In Scotland, while the law that governs what spouses are entitled to on separation is well established and, in most part, relatively clear and easy to understand, the same can’t be said for the law relating to cohabiting couples. Many couples who are cohabitants understandably make assumptions about their rights and entitlements, believing these will be the same as those who are married, or that their former cohabitant has no rights or claims against them at all. Neither is true.
Without a formal agreement, they are often in for a shock when they discover where they actually stand in legal terms. Simply, cohabitants’ who separate have some rights and financial claims potentially available to them and most people in a committed relationship or living together for more than a brief period will be considered cohabitants for the purpose of making a claim.
However, these rights and claims do not extend anywhere near those afforded to people who are married. Currently, the law allows a cohabitant a claim to a share in certain money and property and to claim a capital sum for compensation for “economic disadvantage” suffered and/or to reflect the additional financial burden of caring for a child. But there is no right to maintenance for the cohabitant. All claims have to be made through the courts and within a strict time limit of 12 months.
The current law has been criticised for a lack of clarity and guidance, ultimately leading to uncertain results and expensive legal disputes. The Scottish Law Commission has now made recommendations for change following a consultation with the public and lawyers. A draft Bill has been put before the Scottish Parliament for consideration and, if enacted into law, the reforms will modernise and improve the statutory scheme for separating couples.
This will include re-defining who is treated as a cohabitant as well as clarifying the test for deciding claims for financial awards and extending the available remedies, to an extent. The proposed reforms also explicitly respect the autonomy of couples to make their own financial arrangements.
These are welcome proposals for change, but the need to have a cohabitation agreement has not changed if you wish to save yourself a great deal of stress and cost. It is not uncommon, for example, for individuals to make different financial contributions towards a house purchased in joint names, or for one person to financially contribute toward property owned by their partner. A simple agreement can provide that you are reimbursed in respect of those contributions as you wish, although they may be more complex and cover a wider range of financial considerations.
The law can be complicated when it comes to cohabitation, so if you’re unsure of your situation or your rights and entitlements, the best advice is to get some advice. After all, it’s better to have safeguards in place and not need them, than to need them and not have them.
Leonie Burke is a partner at Aberdein Considine