Is legal protection for cohabitants finally on the way?

A number of developments in 2016 may bring cohabitants protection and equality at last

Many individuals and organisations, including Resolution, have been campaigning for legal protection for cohabiting couples for several years and it seems that we are still waiting for the law in this area to change to reflect modern society.

The Office for National Statistics confirmed that there were just under 3.2 million cohabiting couples in the UK in 2015. It is clear that more and more couples are choosing to cohabit rather than getting married and it is therefore of vital importance that these couples have the necessary legal protection upon separation and upon death of one of the partners.

Unfortunately there is still a misconception among the public that the so-called “common law marriage” exists. According to a survey commissioned by OnePlusOne and conducted by Opinium Research, almost half of UK citizens aged 18 to 34 believe that cohabiting couples have the same legal rights as married couples.

Currently the law does not recognise cohabitants and they have very limited protection on separation and on death, despite many being in long-term relationships and/or having children together. However, more protection is available where children are involved.

When a cohabiting couple separate, the parties’ needs are not considered and the non-financial contributions (such as looking after the home and raising a family) are not given any weight against the financial contributions. This lack of legal protection often results in an unfair outcome.

There is also no protection on death and if one partner dies, the other will not automatically have a right to their deceased partner’s estate under the intestacy rules. There is also no inheritance tax exemption as there is for spouses.

Cohabiting couples can enter into a cohabitation agreement setting out the ownership of assets, dealing with financial arrangements during cohabitation and stating how the finances will be dealt with upon separation. However, many cohabiting couples are unaware of this and/or are unable to afford the legal fees to put it in place.

Cohabitants can also jointly own property and enter into a declaration of trust setting out their respective shares in the property, but on separation their circumstances will not be considered in the same way as spouses.

What remedies are currently available for former cohabitants?

Cohabitants upon separation can apply under section 14 of the Trusts of Land and Appointment of Trustees Act 1996 (Tolata), for the court to determine whether or not a party has an interest in a property, the extent of such interest, and make an order dealing with the way in which that interest is to be realised by ordering a sale of the property.

Often the property will not be in joint names but in the sole name of one partner and it can be very difficult for the non-owner to prove that a resulting or constructive trust has been established or that proprietary estoppel applies.

In relation to jointly owned property, the recent case of Barnes v Phillips [2015] EWCA Civ 1056, [2015] All ER (D) 206 (Oct) confirmed that there is a wide scope for imputing a common intention to vary the beneficial shares in the property and that child maintenance payments (or lack thereof) will also be a consideration in determining the parties’ beneficial shares in the property.

A former cohabitant can also apply to the court under Schedule 1 to the Children Act 1989 for provision in respect of a child or children of the relationship in the form of periodical payments, lump sums, or a transfer or settlement of property order. However, there is no provision for maintenance for former cohabitants.

An attempt was made by Lord Marks to alleviate this problem with the introduction of the Cohabitation Rights Bill, which would offer more legal protection to cohabiting couples.

The bill had its first reading in the House of Lords on 4th June 2015 and the second reading is yet to be scheduled.

What legal protection does the bill offer?

Under the bill, where former cohabitants do not have children together, they must have lived together as a couple for a continuous period of at least three years in order to be eligible for legal protection. If they meet the eligibility criteria, they are able to apply to the court for a financial settlement order.

A financial settlement order may be granted by the court where the parties are no longer living together as a couple and where either the respondent has retained a financial benefit or the applicant has an economic disadvantage taking into account the applicant’s qualifying contributions (being both financial and non-financial). The court must then consider the discretionary factors (similar to the factors set out in section 25 of the Matrimonial Causes Act 1973) and determine that it is just and equitable to make an order.

The court can make various orders, including for a lump sum payment, transfer/sale of property and a pension sharing order.

The provisions will not apply where there is an opt-out agreement in place. However, the opt-out agreements, as well as cohabitation agreements or deeds of trust already in place, can in certain circumstances be varied or revoked by the court.

The bill also provides cohabitants with an insurable interest in each other’s lives and enables a surviving cohabitant to make claims on the death of the other cohabitant.

Many argue that same-sex cohabitants already have legal protection (almost identical to that of married couples) without having to get married as they are able to enter into a civil partnership. The same is not available to opposite-sex couples. It is important to note that according to the Office for National Statistics figures for 2015, there were 3.1 million opposite-sex cohabiting couples and 90,000 same-sex cohabiting couples.

The campaign for equal civil partnerships

Civil partnerships offer an alternative to marriage and still provide couples with the same legal protection as married couples.

Civil partnerships are viewed by couples as a way of making a commitment to each other without entering into a marriage and dealing with the social and cultural expectations, traditions and pressures associated with marriage.

Since the introduction of the Marriage (Same-Sex Couples) Act 2013, same-sex cohabiting couples have a choice of either marrying or entering into a civil partnership. Opposite-sex couples are denied this choice.

One couple decided to take legal action to challenge this. Charles Keidan and Rebecca Steinfeld, an unmarried opposite-sex couple, took their legal battle for equal civil partnerships to the court in R (Steinfeld and Keidan) v Secretary of State for Education (2015, unreported).

In October 2014 Mr Keidan and Miss Steinfeld attended Chelsea Old Town Hall registry office in an attempt to register their intention to enter into a civil partnership. They were unsuccessful on the basis that they were not a same-sex couple.

They decided to make an application for permission to apply for judicial review on the ground that the Civil Partnership Act 2004 is incompatible with Article 14 (read with Article 8) of the European Convention on Human Rights. Permission was granted in February 2015 but unfortunately their claim failed following the hearing on 19 and 20 January 2016.

In support for equal civil partnerships, on 21 October 2015 Tim Loughton MP presented the House of Commons with a bill to amend the Civil Partnership Act 2004 to include opposite-sex couples. This was the third time that the bill had been presented to the House of Commons. It was not opposed and a second reading was scheduled to take place on 29 January 2016 but will now take place on 11 March 2016.

Other countries such as France, Netherlands, Portugal, South Africa and New Zealand allow same-sex and opposite-sex civil partnerships and it will be interesting to see whether England & Wales follows suit.

The future for cohabitants

It is clear that this area of law requires reform to ensure that all families are protected and treated fairly. The coming months will determine the future of the bill to amend the Civil Partnership Act 2004 and the future of the Cohabitation Rights Bill. Reform may still be a long way away but we are definitely closer than ever before.

This is an updated version of the article published in the January/February 2016 issue of The Review, a publication by Resolution.

If you would like to discuss any aspect of family law, are considering divorce proceedings or a trial separation, or want to draw up a pre or post-nuptial agreement, call us in absolute confidence on 03456 381381. Alternatively, email us at familylaw@ibblaw.co.uk.