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No-fault divorce

On 25 June 2020, The Divorce, Dissolution and Separation Bill received Royal assent and became an Act of Parliament. The new law, which is expected to come into effect in Autumn 2021, will promote “no-fault divorce” by removing the requirement to assign blame in divorce petitions (please read more about this here: Divorcing on the basis of unreasonable behaviour). After years of campaigning, the change is monumental and a step in the right direction for family law practitioners.

The changes to filing for a divorce petition will be as follows:

  1. The requirement to establish one of the five facts for divorce will be dispensed with. Instead, one party, or indeed the couple, can make a statement of irretrievable breakdown of the marriage;
  2. It will no longer be possible for one party to dispute the divorce (unless their objection is based on legal validity, jurisdiction, fraud, coercion or procedure) because a statement of irretrievable breakdown will be sufficient in demonstrating that the marriage has irretrievably broken down;
  3. Couples will be able to make a joint application for divorce;
  4. A new minimum time period of 20 weeks from the date of the petition to the date of the Conditional Divorce Order (previously known as Decree Nisi) will be introduced. There will then be a further 6 weeks before individuals can apply for a Final Divorce Order (previously Decree Absolute). This change allows couples to have more time to agree on financial and practical arrangements.

Should you wait until the new laws are introduced before you file for divorce?

Whilst it is hoped that no-fault divorces will come into place in Autumn 2021, this is not guaranteed. In any event, it may not be possible or realistic for some people to wait that long to file for divorce and, for many, ending the marriage in legal terms helps them to move on and rebuild their lives. Seeking the advice of a solicitor can be helpful in terms of weighing up the pros and cons of each option and discussing the best course of action which is, of course, dependant on the circumstances of the case.

Applying for a divorce

At Freedman Green Dhokia, we understand that much of the law relating to divorce is outdated and so we welcome any change which is in line with the modern world we live in today.

Our lawyers are committed in advising couples throughout the divorce process in a sensitive and time and cost-efficient manner.

If you would like to discuss any of the issues raised in this article, or need advice about a divorce or civil partnership dissolution, please do not hesitate to contact our Family Department on 0207 625 6003 or Priya Dhokia by email at p.dhokia@fgdlaw.co.uk.

Divorcing on the basis of unreasonable behaviour

The current law

As it stands currently, there is only one ground for divorce in England and Wales, which is the “irretrievable breakdown of the marriage”. The party who is filing for divorce (the Petitioner) needs to state on what basis the marriage has broken down, by citing one of the following five facts:

  1. Adultery
  2. Unreasonable behaviour
  3. Desertion
  4. Two years’ separation with the other party’s consent
  5. Five years’ separation (no consent required)

Unless the petitioning party is able to rely upon adultery, desertion or separation, they will need to demonstrate that the other party is to blame for the breakdown of the marriage, on the basis that their behaviour has been unreasonable. It can sometimes be difficult to find examples of unreasonable behaviour on an objective basis, as the question of what constitutes “unreasonable” can be subjective. This is why the petitioning party must explain what effect the behaviour has had on them personally (whether that be psychologically, emotionally or physically), rather than simply listing the unreasonable behaviour. The current law presents a further hindrance to the petitioner insofar as a petition must be presented within six months from the date of the last incident of unreasonable behaviour.

This issue surrounding a petitioner struggling to demonstrate unreasonable behaviour is highlighted in the case of Owens v Owens. Mrs Owens cited Mr Owens’ unreasonable behaviour as the reason for the breakdown of their marriage and Mr Owens contested the application. The Judge at first instance held that Mrs Owens had exaggerated the seriousness of her allegations against her husband and found that there was no unreasonable behaviour that Mrs Owens could rely upon. Mrs Owens appealed the decision and the matter was subsequently put before the Court of Appeal. Unfortunately for Mrs Owens, the Court of Appeal agreed with the Judge at first instant. After Mrs Owens appealed the decision for a second time, the matter was heard at the Supreme Court where the Judges took the view that it is their role to apply the facts to the law laid down by Parliament, and, in the circumstances, they were not satisfied that that Mr Owen’s behaviour met the threshold for unreasonable behaviour. Notwithstanding the Judges’ decision, the Supreme Court acknowledged that the current law had not been adapted to reflect modern day relationships.

Historically, family law practitioners have argued that the blame-based system is both outdated and unsatisfactory as it can lead to animosity between the parties which, in turn, can be detrimental when negotiating financial settlements and children arrangements. Even in situations where both spouses agree that the marriage has come to an end, through no fault of either party, one party will need to be held accountable for the divorce petition to proceed.

If you would like advice on this matter, please do not hesitate to contact Priya Dhokia of our Family Department on 0207 604 2985 or email him at p.dhokia@fgdlaw.co.uk.

 

Reforms to Leasehold  Enfranchisement – the tide is changing

A leasehold interest is considered a “wasting asset”: its value will almost always reduce over time and will eventually revert to the landlord. Until now, an individual’s right to a lease of their flat, has been governed in the main by the Leasehold Reform Housing and Urban Development  Act 1993. A leaseholder has been compelled over the passing of time to request a longer lease in order to increase/preserve value in the flat. The 1993 Act offers  a term equal to the unexpired term of the existing lease plus a further 90 years, at a premium to be determined usually between the landlords and tenants valuers based on both negotiation and valuation principles prescribed by law, and  at a peppercorn (nil) rent, otherwise on the same terms as the existing lease subject to certain exceptions.

But with the advent of the long-awaited Law Commission Report issued last year, all this was set to change. The impetus behind the reform was the sense that the current system was “unfair”, “uncertain”, “too expensive” and “complicated”. It is made all the more significant when one considers that it is estimated that “there are over 4.2 million leasehold properties in England alone, comprising 18% of all housing stock. Indeed,  other estimates, suggest that there are far more leasehold owners than these statistics suggest.

Earlier in the year, housing minister  Robert Jenrick’s  made an announcement bringing the reforms back into sharp focus. In the wake of this  many leaseholders and landlords alike will have been left wondering how to respond to or deal  with their leasehold assets, whether on the landlord or tenant side of the coin.

Leaseholders may think they should hold off extending their lease until the law reform comes into before parliament and gets enacted in legislation. The important point to note however is that not only is the precise timescale for the proposed reforms uncertain, the reforms are also likely not going to affect all leaseholders equally, and therefore a “one size fits all” approach is not appropriate.

The proposals for all residential units are as summarised as follows:

  • Abolish the two year ownership rule, allowing any leaseholder to apply for a lease extension, instead of waiting until they have owned their property for two years when the premium will have likely increased.
  • 990 year extension. The landlord will retain the ability to take back the property on the grounds of re-development in the last 5 years of every 90 year period, subject to certain requirements.
  • New right for leaseholders with very long leases or onerous ground rents to buy out their ground rent or long leases separately rather than having to do both.
  • Marriage value, currently payable on leases less than 80 years, which assumes that the value of one party holding both the leasehold and freehold interest is greater than when those interests are held by separate parties, is likely going to be removed from the premium calculation although this is not yet 100% certain.

Broadly speaking, this places  leaseholders into three following camps:

  1. Leaseholders who may not necessarily be impacted in a huge way by the reform and may consider carrying on as normal for the time being in making new claims and progressing with existing ones;
  2. Leaseholders who see some clear benefit in holding off for a while at least until things become clearer with regard to this new regime that’s being proposed;
  3. Leaseholders who fall in between camps 1 and 2

Which camp any given leaseholders fall into varies depending on the precise length of lease, value of property, level of ground rent and personal circumstances. For example, if you have a  lease of over 80 years and ground rents are not massively onerous, there may not in fact be a huge material benefit save for fees savings, when considering the fact that the premium is getting greater over time it will take to get the reforms through. Equally, in a lease under 30 years the reversionary value has the most impact in determining the premium due and therefore it is unlikely that the abolition of marriage value will have a huge impact when balanced against the rate of ever increasing reversionary value over the effluxion of time.

What is safe to say is that a leaseholder can only really determine whether or not it is worth extending now or later by engaging specialist valuation advice and legal advice.

If you are a freeholder or leaseholder and would like advise on this issue and the potential impact on you please do not hesitate to contact Gary Green of our Property Department on 020 7625 6003 or email her at g.green@fgdlaw.co.uk

Family Law Series Part 3: How does the length of your marriage impact the financial split on divorce?

As examined in Part 1 of this Series, one of the factors the Court must have regard to when exercising its powers to make Financial Orders on Divorce, is the “duration of the marriage”.  In cases where the marriage has been extremely short, the Court may order no financial provision at all: whereas, after a lengthy marriage the starting position will be to divide everything equally.

This is an approach that most people would agree with, but inevitably it is not always that simple.  You might assume that a marriage lasting just a few years would be treated as a short marriage, but that may not necessarily be the case if the parties have lived together before ‘tying the knot’.

In the case of GW v RW (2003) EWHC 611 (Fam) the Judge stated:

“I cannot imagine anyone nowadays seriously stigmatising pre-marital cohabitation as “living in sin” or lacking the quality of emotional commitment assumed in marriage.  Plus, in my judgment where a relationship moves seamlessly from cohabitation into marriage without any major alteration in the way the couple live, it is unreal and artificial to treat the periods differently.  On the other hand, if it is found that the pre-marital cohabitation was on the basis of a trial period to see if there is any basis for later marriage then I would be of the view that it would not be right to be included as part of the “duration of marriage”.”

A marriage lasting just a few years that is preceded by 10 years of seamless cohabitation would therefore be treated as a long marriage.  This can have a significant impact on the financial orders made, as not only will a Court start from a position of equality between the parties, but the property and wealth accrued during the 10 years of cohabitation will also be treated as forming part of the marital pot to be shared between them.

The duration of the marriage is just one of many factors to which the Court must have regard.  The Court is also required to give first consideration to the needs of any child(ren) of the marriage and also to take into account all the circumstances of the case.  Therefore, in most cases, the duration of the marriage is unlikely to be a determinative factor in the Court’s decision-making process, particularly if there are insufficient assets to meet the parties’ needs.

If you would like advice on this newsletter or family issues generally, please do not hesitate to contact Priya Dhokia of our Family Department on 020 7625 6003 or email him at p.dhokia@fgdlaw.co.uk

Family Law Series Part 2: How does the Court treat the standard of living enjoyed during the marriage, on divorce?

As examined in Part 1 of this Series, one of the factors that the Court takes into account when making Financial Orders is the standard of living enjoyed by the family before the breakdown of the marriage.  This factor was explored in the recent case of AF v SF [2019] EWHC 1224 (Fam).  In this case the parties started cohabiting in 2002, married in 2004 and separated in 2017.  They had two children together aged 14 years and 12 years.

The wife gave up a good career to care for the parties’ children.  The wife petitioned for divorce and made an application for financial remedies.

The family wealth was derived very substantially from the husband’s family.  It was held in a trust structure of which the husband and other family members were life tenants.  His notional share was £106 million.  The trust fund generated a very significant income for the husband, likely to be £1.19 million per annum over the next 5 years.

The parties had accordingly enjoyed a high standard of living during the marriage.  The husband had £5.5 million of non-trust assets, some of which were needed for legal costs.  The wife had funds of £215,513 and a small pension.

The wife asserted her needs at the rate of almost £19 million, with an annual budget of £352,992.  The husband offered £2.88 million.

The Court awarded the wife £7 million, including the former matrimonial home and a lump sum of £4.25 million, of which £1.75 million was to come from the funds frozen in the husband’s accounts and the remainder to be paid over 5 years with the wife to receive additional reducing maintenance over that period.  The wife’s reasonable income needs were assessed to be £175,000 per annum, rather than £352,992.

The Court concurred that the standard of living during the marriage is a relevant consideration, but it is not a lodestar.  It was noted in this case that there needed to be consideration given to whether the standard of living was excessive, particularly if there was overspending.  It was also noted in this case that the parties cannot expect to live at the same standard completely as during the marriage but that of what is reasonable.

If you would like advice on this newsletter or family issues generally, please do not hesitate to contact Panay Vassiliou of our Family Department on 020 7625 6003 or email him at p.vassiliou@fgdlaw.co.uk

Coronavirus: No jab, No job?

There has been considerable debate about whether or not employers can force their employees to take the COVID-19 vaccine. Pimlico Plumbers recently announced that they intend to modify their employment contracts to include a requirement that all new hires must be vaccinated against COVID-19.

The debate raises important legal questions that employers and lawyers will have to get to grips with over the coming months – can employers force employees to take the vaccine? in other words is it a case of no jab, no job?

Looking at it from a commercial point of view, Pimlico Plumbers say that the policy would go a long way to protect their customers and that when offered the choice, customers would rather have someone who has been vaccinated, enter their homes, than someone who has not been vaccinated. Consequently, having vaccinated employees could promote customer confidence and give the company an edge over its competitors.

From an employer’s perspective, they say that they have a duty of care towards safeguarding their employees and that the introduction of this new policy would merely fulfil their legal obligation during the global pandemic.

However it is not as simple as this. Although legally, there is nothing to prevent employers from inserting a ‘no jab, no job’ clause in employment contracts, for new hires, employers cannot currently force existing employees to take the vaccine. So the introduction of this new policy could carry great risk for employers.

Ultimately employees are entitled to refuse the vaccine for all sorts of reasons, which for example include religion or belief, pregnancy, disability or other medical grounds. Employees may be able to bring legal claims where such rights are denied.

Pimlico Plumbers have said that in relation to existing employees, they are not putting anyone under pressure, to have the vaccine and that most of their employees approve the policy. The firm has even offered to pay for private vaccinations (when available) and travel costs, in order to safeguard their employees and have said that this would be done during the firm’s own time, an approach which has been welcomed by existing employees.

Whilst businesses appear to be seeking ‘no jab, no job’ contracts, the safest option for employers, at the moment, is to promote the vaccine roll-out and incentivise employees to take it, rather than forcing or pressurising them to take it.

If you have any queries about this issue or other employment matters, please contact Raj Dhokia in our Employment Department by telephone 020 7625 6003 or by email r.dhokia@fgdlaw.co.uk

Family Law Series Part 1: What factors does the Court take into account when making Financial Orders upon Divorce?

Clients regularly will ask and seek advice as to how the assets of the parties’ marriage will be divided.  When deciding what Orders to make, the Court has a very wide discretion. Whilst the starting point is an equal division of the assets, the courts can depart from equality, by taking into account a number of factors.  By Section 25 of the Matrimonial Causes Act 1973, all the circumstances of the particular case must be taken into account and first consideration must be given to the welfare of any minor child of the family who has not attained the age of 18 years.

Section 25 directs the Court to have regards to the following matters:

  • 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 (including any benefits under a pension scheme which a party to the marriage has or is likely to have), including in the case of earning capacity, any increase in that capacity which it would, in the opinion of the Court be reasonable to expect a party to a marriage to take steps to acquire;
  • The financial needs, obligation and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
  • The standard of living enjoyed by the family before the breakdown of the marriage;
  • The age of each party to the marriage and the duration of the marriage;
  • Any physical or mental disability of either of the parties to the marriage;
  • The contributions which each of the parties has made or is likely in the foreseeable future to make, to the welfare of the family including any contribution by looking after the home or caring for the family;
  • 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.
  • In the case of proceedings for divorce or nullity of marriage, the value to each of the parties to the marriage of any benefit (for example, a pension) which, by reason of a dissolution or annulment of the marriage, that party will lose the chance of acquiring.

Therefore, as can be seen there are many factors that the Court needs to consider, and each case will need to be assessed having considered the parties financial resources in order to advise clients.

If you would like advice on this newsletter or family issues generally, please do not hesitate to contact Priya Dhokia in our Family Department on 020 7625 6003 or email him at p.dhokia@fgdlaw.co.uk

Government introduces a Stamp Duty Holiday

The Government have today announced that there will be a temporary change in stamp duty rules.

This change will see the nil rate band increased from £125,000 to £500,000. This now means that property purchases of up to £500,000 will be exempt of stamp duty until further notice.

As first time buyers were previously entitled to tax relief of 0% on purchases up to £300,000 in any event, they will only really benefit when buying properties between £300,000 and £500,000.

We suspect that the stamp duty holiday will only be in place for a limited period. Watch this space for further updates.

Should you wish to discuss this matter further, please contact our Property Department on 020 7625 6003 or Gary Green by email at g.green@fgdlaw.co.uk

 

COVID-19 – KEY WORKERS

In line with government guidelines regarding COVID-19 Freedman Green Dhokia are mindful of protecting the health and safety of their employees, clients and partners. Our lawyers are however available electronically and on the phone to continue working on existing cases and to provide the advice you require. They can be contacted on the office number – 020 7625 6003 – or by email at info@fgdlaw.co.uk.

Solicitors acting in connection with the execution of Wills and in the administration of justice (e.g. Court and Tribunal hearings ) are deemed ‘key workers’.

During these difficult times instructions for your Wills can be taken via email to facilitate the process. When clients have approved their draft Wills the engrossed Wills will be sent to them with directions for signing. The firm may have up-to-date ID for existing clients, but for new clients we would at this time accept scanned copies of their ID .

Do not hesitate to contact Iain Monaghan to do or amend your Will by telephone 020 7625 6003 or by email: i.monaghan@fgdlaw.co.uk

Thank you for your support and understanding in these unprecedented times. We are keen to continue providing you with the exceptional level of service we are renown for and hope you and your families will keep safe and well.