to go back to the squalid inquests on matrimonial behaviour. Given that fact, as the noble and learned Lord, Lord Simon of Glaisdale, rightly said, it is almost universally believed that conduct ought to be able to be taken into account when it is exceptional because otherwise people's sense of fairness and justice would be affronted. Hence the case for "exceptional". In support of this amendment, I am encouraged that this is the view which the Scottish Law Commission took. In its report on aliment and financial provisions I found its discussion of the significance of "conduct" and the circumstances in which it should be taken into account the most helpful of any that I have read, and its analysis provided the greatest clarification.

In its draft Bill it deals with conduct in terms of saying that the court shall not take account of the conduct of either party, except in two circumstances relating to what it calls a "transitional adjustment" to a new situation of one spouse who has been financially dependent upon the other, and in the circumstance in which divorce will cause grave financial hardship to a spouse who is elderly or ill. But the emphasis there is on not taking account of conduct unless it would be manifestly inequitable to leave that conduct out of account.

That seems to parallel very closely the terms in which this amendment is couched, and I think it is an amendment which will have more meaning for the husbands and wives who pass through the divorce courts than will the drafting of the present Bill.

The Lord Chancellor

My Lords, perhaps I may intervene at this stage without prejudice to some leave that I might have later. I believe that this debate has got off completely on the wrong foot. Before I elaborate my reasons for saying that, I ask only two questions. Why is conduct always assumed to be bad? It is not always bad. Secondly, what sort of conduct are we talking about? Are we talking about conduct which is relevant to the question of maintenance? The answer is: yes. Are we talking about who is responsible for the breakdown of the marriage? The answer is: no.

Having got that absolutely clear, let us try to get a proper legal analysis, because I must differ fundamentally from what my noble and learned friend Lord Denning says. I start with the existing law—I do not mean the Bill; I mean the words as they occur in the Act of 1973, which is the law which we are amending. At page 16 of that Act in Section 25 you will find that conduct is mentioned. Having enumerated the various factors to be taken into account which are relevant to maintenance, the section goes on to say: and so to exercise those powers as to place the parties, so far as it is practicable and, having regard to their conduct, just to do so, in the financial position". That is the existing law; that is the law the amendment of which we are discussing.

Therefore, in so far as my noble and learned friend Lord Denning spoke as if Wachtel had removed conduct from the law, he was defying the Act of Parliament which he was supposed to be interpreting, whether in Wachtel or in the speech which he has just made. Conduct is in the Act. In so far as the noble Lord, Lord Hatch, said that we are reverting to conduct, he was entirely wrong because conduct is already there.

No doubt Wachtel was a very good decision in its day. It is now nine years old and it is hopelessly out of date with the modern jurisprudence which has developed since Wachtel. Wachtel was a very good decision because it defeated an attempt to reintroduce what I think everybody is agreed ought not to be in the present law—it defeated the attempt to reintroduce the old and degrading experience of what, in shorthand, we used to call the "defended cruelty". We did ask the question in cases of defended cruelty, because it was relevant under the old law: who has overturned the marriage? But when one is talking about maintenance, one is not talking about who overturned the marriage, although in certain circumstances it may be relevant. One is talking about how much money usually the wife, but not always, should be receiving on the dissolution of the marriage.

Just let me remind the House, because I must now do so, of the jurisprudence since Wachtel. It very soon became apparent that, with due respect to my noble and learned friend Lord Denning, the words "gross and obvious" were a piece of judicial rhetoric, and a piece of judical rhetoric is not always very helpful in solving matrimonial disputes. Over the last nine years—and Wachtel is getting very long in the tooth—the registrars have found that in a series of cases there are very many occasions when the conscience of the ordinary man in the street is offended by disregarding conduct. But the conduct which it is inequitable to disregard is not who broke down the marriage, but, as often as not, how have they behaved since?

Let me just give one example to show how entirely wide of the mark my noble and learned friend Lord Denning is. Let us take the case of Kokosinski v. Kokosinski, which was reported in 1980, some several years after Wachtel. It was the wife's good conduct which affected the amount of her maintenance. The wife's loving support of her husband, her role in building up the family business during their long period of cohabitation or marriage was conduct which was to be taken into account and justified the award of a substantial lump sum. The noble Lord, Lord Hatch, who has constituted himself with great chivalry as the advocate of the wife, will surely not complain of that. But it is not exceptional. It is an ordinary case of a loving, caring wife, and her conduct, despite Wachtel and because of the words in the Act—which my noble and learned friend Lord Denning chose to disregard—was rightly taken into account as being relevant to maintenance.

Let us take another case where the conduct was bad: the case of Jones v. Jones was reported in 1976. The husband attacked the wife with a razor, causing her permanent injury so that her future employment as a nurse was in serious jeopardy. The capital provision awarded to the wife was greater than it would otherwise have been. Why? Because it had affected her capacity to earn a living, not because it had broken down the marriage and not because it was exceptional in the least. That sort of thing is happening in the divorce courts every day of the week.

In the case of Underdown, the wife's share in the matrimonial home was reduced because she was committing adultery with the co-respondent at the same moment as agreeing to the husband's proposal to transfer a half share in the house to her, as the husband expected the marriage to be long-lasting. Again, nothing unusual or exceptional; nothing to do with who broke down the marriage: that is not the question. The question is: what is the wife—or occasionally the husband—to receive in maintenance having regard to the sitution which actually exists?

In Bateman (reported in 1979) a wife knifed her husband and he was thereby unable to make payments and her financial provision was reduced. This is not, I hope, an everyday occurrence, but this type of case does come before the Family Division. The point, again, is not who broke down the marriage. That has, to some extent, gone by the board although, as my noble and learned friend Lord Simon of Glaisdale rightly pointed out, it arises at an earlier stage in the proceedings in deciding whether or not the marriage has irretrievably broken down. But we are not talking about that: we are talking about maintenance and lump sums. The wife knifed her husband and her financial provision was reduced. In another case the wife killed the children.

In Martin (reported in 1976) the husband's conduct dissipated £30,000 worth of capital, but it had to be taken into account in deciding how to deal with the family farm which the wife had managed to save as a viable concern. Again, the wife got more out of it because the husband dissipated his assets.

Let me give another common example. The husband deliberately decides to go on the dole rather than pay his wife maintenance. It is not the most common case; the most common case is that the husband marries again, but it is not at all uncommon or exceptional for that to happen: or the wife deliberately lives with a rich man but harasses her former husband although her means are adequate.

Conduct cannot be disregarded, and since Wachtel it has been found in innumerable cases that in order to assess maintenance you have got to take into account conduct where it is inequitable not to do so. The only difference between the Act and what is proposed in the Bill is that we have used the phrase as used in the jurisprudence which has developed since Wachtel. The phrase recurrent in the cases I have been enumerating is: Where it is offensive to a reasonable person's sense of justice that such conduct should not be taken into account in assessing the financial consequences of divorce". It has nothing whatever to do with the old defended cruelty or with who broke down the marriage. It is an inevitable consequence: if the wife harasses the husband and denies access, things of that kind have to be taken into account, so I do not think that as between me and the Front Bench opposite there is a moment of difference about policy. Nobody wants to return to defended cruelty and all those degrading episodes we saw in the past. As my noble and learned friend Lord Simon of Glaisdale said, in the light of the current jurisprudence of the Family Division that is simply not a starter; it will not happen. But the phrase which I have just read out and which is recurrent in the reported cases has been drafted into the Bill in slightly more legal language: conduct should be considered where it is inequitable to disregard it.

So far from the burden of proof being on those who would introduce conduct, the Bill—as the noble and learned Lord, Lord Denning, suggested—has been deliberately framed so that the burden of proof is against those who wish to introduce it; they have to show that it is inequitable not to do so. That is the Bill. I am sorry to have been at such pains to go through this exercise, but I felt I had to do so because the debate was getting into an utterly unrealistic state.

Now we come to the amendment and, as I say, I do not believe that there is an enormous difference of policy—if any—between the noble and learned Lord, Lord Elwyn-Jones, and myself; but there is a difference of words and of drafting about which I must stand fast. To begin with, the effect of his amendment is to take away from the conduct the essential factor which I have been trying to introduce into the debate: namely, the relevance of the nature of the conduct to the question of maintenance, and to put it on some exceptional circumstances outside the conduct altogether. The fact that it is exceptional is totally irrelevant to anything that I have been saying, and the effect of putting it as exceptional circumstances outside the conduct which I have been trying to discuss, has the effect not of going back to Wachtel—although that could conceivably be the result, although I do not think that is realistic—but of rendering totally obsolete the jurisprudence which has been carefully built up in the divorce courts in the series of cases to which I have been referring and which will continue to be cited by way of interpretation if the Bill is left as it stands; but which will become obsolete if it is amended in the way the noble Lord's amendment would achieve.

I had before me at the Committee stage an amendment very much to the same effect, if not in precisely the same words (I think it was in precisely the same words). I said that I would take it back because I think it is unreasonable when there is no difference in policy between us, as I believe, to take an intransigent attitude; but I went both to the judiciary, to my office and to the draftsman and they all came up with the same answer: that the Bill is better drafted as it is and the amendment would achieve undesirable results. I must therefore be firm about it.

I am sorry if I burst in on the debate but I thought I just had to say that because it seemed to me that we were indulging in a game of cross-purposes to such an extent that I had to intervene.

6.19 p.m.

Lord Mishcon

My Lords, what a treat the House has had in having such a learned argument between four eminent lawyers, and what a muddle the House must be in as a result! I promise the noble and learned Lord that I will not muddle my way through an argument; I will try if I may to be abundantly clear even if my arguments be wrong.

It is no part of the case for this amendment that it has anything to do with any matter other than financial provision. I concede at once, for the benefit of anyone who may have participated in this debate, that this has nothing to do with issues of custody, access or care and control, in all of which cases our law is abundantly clear: there is only one interest in the mind and heart of the court, and that is the interest of the children involved.

We get to the statement that the noble and learned Lord who sits on the Woolsack made in such deliberate and lucid terms, as to the existing law. Using that strength of voice that the Almighty has given him, he said that there is no doubt whatsoever that the present law—and the interpretation of it in this connection when one looks at conduct—has nothing to do with the responsibility of the parties for the breakdown of the marriage. He said that deliberately. He said it clearly and, with his usual co-operation, he is nodding his head.

I have before me the latest edition of Rayden on Divorce, which is known as the leading authority which guides all our judges in divorce in the Family Division. The edition is not only the latest edition but the learned editor makes it clear—and I quote him in his preface: The law is stated as at 22nd November 1982". I then turn to page 747 of that tome. It is paragraph 18. It is post-Wachtel and it is headed "Conduct: both obvious and gross." I quote as follows: A finding that one party has significantly contributed to that breakdown must be relevant on the issue of financial provision: but that does not mean that the party whose conduct is so described loses her right to provision, or indeed even loses her right to ample provision: that must depend on all the circumstances of the case. If there is misconduct of an obvious and gross character, the conclusion is pretty clear; if it is less than that, then a difficult value judgment is required of the court, but that of course is the sort of judgment that the courts exist to make". So the present law, according to Rayden, is undoubtedly that the question of contribution to the breakdown of marriage is the sort of conduct that the law has to consider in relation to financial provision: that there are aspects of that conduct less than gross and obvious that, on the present law, the court has to consider.

What happened with the Law Commission? One would have thought from the noble and learned Lord's remarks that the Law Commission, sitting upon this matter, had decided that the law was perfectly clear both in the existing Act of Parliament and in the judgments of Wachtel and post-Wachtel. Then all the Law Commission would have had to say—and the noble and learned Lord, Lord Simon of Glaisdale, almost implied that that was all it had to say—

Lord Simon of Glaisdale

My Lords, I said explicitly that that was the commission's final conclusion.

Lord Mishcon

My Lords, I am helped by that remark that that was the commission's final conclusion. All it had to say was, "We agree with the existing law and we agree with the way in which conduct is now being treated in our courts". That is not what was said at all. Although the noble and learned Lord correctly and fairly quoted from the report of the Law Commission, I know he would be the first who would in frankness agree with me that he merely quoted one sentence. I shall have to ask your Lordships to bear with me because there are some rather relevant sentences which he did not quote and which did not even appear to be interpreting the present law, because that is not what the Law Commission said.

In referring not to the law but to a discussion paper, the Law Commission's report of 14th December 1981 at page 13 paragraph 37, says: We adhere to the view"— not of existing law— expressed by us in the Discussion Paper that the courts as now constituted cannot reasonably be expected to apportion responsibility for breakdown in any save"— I hope the noble and learned Lord will listen to this word— exceptional cases". Again the commission uses the word "exceptional" without difficulty, although the noble and learned Lord who sits on the Woolsack found such difficulty on that word in the amendment. The commission goes on to say: This is because"— it quotes the words of Mr. Justice Ormrod, as he then was, in the case of Wachtel v. Wachtel— the forensic process is reasonably well adapted to determining in broad terms the share of responsibility of each party for an accident on the road or at work because the issues are relatively confined in scope, but it is much too clumsy a tool for dissecting the complex inter-actions which go on all the time in a family. Shares in responsibility for breakdown cannot he properly assessed without a meticulous examination and understanding of the characters and personalities of the spouses concerned, and the more thorough the investigation the more the shares will, in most cases, approach equality". In other words, what was the commission saying? It was saying as Rayden says, "That is what the present law requires a court to do. We do not recommend this. We say that, except in exceptional cases"—and it goes on to use words which it does not translate, as it normally does, into a draft clause in an Act. It merely says, to paraphrase, that, although it does, not want us to look into conduct on financial provisions, where it would be inequitable not to do so, then one has to do it.

The Lord Chancellor

My Lords, I do no want to interrupt this very interesting speech, but if the noble Lord reflects upon the passage he has read he will see that what is being said is what I was saying—namely, that of course there are cases where the relevance of conduct to the breakdown of marriage can be taken into account. But the commission goes on to recommend effectively what is in the Bill, namely that the only test of whether one takes it into account or not, whether it is in relation to the breakdown of the marriage or subsequent conduct, or continuing conduct, or apprehended conduct, is its relevance to maintenance.

That is what we are seeking to achieve. I think it is what the commission is saying, because there was the telling qualification in the passage which the noble Lord has read showing that in that passage the commission were relating themselves solely to the relatively unimportant case for this purpose of who is responsible for the breakdown of a marriage and not the point to which I was addressing myself.

Lord Mishcon

My Lords, I do not intend, and I know the noble and learned Lord will not think me discourteous in saying it, to go down the very path that he warned us all not to go down—that is, to enter into tortuous arguments which are not absolutely material to the matter we have before us.

The simple point is not difficult for anyone to comprehend. The Law Commission was saying, "Except in exceptional cases, keep conduct out of financial provision". The commission was saying that in a phrase, to be absolutely precise, where it would be inequitable not to do so.

Now I go to the very point, if I may say so with deep deference, that the noble and learned Lord, Lord Denning, was making so effectively. I speak very humbly as a practising lawyer. I repeat what I said at Committee stage. If there are in an Act of Parliament words which say that conduct shall not be taken into account, except where one can show that there are exceptional circumstances. I shall need to advise my clients, and my colleagues will be able to advise clients, that we shall be met at the very outset of the case—without going into conduct at all—with the very point that the noble and learned Lord, Lord Denning, posed: "Before you start on the issue of conduct, make your submission to the court as to why these are exceptional circumstances. Unless you jump that hurdle, this court will not hear you on the issue of conduct". And I shall be able to say, and colleagues in my profession will be able to say, to clients, "There is nothing exceptional in your case, I can tell you, which would enable me to get over that barrier".

Leave conduct in as one of the grounds that the court has got to look at, other than on the basis that it would be inequitable to ignore it, and I in my duty to my clients, and my colleagues in duty to theirs, will have to say that there are in different courts different ideas of equity in these circumstances. It has nothing to do with the petition and with "just and equitable", with respect to the noble and learned Lord, where the court does have to go into all the facts before deciding whether it is just and equitable—and he knows the lengths to which petition cases can go in those circumstances and the arguments on what is just and equitable at the end of it.

If these words remain, in my duty to my client I shall have to take him through all of it and say that I suppose that counsel, if he were someone who lives in the tradition of the noble and learned Lord, Lord Hailsham, who when he was Quintin Hogg was able to persuade most judges to do things that they possibly ought not to have done—I shall hope that counsel has that eloquence and ability—counsel will be able to persuade the Family Division judge that it would be inequitable to ignore this conduct. As the noble and learned Lord, Lord Denning, said, there is no question of it being clear where the onus lies—not at all—of a normal submission by any practitioner doing his duty to his client. And that is what we want to avoid by this amendment; and that is why this amendment is better than the wording of the Bill. I say this, with due deference, in accordance with the recommendations of the commission, even if one does not slavishly follow the words that they have used and which they did not put into a draft clause of the Bill.

6.33 p.m.

Lord Foot

My Lords, it is very difficult to follow a speech of that kind; and it may well be thought by the House that this matter has already been discussed enough. But I should like to add a word or two for one reason. That is because, as the noble and learned Lord, Lord Simon of Glaisdale, remarked, in the Committee stage, as he said, I was the only person who recommended that conduct should be disregarded altogether. I think that inadvertently he does me a minor injustice because we never got round to my amendment when I was proposing that conduct should be disregarded altogether.

Lord Simon of Glaisdale

My Lords, if I did the noble Lord an injustice, I apologise but I was not present. I read his speech very carefully and I thought that he had made it quite plain that that was his preferred solution.

Lord Foot

My Lords, that is quite right, but the noble and learned Lord has jumped in too soon because what I was about to say was that he had said that I was the only person who took that view and that that was carrying the matter too far because it was not a debate upon my amendment and therefore it was impossible to judge whether I had any support from other parts of the Committee; but that is a very minor matter.

I have listened, as no doubt has everybody, with the greatest possible interest to what has been said by the noble and learned Lord the Lord Chancellor and to what has been said in reply by the noble Lord, Lord Mishcon. As I understand what the Lord Chancellor was saying, it is that, since the 1973 Act, when the courts have been called upon to interpret the reference to conduct in the 1973 Act they have come to different conclusions. The court of first instance in Wachtel, who was Mr. Justice Ormrod, if I remember rightly, came to one conclusion as to what the reference to conduct should mean—that is, the reference as contained in the 1973 Act. It was he and not the noble and learned Lord, Lord Denning, who had lit upon the words "gross and obvious". Those words were invented by Mr. Justice Ormrod and they were approved of when the matter got up to the Court of Appeal.

As I understand it, the reason why Mr. Justice Ormrod, in the first instance, and the Court of Appeal subsequently, came to the conclusion that that is what the words ought to mean, and did mean, was that they looked back to the origins of the 1969 Act and said that the whole rationale of the Act is to try to eliminate once and for all the old conception of fault and blame and conduct and to try to put the matter, once and for all, upon the basis of the irretrievable breakdown of the marriage.

Therefore, trying to interpret the words about conduct in the 1973 Act was an attempt by Mr. Justice Ormrod—and then later by the Court of Appeal—to pronounce as to what the words meant, bearing in mind the whole history of the divorce law. They came to that conclusion, that the words must mean something like gross and obvious. It could not have been intended, they said to themselves, that the Legislature intended to restore the whole question of fault and blame—that could not have been their intention. Therefore, their intention must have been something different. Of course, the conclusion to which they came was the conclusion which has already been quoted by the noble Lord, Lord Mishcon: the words that were used by the Law Commission quoting the words of Mr. Justice Ormrod.

As I understand it from the noble and learned Lord the Lord Chancellor, subsequent to that other courts have been called upon to pronounce as to what they think those words in the 1973 Act mean. And they have come to a more modest conclusion (if I may put it like that) than did the Court of Appeal. The noble and learned Lord the Lord Chancellor said that if you look at the whole history of this matter, if you look at the jurisprudence—by which I understand him to mean decided cases since the Wachtel case—you will find that the courts have built up a jurisprudence which does not support the conclusions to which the Court of Appeal came.

I am not at all sure that I am not on the side of the Court of Appeal. Indeed, does not the very fact that the judiciary have differed so markedly on the interpretation of this matter arise from the fact that in the 1973 Act there was no proper definition of the conduct which the courts thought to take into account? It all arose from that, that the words in the original Act—that is to say, that, having considered all the guidelines, the court should then consider whether it was practical and whether it would be just to take conduct into consideration—were an inadequate definition of what the Legislature had in mind, because those words have been so variously interpreted by different authorities ever since.

What this amendment seeks to do, as I understand it, is to try in effect to restore the substance of the decision in Wachtel and to make that the law of the land from now on. I see no particular difficulty in doing that, and surely this amendment has this great virtue. May I say that I am no longer adhering, of course, to the position that we ought to eliminate conduct altogether. I am prepared to concede that there must be occasional cases where the conduct of one of the parties has been so scandalous or shameful that it cannot really be disregarded, even in the limited matter of ancillary relief.

But the proper course in this matter is to lay it down that, in considering whether conduct should be taken into account in an application for ancillary relief, for maintenance or financial provision, the proper starting point is to say, "No, disregard that. The presumption should be against conduct, so that we do not go down the slippery slope of discussing how the marriage broke up, and so on". That should be the presumption and it should be set aside only if there are exceptional circumstances in the case.

I should like to follow with two arguments which were put by the noble and learned Lord the Lord Chancellor in Committee. On that occasion, if I remember rightly, he opposed this very same amendment upon two grounds. First, he said that there was a particular difficulty about the words "exceptional circumstances", because the circumstances referred to appeared to be extraneous to the conduct. I hope that I have interpreted correctly what the noble and learned Lord said. I think that he is nodding his head which I am glad about—

The Lord Chancellor

My Lords, I said it again this time.

Lord Foot

My Lords, I find it almost inconceivable that I should have missed any words that fell from the lips of the noble and learned Lord, but if I have done so I apologise. The other point he made was that if you were to ask the court to take into consideration exceptional circumstances, they would have to be circumstances which existed at the time when the court made its decision. That I do not think the noble and learned Lord said this evening, but I hope that I have interpreted him correctly.

May I say—and I say it with some diffidence—that those are two of the most esoteric arguments that I have listened to in recent times. Will any registrar or any court be in any sort of difficulty in trying to come to a decision as to the meaning of the words of this amendment, that they shall, not have regard to the conduct of each of the parties unless in the opinion of the court there exist such exceptional circumstances as would render it inequitable for such conduct to be disregarded"? If I may take the noble and learned Lord's points in reverse order, when he said that the court could only take into account exceptional circumstances existing at the time when it had to make the decision upon ancillary relief, I suggest that he was really and simply wrong. If you get an application by a wife for maintenance which goes before a registrar and there has been some exceptional conduct by one of the parties in the course of the marriage or soon after, is that not an exceptional circumstance in the whole case? Do the exceptional circumstances have to be something that happened precisely yesterday? Surely the court is entitled to look back and decide whether or not the conduct is indeed exceptional.

On the noble and learned Lord's first point, that the circumstances would be extraneous to the conduct, again I should have thought that this was a form of word bargaining. I cannot help thinking that any registrar, faced with the legislation in this amended form, will have no difficulty whatever in saying that what is being talked about here is conduct of an exceptional nature; in other words, linking the circumstances with the conduct as being the intention of the Act.

Finally—and I am sorry to have gone on for such a long time—unless we do something of this kind, and if we pass this Bill and this clause as they are now framed, will there not be the greatest difficulty in the courts, among registrars and among the people who have to deal with this sort of matter, in deciding the meaning of words which state that you should have regard to conduct only where it would be inequitable not to do so? Are we giving any satisfactory indication to the courts of the land as to what we intend by that?

The Law Commission stated that that was their recommendation, and went on to say: We would accordingly propose to preserve a reference to the conduct of the parties as one of the specified list of circumstances to which the court should have regard in those cases where it would be inequitable to do otherwise. Any further elaboration can, in our view, best be left to case law development.". But how long will it be before we get a conclusion, possibly from the House of Lords itself, as to the proper meaning of those words? We shall quite possibly go through a long period of grave uncertainty as to what those words mean, with their being interpreted in a different sense by one court or another, and it may be many years before this important matter is brought to some kind of settled resolution. In my view, this debate this evening will possibly be as important a debate as we shall have had upon this Bill, and I certainly hope that we may find sufficiency of support throughout the House for this amendment.

The Lord Chancellor

My Lords, before the noble Lord sits down, perhaps he will allow me to say that every case that I cited was, I think, a decision of the Court of Appeal. I think he gave the impression that I was saying that the Court of Appeal was wrong. Every case that I cited with approval was a post-Wachtel decision of the Court of Appeal, so far as I know.

Lord Foot

My Lords, if I may say so, using the words that Dr. Johnson used on one occasion, it was the result of pure ignorance.

Lord Elwyn-Jones

My Lords, we have traversed this ground in depth and at length, and I think the time has come to make a decision. We who have supported the amendment are impenitent in our view that it is clear where the Bill would be unclear. It establishes quite clearly that conduct should be disregarded save in exceptional circumstances, and I venture to think that, for example, the illustration which the noble Baroness gave would clearly be caught as an exceptional circumstance. I also venture to think that the recently decided cases would all be caught, in practice, under the language of this amendment as indicating exceptional circumstances. I see no advantage in retraversing the ground. I hope that the noble and learned Lord, Lord Denning, is just as impenitent as I feel myself. He nods his head. If I may say so, he is not usually penitent. Accordingly, I invite the House to come to a decision upon this amendment.

6.50 p.m.

On Question, Whether the said amendment (No. 4) shall be agreed to?

Their Lordships divided: Contents, 59; Not-Contents, 86.

DIVISION NO. 1
CONTENTS
Airedale, L.	Foot, L. [Teller.]
Ardwick, L.	Glenamara, L.
Bishopston, L.	Graham of Edmonton, L.
Briginshaw, L.	Gregson, L.
Brimelow, L.	Hampton, L.
Brockway, L.	Hanworth, V.
Brooks of Tremorfa, L.	Hatch of Lusby, L.
Carmichael of Kelvingrove, L.	Hylton-Foster, B.
Cledwyn of Penrhos, L.	Jacques, L.
David, B.	Jeger, B.
Dean of Beswick, L.	Kagan, L.
Denning, L.	Kilmarnock, L.
Diamond, L.	Kinloss, Ly.
Elwyn-Jones, L.	Llewelyn-Davies of Hastoe, B.
Ewart-Biggs, B.	Lockwood, B.

McCarthy, L.	Raglan, L.
McGregor of Durris, L.	Rochester, L.
McIntosh of Haringey, L.	St. Davids, V.
Mais, L.	Shinwell, L.
Mar, C.	Stewart of Alvechurch, B.
Marsh, L.	Stewart of Fulham, L.
Melchett, L.	Stoddart of Swindon, L.
Milner of Leeds, L.	Stone, L.
Milverton, L.	Taylor of Blackburn, L.
Mishcon, L.	Tordoff, L.
O'Brien of Lothbury, L.	Underhill, L.
Pitt of Hampstead, L.	Wells-Pestell, L.
Ponsonby of Shulbrede, L. [Teller.]	Whaddon, L.
	White, B.
Prys-Davies, L.	Wigoder, L.
NOT-CONTENTS
Airey of Abingdon, B.	Kitchener, E.
Ampthill, L.	Lane-Fox, B.
Bellwin, L.	Lauderdale, E.
Bessborough, E.	Long, V.
Brabazon of Tara, L.	Lucas of Chilworth, L.
Brougham and Vaux, L.	Lyell, L.
Caithness, E.	Mackay of Clashfern, L.
Campbell of Alloway, L.	Macleod of Borve, B.
Carnegy of Lour, B.	Mancroft, L.
Carnock, L.	Margadale, L.
Cathcart, E.	Marshall of Leeds, L.
Coleraine, L.	Merrivale, L.
Colville of Culross, V.	Mersey, V.
Colwyn, L.	Molloy, L.
Cork and Orrery, E.	Monson, L.
Cottesloe, L.	Morris, L.
Craigavon, V.	Mottistone, L.
Crathorne, L.	Mowbray and Stourton, L.
Croft, L.	Murton of Lindisfarne, L.
Cullen of Ashbourne, L.	Norfolk, D.
Davidson, V.	O'Neill of the Maine, L.
Denham, L. [Teller.]	Onslow, E.
Eccles, V.	Orkney, E.
Effingham, E.	Pender, L.
Elton, L.	Renton, L.
Faithfull, B.	Rochdale, V.
Forester, L.	Rodney, L.
Fortescue, E.	St. Aldwyn, E.
Fraser of Kilmorack, L.	Saltoun, Ly.
Gardner of Parkes, B.	Sharples, B.
Gisborough, L.	Simon of Glaisdale, L.
Glanusk, L.	Skelmersdale, L.
Glenarthur, L.	Somers, L.
Gowrie, E.	Strathcona and Mount Royal, L.
Gray of Contin, L.
Grimston of Westbury, L.	Swinton, E. [Teller.]
Hailsham of Saint Marylebone, L.	Thomas of Swynnerton, L.
	Tranmire, L.
Henley, L.	Trefgarne, L.
Hives, L.	Trumpington, B.
Hornsby-Smith, B.	Vaux of Harrowden, L.
Inglewood, L.	Vickers, B.
Killearn, L.	Vivian, L.
Kinnoull, E.	Whitelaw, V.

Resolved in the negative, and amendment disagreed to accordingly.

6.58 p.m.

Baroness Lockwood moved Amendment No. 5:

Page 3, line 29, leave out from ("future") to end of line 33.

The noble Baroness said: My Lords, this amendment is concerned with the financial arrangements that the courts will be called upon to make in favour of one party or another in connection with a divorce. We are looking at the criteria which will be applied in those circumstances. We considered this matter in Committee. On that occasion I moved an amendment which sought to add to the criteria that were listed in the new Section 25(2)(a). It was felt by some of my friends that the amendment I was then moving was too detailed. Although it obtained considerable support from the Committee the amendment was, in the event, lost.

The noble and learned Lord the Lord Chancellor expressed the view on that occasion that there might be room for some improvement of the drafting of this new section, but since then he has very courteously written to me to say that, having looked at the drafting of the new section, both he and the draftsman are of the opinion that the drafting gives effect to the recommendations of the Law Commission. I am still not happy with the drafting of this section. Therefore my amendment seeks to remove some of the words in the new section 25(2)(a). In other words, it seeks to take away from the criteria laid down in the Bill.

When I moved my amendment in Committee, I believe that it was the noble and learned Lord, Lord Rawlinson, supported by the noble and learned Lord the Lord Chancellor, who said that the wording I was seeking to add was otiose. If that is so, I would suggest that the wording which I am now seeking to remove could also be described as otiose. If one looks at the new section it says that: the court shall in particular have regard to the following matters— (a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future".

I am seeking to remove the second part of paragraph (a) because even if the view is that it is not otiose, what it does is to draw, unnecessary attention to that aspect of Section 25. It will be very difficult for the courts to determine what is "reasonable" to expect a party to the marriage to do in the future. How can the courts determine the kinds of steps that a party may take to acquire an improvement in earning capacity?

For example, as I said in the previous debate, it will depend on employment prospects. It will depend on the training facilities which are available. It could be that a wife—and I am using the expression "wife" although I accept, as we have accepted throughout, that it could easily be the husband—has no qualifications but would like to obtain qualifications. She might try to add to her O levels by taking A levels, in order to proceed to higher education, with a view to moving into a professional job. There is no way in which the courts could envisage that kind of career pattern developing. Yet that is the kind of approach which many women take when faced with a crisis of this kind.

It must be obvious that in seeking to remove the second part of this paragraph, I am not opposed in any way to encouraging women to prepare for the future and to look at their financial prospects for the future, in the event of a divorce. Indeed, it must be pretty obvious to us all—because, regrettably, most of us know of partners who have been involved in a divorce—that many of the women who find themselves in such a situation attempt to obtain a job and go out to work; or if they are already working part-time, they often try to find a full-time job. They do so because it is necessary; but in many ways they do so also because it gives them a new kind of independence, which is a form of compensation for what they have lost in the divorce. But this particular paragraph seems to push women into a situation when they may not be ready to be pushed into such a situation. We need to leave them to develop at their own pace.

The noble and learned Lord the Lord Chancellor has said on a number of occasions that we are concerned with only a small group of people in these particular circumstances, because the majority of women involved will already be covered by the criteria of the Bill. While I accept that argument to some extent, more women are likely to be in this situation than perhaps the noble and learned Lord takes into account. I am not just concerned with the woman who has small children or with the elderly woman, who I am fairly confident will be dealt with in the provisions of the Bill. I am thinking of women in the middle age group—those aged between 35 and 50—who are already, at that point, thinking in terms of moving back into the labour market and trying to re-establish themselves in their careers. In a situation such as divorce, they very often need time to recover and to make their own decisions—and they should not be pushed into a situation.

During Second Reading I said it had been put to me by a national women's organisation—not a pressure group but a national women's organisation whose views had been sought by the Government on many issues of this kind—that the whole effect of this Bill will be to cause women to look over their shoulders almost all the time and ask themselves, "Can I give up my job? Is it right that I should give up my job in order to have children or to care for my children? If I do that, might I not find myself in difficult circumstances in the future?" It is this particular paragraph which gives rise to that point of view, and to apprehension which I believe nobody in your Lordships' House would wish to foster. I suggest that if we cannot add to the Bill it would be better to subtract something from it, and to conclude paragraph (a) at the point at which I am suggesting it should be concluded.

In conclusion, may I just say that I know the noble and learned Lord on the Woolsack has been very concerned about the opinion he feels has been whipped up against this Bill. I would assure him that the fears of women about this aspect are very real. My noble friend Lord Mishcon said in an earlier debate that most of the publicity surrounding the Bill was caused by supporters of the Campaign for Justice in Divorce. I very much agree with him on that. I should like to ask the noble and learned Lord the Lord Chancellor whether he has seen the article which was published in the Spectator a couple of weeks ago, because that was a quite monstrous article.

The Lord Chancellor

My Lords, I must be totally honest to the noble Baroness at once; I was in New Zealand at the time, and I have not read the article.

Baroness Lockwood

My Lords, I am sorry that the noble and learned Lord has not read it, because I was just about to say I am sure he does not need me to protect him from scurrilous articles of this description; I am sure he is capable of looking after himself, and I hope he will look at it very carefully and take steps to reject it. It states that he is eating out of the hand of Campaign for Justice in Divorce. It is that kind of publicity which really has done much more than the activities of the women's groups to undermine confidence in this Bill.

What I am trying to do in this amendment is to remove what I now regard as an objectionable part of this clause, in an attempt to try to assuage the distrust that has arisen about the Bill, and also to make the Bill fairer and more effective in relation to women when they find themselves in this unfortunate situation. I beg to move.

7.11 p.m.

Baroness Gardner of Parkes

My Lords, I should like to support the noble Baroness, Lady Lockwood, in this amendment, although my reasons for doing so are entirely different from the points she made. I have not at all viewed this amendment in the light in which she spoke about it. I have certainly not thought of it as a sexist point, because I have considered that it could apply equally well to a man and to a woman. After all, what is the man doing to become managing director of the firm, and why is he not doing it? Is he not doing it just to prevent the ex-wife getting more money? This is another way of looking at the point.

My reason for supporting the amendment is that I believe the wording up to the point "foreseeable future" really does cover every possibility and the wording thereafter is superfluous. In particular, I was concerned with the words "earning capacity". I sit very regularly as a member of an industrial tribunal, and one of our duties in many cases is to assess what people's future earning capacity is. I can assure your Lordships this is an almost impossible task. No one has any way of knowing how long it will be before someone gets a job, much less a promotion or a better earning prospect, as is suggested can be obtained by taking these steps to acquire it. If even in the industrial tribunals—and I am sure the courts must have similar experience—it is difficult enough for us to assess the foreseeable future, which is actually included in the part of the text to be retained, to assess anything beyond the foreseeable future is really nothing but asking for a bit of crystal ball gazing.

There are so many personal circumstances which could affect one's future. Who knows what one's health will be next week, next year? Who knows how we shall be able to carry on in any employment if we do get it, or who knows the future of the business in which we might find ourselves? We hear all the time of enterprises that break down. I am constantly meeting cases in the industrial tribunal of people being made redundant, people who had never envisaged redundancy, people who saw a goal and future ahead of them, and indeed might well have imagined themselves taking all sorts of steps to rise much higher in the company they were in. I do think that this latter part of this clause calls for an assessment of an item which is impossible to assess. Although I appreciate the points made by the noble Baroness, Lady Lockwood, it is really because of my industrial tribunal experience that I would support her in this amendment, and would hope that the noble and learned Lord will pay some heed to my comments.

Baroness Faithfull

My Lords, when the noble and learned Lord comes to reply, I wonder whether he could define "earning capacity", because people with a very good background who could earn a lot of money may find themselves living demographically in an area where, although they have high earning capacity, there is no job for them to do. I would be very grateful to know what the words "earning capacity" cover.

The Lord Chancellor

In this deafening silence, my Lords, I suppose I ought to say something. I am a little puzzled by the speeches which have been made. I just do not understand, nor did my noble friend Lady Gardner of Parkes understand, why the noble Baroness, Lady Lockwood, should think that this particular clause or these particular words which she proposes to omit are aimed at wives. It is a scattergun which applies equally to either sex.

Baroness Lockwood

My Lords, if I may interrupt the noble and learned Lord, I hope he will recall that I did say that I was referring to wives but it could equally apply to husbands.

The Lord Chancellor

Yes, my Lords, but the speech was entirely about wives, and so it was understood by my noble friend on the Back-Bench opposite. In fact, I should have thought that, as the normal payer of maintenance is more often a husband than a wife, husbands had more to fear than wives statistically, though wives are no doubt equally concerned with husbands to have justice done to them.

Suppose a husband has got a regular promotional increment, the court will have to take account of the fact that he is likely to go up from grade to grade as his career develops. It would be quite wrong and unjust to the wife for it not to do so. I agree, as I have said again and again and again—and I hope I do not have to say it very many more times—that wives who are divorced, especially after a marriage of some duration and especially where there are children, do suffer from a disadvantage of which the courts must always be aware.

But at the same time one would hope that, as the divorce recedes into the background—although some wives' earning capacity is completely destroyed by a long marriage, I have known that happen, and if they have to continue to look after young children it will continue to be impaired and to some extent possibly in extreme cases even destroyed—they will in fact be less disadvantaged (if that is the right word) than they were at the beginning.

There is nothing sexist in either direction about this. It is telling the court to take into account, among the other things, not merely the existing earning capacity but any increase in earning capacity which it would be in the opinion of the court reasonable to expect a party to the marriage to take steps to acquire. I would think it was also a warning to husbands, who are not always very eager to pay their ex-wives large sums by way of maintenance, that, if instead of earning money, they went off to the South Pole to enjoy an expedition rather than pay their wives maintenance, they might find it a more expensive expedition than they had hoped, if these words are left in the Bill.

My noble friend Lady Gardner of Parkes quite rightly drew attention to the fact that to some extent the future is a matter of speculation. I think she overestimated the difficulty. In most cases future earning capacity can, to a large extent, be assessed and it can be assessed with accuracy where there is a regular career structure inside the profession to which either party may belong. So I do not think there is a great deal of difficulty there. But I say to my noble friend, with respect, that if a mistake is made by the courts—and all courts will make mistakes from time to time; we have no pretence of being infallible—the right course is for the disadvantaged party of the mistake to apply immediately for a variation, which they can do. Therefore, that can be put right.

My noble friend Lady Faithfull asked me to define the words, "earning capacity". They are dictionary words which do not require a separate legal definition. I think I have said enough already to give examples of what is meant by earning capacity. It is what you can reasonably expect to earn in the future. I do not see what the objection is to those words which the amendment proposes should be omitted.

The noble Baroness, firing her first barrel before going on about wives, said the words were superfluous, but they did not appear to be superfluous to my noble friend, Lady Gardner of Parkes. On the contrary, she objected to them because they meant too much. I think they are just about right. On the whole I resist the amendment, without any disrespect to any of those who have taken part in the debate, because they have all been very friendly to me.

There is one other thing I should have said. I have no idea about this Spectator article. However, the noble Baroness ought to recognise that not only is it not in my character to eat out of other people's hands, but, as I said on Second Reading, there is nothing in the Bill which has not been recommended by the Law Commission. Even if I am eating out of anyone's hands, it is out of the Law Commission's hands.

Lord Elwyn-Jones

My Lords, the noble and learned Lord the Lord Chancellor could not have been more remote from the scene when the offending article appeared, by going to the Antipodes.

7.23 p.m.

Lord Foot

My Lords, if the noble and learned Lord has not yet seen the article he has a surprise in store for him. Certainly it will make interesting reading for him tomorrow morning over breakfast.

I should like to make two comments on this matter before we move on. I proposed this same amendment in Committee but it did not achieve any greater success on that occasion than it has on this. Two points have been made by the noble and learned Lord on which I should like to say something. First, he again expressed surprise, as he did before, that the noble Baroness. Lady Lockwood, should have talked about wives when, as he says, these words are equally applicable to men and to women. There are two reasons why it is sensible to make special reference to wives. One is that that was the attitude taken by the Law Commission itself, because it discussed this matter—this appears on page 10, paragraph 26—under the heading: Greater weight to be given to a divorced wife's earnings capacity". The reason why the words have been inserted in the Bill is that they were recommended by the Law Commission in order to give greater weight to the divorced wife's earnings. Nothing was said about husbands.

The second reason why it is perfectly reasonable to think that these words have a special application to women is that in the great majority of cases it is the woman who is the recipient of maintenance. Therefore, the implication of these additional words has a particular bearing upon the situation of former wives. This is one of the changes made in the law which has been the cause of considerable apprehension on the part of women and wives.

I listened on Second Reading and in Committee to the noble and learned Lord explaining that this Bill was even-handed as between husbands and wives and that the apprehensions which had been aroused were unfounded and often due to active misrepresentation, and so on. But, if one comes to think of it, there is good reason why there has been this considerable apprehension among women. It arises from the fact that in Part II of the Bill, which deals with financial provision, where one finds any changes from the previous law—bearing in mind that in matters of maintenance the great majority of recipients of maintenance are women—every change suggested and incorporated appears to be disadvantageous to the recipient of maintenance.

The first major change—that is, that the first priority shall be given to the welfare of children—is obviously, whatever else one may think of it, not noticeably to the advantage of the ex-wife. New Clause 25A does three things. It first of all directs that the court shall in considering the whole matter of maintenance have regard to the possibility of having a terminal date for any maintenance order. Secondly, it states that the court shall have regard to the possibility of making an order for maintenance only for so long as it may be necessary for the party receiving it to readjust. Thirdly, of course, it says that where an application is made for maintenance—again I point out that in the vast majority of cases it is an application by the wife—in those circumstances where the court decides against granting the application it shall be able to order that the wife shall not at any future date be able to resurrect the whole matter.

All those matters appear to potential ex-wives—if I may put it like that—to be disadvantageous to the woman. That is why I believe these apprehensions have been aroused. I suggest that precisely the same criticism can be made of these words which are now imported into the Act. I believe the noble and learned Lord said that there was complete disagreement between the noble Baroness, Lady Gardner of Parkes, and the noble Baroness, Lady Lockwood. I did not understand that to be so. I think the noble Baroness, Lady Gardner of Parkes, used the word "superfluous" about these words and the noble Baroness, Lady Lockwood, used the word "otiose", which is much the same. The reason why the words are unnecessary is that if one looks at the earlier words, which appeared in the preceding legislation, it states that the court shall have regard particularly to—among other things—the earning capacity of each of the parties to the marriage or the capacity which that person is likely to have in the foreseeable future. Is not that exactly the same as saying, as the new words say, that the court shall also have regard to any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire"? It is because the words appear to the outside world to be to the disadvantage of the woman that they, among other words, have caused so much apprehension.

At an early stage of the Bill in the Second Reading debate I thought that many of the apprehensions that had been expressed before the Bill reached this House were unfounded. I came to that conclusion largely because of the speech that the noble and learned Lord the Lord Chancellor made and because of the speech that we had from the noble and learned Lord, Lord Scarman. I am sorry to say that in the debate which has taken place in the country since then in all sorts of ways these apprehensions are still being expressed. The insertion of those words only gives force and substance to those apprehensions.

Baroness Lockwood

My Lords, I am grateful to the noble Baroness, Lady Gardner of Parkes, for pointing out on the basis of her experience how difficult it is to assess future earning capacity. I am also grateful to the noble Lord, Lord Foot, for pointing out to the noble and learned Lord the Lord Chancellor that my remarks were not sexist or based on sexism. Indeed, as the noble Lord pointed out, the Law Commission made reference to the need to encourage women to move towards greater financial independence. I thought that one of the overriding principles behind the Bill was so that we could move to a situation where, if it were possible, there could be a clean break. Surely this clause has that in mind. It is preparing people for the clean break.

I was rather surprised at the speech of the noble and learned Lord the Lord Chancellor. In reality we are talking about the position of wives. They have less earning capacity. The purpose of the Bill is to encourage them to improve that capacity and to be financially independent. By and large, husbands are the ones who provide the maintenance. If we are talking about husbands, with few exceptions—and I do not think that there will be many who go on an expedition to the South Pole—their earning capacity and career pattern are much plainer than those of wives. If we consider the matter in the context of the whole Bill and of the Law Commission's report, I suggest that in this clause we are talking about the likely future earning capacity of wives.

On Question, amendment negatived.

Baroness Trumpington

My Lords, hunger is getting the better of us all. I beg to move that further consideration on Report be now adjourned. It is proposed that, for further consideration of the Matrimonial and Family Proceedings Bill, the House should resume again at 8.35 p.m.

The Lord Chancellor

The Question is, That the House do accordingly proceed to the next business.

Motion moved, and, on Question, agreed to.