Scotland prefers fair shares, England goes on need, says Rhona Adams
IT IS interesting to reflect, in this year of the independence referendum, on how differently we already do certain things from the English. Some aspects of our law are UK-wide. My colleagues who specialise in the field of employment law, for example, do essentially the same job as their counterparts in English firms. They apply the same legislation and tribunal procedures. They could sit in an office in Slough and basically do the same job.
Other aspects of Scots and English law are, by contrast, hugely at variance. One such example is the law determining the thorny issue of financial provision on divorce. Scots and English family lawyers comparing notes are often aghast to learn just how differently things are done on the other side of the Border.
A student wishing to understand the approach of Scots law to the matter of financial settlement on divorce, need look little further than the Family Law (Scotland) Act 1985. This pioneering piece of legislation set out a prescriptive and comprehensive formula for dealing with financial settlement on divorce. At the heart of the Act is the principle of fair sharing. The structure it prescribes is comprehensive and simple: identify the date of separation; work out what is in “the pot”; decide how it ought to be divided. Inherited assets or items owned by one or other spouse before the marriage are very clearly ring-fenced from the exercise (as long as they have been held separately throughout). Assets built up after the date of separation are also excluded from consideration. In a majority of cases, a 50-50 split will be appropriate. The financial needs of the parties and their children going forward are taken into account, but are not the headline in the list of considerations.
When it comes to spousal maintenance, our system is not noted for its generosity. The Act sets out the criteria for spousal maintenance after divorce and, in the majority of cases, restricts this to a maximum of three years to enable the financially dependent spouse to adapt. Spousal maintenance over a longer period remains relatively uncommon.
What all this means is that in many cases, divorce settlements in Scotland are relatively “cut and dried”. There is of course room for argument about how the statutory principles should be applied (otherwise there would be no litigation). Outcomes have a tendency to be reasonably predictable, however.
Contrast this with the position south of the Border. There is statutory guidance available in England and Wales in the form of Section 25 of the Matrimonial Causes Act 1973. This sets out the matters a court must consider in deciding what orders to make. There is undoubtedly far wider judicial discretion. Top of the list in England is “needs” (those of the parties and their children) and this principle trumps sharing. Outcomes are generally harder to predict.
It’s also quite possible to be divorced in England but to not then address the matter of financial settlement until years later. The discussion will then be opened on the basis of a current balance sheet which may bear little relation to the financial position of the parties at the time they separated. There is a distinction made as between assets of the marriage and fruits of a post-separation venture but again not with the clarity of the Scottish system.
Perhaps the most startlingly different aspect is the approach to post-divorce spousal maintenance. After a long marriage in England, it is not uncommon to see “joint lives” orders being made, where the spouse with the greater earning capacity requires to pay to the other maintenance for as long as they are both alive.
So, which system is best? There are of course pros and cons. The Scots will say that the English system is outdated and rather paternalistic. They will also say that the discretionary nature of the system makes it nigh-on impossible to give clear advice to clients. The counter to that is that in Scotland we have sacrificed fairness for predictability, and that adopts too formulaic an approach. What is clear is that the debate will doubtless continue long after the referendum outcome is known! • Rhona Adams is a partner, family law, with Morton Fraser www.morton-fraser.com