HL Deb 20 November 1984 vol 457 cc529-36

5.24 p.m.

Lord Cameron of Lochbroom

My Lords, I beg to move that this Bill be now read a second time.

The Bill, apart from minor provisions relating to the reciprocal enforcement of maintenance orders, extends to Scotland only. It has three principal objects: first, the comprehensive reform of the law of aliment; secondly, the establishment of statutory principles to be followed by the courts in making orders for financial provision on divorce; and, thirdly, the clarification of the law relating to the property rights and legal capacity of married persons.

The provisions in the Bill are based upon the recommendations in two reports of the Scottish Law Commission—the first on aliment and financial provision and the second on matrimonial property. Before submitting these reports the commission followed their accustomed procedure of issuing a consultative memorandum and considering the comments which they received. As a result their proposals are comprehensive and have attracted a wide measure of support which I am confident will include that of your Lordships. I should like to pay tribute to the excellent work which the commission have done in a complex and important field of family law.

In Scotland, liability for aliment—that is, financial support for others on account of kinship or marriage—at present depends on a complex set of common law and statutory rules, which are in many instances obsolete and anomalous. The commission's general approach was to seek some justification for an obligation of aliment other than the mere existence of a blood tie. for instance that someone such as a parent or spouse had assumed this obligation. A legal obligation of support between remote relatives or of adult children to their parents was clearly an anachronism. It was moreover discriminatory that the primary obligation to aliment a child should rest on the father irrespective of the resources of the mother. What is required is a fresh statement of the law of aliment in clear terms and on consistent principles. Clause 1 accordingly provides that the sole legal obligation of aliment should be owed by a husband to his wife, by a wife to her husband, by a father or a mother to his or her child, or by a person to a child who has been accepted by him as a child of his family. (I should perhaps emphasise that the obligation of aliment by a parent to a child exists whether the child is legitimate or illegitimate, whether the parent is unmarried, married or divorced. Thus the clauses later in the Bill dealing with financial provision on divorce are not directly related to the rights of children to aliment.)

The commissison also proposed extensive clarification and improvement in the law relating to actions and claims for aliment. Clauses 2 to 7 make appropriate provision on title to sue, on the jurisdiction and power of the courts and the considerations to which they should have regard when deciding on the amount of aliment, on the power of the court to award interim aliment, and also on agreements on aliment. The Government consider that the changes represent a necessary modernisation and codification of the law which will be generally welcomed.

I cannot predict a similar general welcome with quite the same degree of confidence for the measures relating to financial provision on divorce—primarily Clauses 8 to 23—even if it is agreed that they provide a much better framework for securing a just financial settlement. I should make it clear, in case there is any doubt, that this Bill does not make any changes in the law of divorce but is concerned with financial arrangements once divorce takes place following the irretrievable breakdown of a marriage. One of the hopes is that clearer exposition of the factors to be taken into account will enable parties to reach agreement for financial provision with less animosity and recrimination and will help them to arrange their affairs in an amicable and equitable manner.

The present law provides no guidance to the courts as to what is the objective of financial provision on divorce. It simply enables either party to the marriage to apply for financial provision, by way of a periodical allowance or capital sum, or both, and directs the court to make such order, if any, as it thinks fit. It therefore affords a virtually unlimited discretion to individual judges, who may take widely differing views. This had led to criticisms of inconsistency and unpredictability. These disadvantages more than outweigh the advantages of flexibility and the Government endorse the conclusion that more specific guidance should be given to the courts, the legal profession and the public on the purposes of financial provision on divorce, and on the principles to be applied and the factors to be taken into account by the courts in deciding on these matters. Another criticism of the present law was that the courts had no power to transfer property, in particular the matrimonial home, from the owner to the other party.

Clause 9, therefore, sets out the five principles to be applied by the court in deciding what order for financial provision should be made. These are: fair share of matrimonial property; fair recognition of contributions and of economic advantages and disadvantages; fair sharing of the economic burden of child care, where there are children of the marriage under the age of 16; reasonable provision for adjustment to independence after divorce; and relief of serious financial hardship resulting from divorce. The factors to be taken into account in applying these principles are set out in Clause 10 in relation to the first principle and Clause 11 in relation to the others. It may be useful to consider these along with clauses dealing with orders for financial provision: notably Clauses 8 and 12 to 16. Clause 12 is the clause which enables a court, among other things, to make an order for transfer of property.

A just settlement may involve a capital payment or transfer of property, a continuing periodical payment or both. The commission regarded it as preferable, in so far as it was feasible and fair—and that is an important qualification—to achieve a clean break between the parties and to secure the independence of the parties rather than the indefinite continuation of an obligation of support. It is for this reason that Clause 13 provides that a court shall not make an order for periodical allowance unless it is satisfied that an order for payment of a capital sum or for transfer of property would be inappropriate or insufficient. There will clearly be circumstances where a clean break would be inappropriate: for example, where there is a need for continuing care for young children of the marriage or where one party has been substantially dependent on the financial support of the other and needs a period to readjust to the loss of that support.

It was this aspect of the commission's proposals that attracted the most widespread comment, since it was represented on the one hand that in future divorces this would be unfair on ex-wives who had given the best years of their lives to a marriage and on the other that, because the proposals were not retrospective and would apply only to future divorces, it would be unfair to present ex-husbands who would have to continue to support their ex-wives indefinitely.

In fact, the commission made a supplementary recommendation in relation to orders made under the present legislation, in the light of a Court of Session decision in 1983 to the effect that the court had no power at present to make an order for a periodical allowance for a fixed period other than one ending with the death or remarriage of the claimant. The commission considered that, on an application or a variation of an order for periodical allowance made under existing legislation, the court should have power where there is a change of circumstances to replace the existing order by an order for a fixed term. Provision is made for this in Clause 28(3). Any such variation would of course be made in accordance with the old principles and not the new ones. In my view, the Bill strikes a fair balance between the conflicting interests.

Clause 17 states that the provisions relating to financial provision on divorce shall apply in broadly the same way to actions for declarator of nullity of marriage. This is not competent under the present law.

Clauses 18 to 23 make various supplemental provisions in relation to actions for aliment and other consistorial actions, including claims for an order for financial provision.

The third group of proposals in Clauses 24 to 26 is intended to clarify and effect certain minor reforms of the existing law of Scotland on the property of married couples. Clauses 24 provides that in general marriage should not of itself affect the property rights or legal capacity of parties to the marriage. Clause 25 introduces the presumption that a married couple's household goods, whch do not include money and securities and certain other items, are owned by them both in equal shares (unless the contrary is proved), and Clause 26 makes a similar presumption in relation to any housekeeping allowance. In this area too the commission has taken a sensible approach which the Government are happy to endorse.

In short, the Bill is designed to modernise and to simplify the law of aliment, to provide a new framework to achieve fair and reasonable financial provision on divorce in accordance with clear statutory guidelines, and to clarify the law on the property of married couples. While there may be points of detail which require scrutiny at a later stage, the measures provide for a much needed and valuable reform in a difficult area of family law, which will be widely welcomed in Scotland. Therefore, I am glad to commend them to your Lordships. My Lords, I beg to move.

Moved, That the Bill be now read a second time.—(Lord Cameron of Lochbroom.)

5.35 p.m.

Lord McCluskey

My Lords, once again the House will be grateful to the noble and learned Lord the Lord Advocate for explaining this somewhat technical-looking Bill. As he explained, in virtually all particulars it implements the recommendations of two reports of the Scottish Law Commission. But it is not without importance, and I think it is to the entire credit of the Government in this respect, that the older report, No. 67, was published in 1981 and the younger one was published in 1984. So whatever one might say about the time it takes to enact law reform, the Government are to be congratulated on the speed with which they have brought forward these reforms. The cynical person might say—of course, I would not—that when the Government can think of nothing else to do, they bring forward measures of law reform, and that may explain the sudden rash of Bills of this kind at this time.

Apart from the recommendations of the Scottish Law Commission which are implemented, there is only one notable exception and that raises a quite important question of principle. It is the same question of principle that was seen in the somewhat passionate disputes that took place in the proceedings in this House last Session during the passage of the Matrimonial and Family Proceedings Bill, which gave rise to so much feeling, and I shall come to that in just a moment.

I should like to take the points of principle as they arise in the Bill, and I do not think that there are very many. First, let me take Clause 4, which I think raises a rather important matter which I should like the noble and learned Lord the Lord Advocate to consider at some stage before we reach the Committee or Report stages. In that particular clause the court is instructed to have regard to, among other things, what are called the needs and resources of the parties before it determines the amount of aliment. The clause goes on to say that the court shall have regard to the earning capacities of the parties". I am not quite sure why it refers to the earning capacities of the parties". Let me illustrate the difference by referring to the unhappy situation of the noble and learned Lord the Lord Advocate himself. He is a man with a very considerable earning capacity; it is much greater than the modest salary that he now receives by way of reward for his quite invaluable services to the Government. His earning capacity is much greater than his salary because he could earn a good deal more by returning to his lucrative private practice—indeed, I express the hope that the electors will soon get the chance to restore him to that happy position! But rather than look at his earning capacity, one ought to look at his resources. As one finds the needs and resources of the parties mentioned in Clause 4(1)(a), and as one finds the same test applied in Clause 8(2)(b), one wonders why the earning capacity of the parties has to be looked at separately from the resources. No doubt there is a perfectly good explanation for that, and we shall hear it shortly from the noble and learned Lord the Lord Advocate when he comes to reply.

One other difficulty that I find in the first part of the Bill is contained in Clause 7, because that clause provides that, where parties have reached an agreement which restricts the future liability for aliment, that agreement is to have no effect if subsequently it is not seen that the provision was fair and reasonable in all the circumstances at the time when the agreement was entered into. That really means that parties reach an agreement and perhaps many years later the court has to look to see whether the agreement was reasonable at the time. That seems to me to be a very difficult task for the court to undertake and is liable to lead to a good deal of bitterness, a good many speculative actions, as it were, and indeed to far too much litigation. I wonder whether that is a wholly desirable principle to introduce.

The noble and learned Lord the Lord Advocate referred to Clause 9, and I entirely agree with him that the present state of the law is very unsatisfactory. I think he said that the present law, which I think dates from 1964, affords no guidance to the courts as to what amounts they should award by way of periodical allowance, by way of aliment or alimony. They have an unlimited discretion. As the noble and learned Lord said, that has given rise to the problem of different judges awarding quite different sums in apparently similar circumstances, and accordingly it makes it very difficult indeed for lawyers to advise their clients as to what the courts will do.

The situation has now become very much worse because now that divorce has gone to the sheriff courts it is not that the sheriffs are any less able to do the job than the judges of the Court of Session in this regard, but because there are so many more of them in different parts of the country, the likelihood of different results in different parts of the country is that much the greater, and accordingly something has to be done.

What has been done is that in Clause 9 and other clauses an attempt has been made to change the situation slightly. The old rule was that the judge's discretion was as long as a piece of string. What this clause does is to set forth a number of principles, but when your Lordships come to look at them it will be seen that each principle is itself absolutely indefinite. For example, the first one says: the net value of the matrimonial property should be shared fairly between the parties to the marriage". Now how fair is fair? The next one refers to fairness, and the next also refers to fairness, and the next two to reasonableness. If you take one piece of string of indeterminate length and replace it by five pieces of string each of indeterminate length, I do not know whether you advance the position. On the other hand, I recognise that the difficulties are perhaps insoluble, and the Scottish Law Commission thought that this approach would take us further. I sincerely hope it will, but I must confess that I have some doubts.

On the important point of principle the Lord Advocate spoke of wives who have given the best years of their lives to their marriage. I must confess that this is news to me, only in the sense that I was always brought up to believe that one's schooldays were the best years of one's life; but perhaps it is a question of gender.

On the serious point, however, would your Lordships look at Clause 13(3) which is the important subsection here. That is the one which provides: An order … for a periodical allowance may be for a definite or an indefinite period or until the happening of a specified event. What the Scottish law Commission sought to do was to keep the period during which a periodical allowance would be paid down to a period of three years. That was to be the standard period, or the maximum period, except, in cases of grave financial hardship". For reasons that are not at all clear to me the Government have taken out the three years from Clause 13(3) but have kept them in Clause 9(1)(d) and have abandoned the standard of "grave financial hardship" and substituted the standard of "serious financial hardship". I do not know the difference between gravity and seriousness in this context, but I have no doubt that the Lord Advocate will be able to enlighten us in due course. Are these simply drafting changes, or does it actually mean something different to say "serious financial hardship" rather than "grave financial hardship"?

I think that the Scottish Law Commission justified their epithet in the report by referring to an Act of 1976. In other words, the court has some familiarity with dealing with the concept of gravity in relation to financial hardship, and I wonder why the Government have abandoned that particular approach.

There is one other matter which your Lordships might find of interest, and it is quite important when one considers the possible powers of the court. Clause 14 gives the court power to make "an incidental order", as it is called, and an incidental order is one under which the property of either spouse, or both spouses, may be sold, or valued, and all kinds of other things can be done in relation to the property, the furniture, et cetera. I wonder whether it is really necessary to have such extremely wide powers which justify almost any interference with property rights of the parties to a marriage?

These are basically some matters of principle at the start and latterly matters of some detail. I hope to come back to them at Committee. However, I would extend to this Bill in particular a general welcome, and again of course I congratulate not just the Government on their promptness in dealing with these matters, but the Scottish Law Commission on the lucidity and not least the brevity of these reports.

Lord Wilson of Langside

My Lords, from these Benches we accord a virtually unqualified welcome to this measure. It effects reforms of the law which are desirable, and fills gaps in the law which is also necessary as well as desirable. In this field it is difficult to achieve perfection. One seldom does. Every reform produces its own particular problems. No doubt at Committee we shall be discussing many of the points of detail which will arise, but in general the Bill is wholly welcome. The reports from which it proceeds are admirable and the Scottish Law Commission is to be congratulated, and the Lord Advocate also for the clarity and ability of his presentation of the Bill to the House.

5.46 p.m.

Lord Cameron of Lochbroom

My Lords, I am grateful to the noble and learned Lords opposite for their welcome of this Bill. May I briefly attempt to make some response to the points which the noble and learned Lord, Lord McCluskey, raised. He first asked, as he put it, what would be my position at some future date which the noble and learned Lord opposite looked forward to but on which obviously I have different views. I think that the matter is dealt with in the Scottish Law Commission's report where they pointed out that while a person's actual earnings can be included within his resources, earning capacity is something which might be of some importance in certain cases and might not be regarded as falling within that head. These would be matters which would depend on various factors, but it was felt by the Law Commission—and it is a view with which the Government entirely agree—that earning capacity should be included as a specific factor in the Bill, but of course the assessment of it would be left to the court to deal with.

On the point raised on Clause 7 I would simply say that the clause is drawn from the Law Commission's draft Bill. The reasons for the terms of the clause are again to be found within that clause, and likewise so far as Clause 9 is concerned. In fairness I should try to make clear the point raised in regard to Clause 13. I wish to make it clear that it is intended that recommendation 35 in the Scottish Law Commission report should be implemented, and this is the manner in which it is sought to do so in this Bill. The maximum period of three years is regarded as sufficient to provide for any necessary adjustment to independence after divorce. The period is to run from the date of the decree of divorce even where the award is made after a decree of divorce. That might at least to some extent still the apprehensions expressed by the noble and learned Lord opposite.

The point was also raised about the use of the word "grave" as opposed to "serious". This is perhaps more than simply a drafting amendment. This is intended to make it clear that the Government consider that the term "grave financial hardship" was really too restrictive precisely because of its context in the Divorce (Scotland) Act 1976. Accordingly, the term"serious financial hardship" is introduced to make clear that a less rigid criterion is being introduced. So far as Clause 14 and incidental orders are concerned, there again the answer is to be found within the Law Commission's report and that has been adopted in full by the Government.

Finally, I would again simply express my thanks and those of your Lordships' House to the Scottish Law Commission for the work which I am happy to think has led so quickly to the introduction of Bills to bring this necessary reform of law in Scotland in train.

On Question, Bill read a second time, and committed to a Committee of the Whole House.