Last week, the Commons Library published a briefing paper on Co-habitation and the “Common Law Marriage”.  The paper provides general information about the number of co-habiting couples in England and Wales.  It is a useful reminder of how the law applies to co-habiting couples and it also addresses the Law Commissions proposals for reform.  You can read the full report here:

Briefing Paper – “Common Law Marriage”

What Does the Report tell us about the statistics?

The Office of National Statistics has reported a general rise in co-habiting couples, since it started publishing annual data on the composition of families in 1996.  This is hardly surprising, particularly as co-habitation has become more widely accepted amongst society in the past few years.

No legal status for the “Common Law Marriage”

Many people incorrectly assume that they acquire legal status and therefore legal rights, by virtue of living with their partner, often referring to their relationship as a “common law marriage”.  Contrary to popular belief, there is no such thing as a “common law marriage”, regardless of how long the co-habitees have been living together or whether there are children involved.  The legal rights available to co-habitees are invariably limited in comparison to those who are married or in civil partnership.  For a start, there is no single piece of legislation which governs the rights of co-habitees on separation.  Instead, we have to look to different areas of law to help deal with each issue that may arise on separation or death.  Typically these are:  property rights; children; inheritance; pensions and taxation.

A summary of the key areas of dispute on separation

Property Disputes

On separation, the courts do not have the power to override the legal ownership of property and divide it in the same way that they might do on divorce or dissolution of a civil partnership.

The outcome of a property dispute will therefore largely depend upon how the property is legally owned.  If the property is owned in joint names, the starting point is an equal division of the equity, but one party can try to establish that they have a greater share than the other party.

If the property is owned in the sole name of one party (as is often the case for co-habitees) the other party has to establish that they have a beneficial interest in the value of the property (equity).

Building a case to establish either claim can be tricky and it will depend upon the individual facts of the case. But mainly a beneficial interest or greater share in the property can be evidenced by direct contributions or a significant financial contribution to the property. It is important to know that the intentions of the parties can also be a relevant factor in deciding the proportions of the property owned by each party, but again this will be fact specific.

If you are thinking about purchasing a home with your partner or perhaps moving into a property which is in your partner’s sole name, you should think about how you would like that property to be owned.  There are two ways in which you can legally own a property, either as “joint tenants” or “tenancy in common”, we can help you understand which is best suited to your circumstances.

Children Matters:

Children Matters are governed by the Children Act 1989, which applies to married couples, those in civil partnership and co-habitees.

On separation, disputes may arise about where and with whom a child will live, or how much time they will spend with each parent.  It is important that you understand how the law deals with these issues.  The Court generally prefers families to resolve their differences privately.  It will not interfere unless it is called upon to do so by one or other parent.  When considering whether to make an Order, the Court will decide whether it is in the best interests of the child (rather than one or other parent) and it views their welfare as being of paramount importance.

Child Arrangement Orders

If an agreement can be reached regarding the children’s living arrangements and how much time they will spend with the non-resident parent, then there will be no need to approach the Court for an Order.

However, if arrangements for the children cannot be agreed, it might be necessary for you to apply to the Court for a Child Arrangements Order.  The Order will regulate those arrangements by setting out where the children will make their primary home and how much time they will spend with the non-resident parent.

It is important to note that it is the right of the child to see their parents on a regular basis and not vice versa.  The Courts have no power to make decisions for children who are 16 years of age or older.  When making a decision the Court will consider the welfare checklist under Section 2 of the Children Act 1989.  This is a checklist of what the Court should take into account when deciding whether an Order should be made.  The Court first considers the ascertainable wishes of the children.  The Courts tend to listen to the wishes and feelings of children who are over the age of 13 as they tend to “vote with their feet” and decide for themselves where they want to live and how often they wish to see the non-resident parent.

Financial Provision for the Children:

If you and your partner have separated and your children live with you, then your former partner has an obligation to pay you regular child maintenance payments, to support the children.  The level of child maintenance is determined by the Child Maintenance Service (CMS) and not through the Court, unless your former partner’s annual gross income exceeds £156,000 then you could apply to the Court for a “top-up” in respect of the level of child maintenance payable.

If you have insufficient capital of your own, the Court can order your former partner to make some capital available to provide you with a home until your youngest child reaches 18 or finishes full time education.  Whether or not your former partner is able to afford this will largely depend upon his available capital and resources.

You can also apply for a lump sum, usually to pay for large items such as a car, if you need it in order to, for example, drive the children to school.  Whether or not you would be successful in this sort of claim would again depend on your former partner’s capital and resources.

Parental Responsibility and Birth Registration

Parental Responsibility is the right and obligation of parents to make decisions for the children of the family, in important areas of their lives and often where they are too young to make decisions for themselves.  By law, mothers automatically have parental responsibility – always.  The position for fathers is different.  A father can only obtain parental responsibility automatically if:

• He was married to the child’s mother at the time of the child’s birth or he married her at a later date; or
• The child was born after 1 December 2003 and the father is named on the child’s birth certificate.
• Alternatively, parental responsibility can be acquired by unmarried fathers by obtaining formal agreement with the child’s mother or an Order from the Court.

Pensions

On separation, the Court does not have the power to order a pension share (essentially splitting one party’s pension fund between the parties) as is available to divorcing couples. This of course could be seen as unfair, particularly if one party has not been able to build up a pension because they have stayed at home to care for the children.

Inheritance

In the absence of a Will, co-habitees do not have any automatic rights under the intestacy rules to inherit any part of his or her partner’s estate. The surviving partner might be able to make a claim against the estate under the Inheritance (Provision for Family & Dependents) Act 1975, if no provision has been made, or on the basis that inadequate provision has been made under a Will or by operation of the intestacy rules. However, when making this sort of claim, it is important to note that a co-habitee is not treated in the same way as a spouse.

Co-habitation Agreements

Co-habitation or “living together” agreements are becoming increasing popular amongst co-habitees.  These agreements can provide a framework for couples during their relationship and set out what should happen to their assets or the children if the relationship comes to an end.  If you determine this framework at the outset, then you can avoid protracted litigation down the line.

Law Commission’s proposals for reform:

In 2007, the Law Commission recommended the introduction of a new statutory scheme of financial relief on separation, based on the contributions made to the relationship by the parties.

The scheme would have been available to eligible co-habiting couples.  Couples who have had a child together or who have lived together for a minimum period would have been eligible.  Couples would have also been able to opt out of the scheme by written agreement.

In March 2008 the Labour Government announced that it would be taking no action to implement the Law Commission’s recommendations until research on the cost and effectiveness of a similar scheme implemented in Scotland could be studied.  In 2011 the Justice Minister announced that the then government did not intend to reform the law relating to co-habitation in that parliamentary term.

In a separate report, published in 2011, the Law Commission recommended that some co-habitants would have the right to inherit under the intestacy rules on their partner’s death, without having to go to Court.  The coalition government did not implement this recommendation.

Despite the increase in the number of co-habiting couples and the Law Commission’s proposals for reform, we are yet to see the introduction of a single piece of legislation which provides legal protection for co-habitants and deals with any claims that they may have on separation or when a co-habitee dies.

If you have any queries about Co-habitation, please contact Priya Dhokia, Head of Family and Private Wealth by telephone on 020 7625 6003 or by email p.dhokia@fgdlaw.co.uk

If an employee is unfairly dismissed by an employer and intends to bring an action against the employer for unfair dismissal, then both the employer and employee must be mindful of the employee’s duty to mitigate their losses. This is stated under s.123(4) of the Employment Rights Act 1996 where the employee will be expected to explain to the Tribunal what actions they have taken by way of mitigation. This includes looking for another job and applying for available state benefits.

The Tribunal is obliged to consider the question of mitigation in all cases. What steps it is reasonable for the employee to take will then be a question of fact for its determination. The courts have made clear, however, that the standard to be imposed on an employee, who has suffered unfair dismissal, should not be overly stringent. The burden of proof is on the employer, and it is not enough for the employer to show that there were other reasonable steps that the employee could have taken but did not take. It must show that the employee acted unreasonably in not taking them. This distinction reflects the fact that there is usually more than one reasonable course of action open to the employee (Wilding v British Telecommunications Plc [2002]). This point has been explained further in the recent Employment Appeal Tribunal (EAT) ruling of Cooper Contracting Ltd v Lindsey [2015], where the employer argued that there were more lucrative options available to the employee who opted to work as self-employed rather than as an employee following his dismissal. The EAT dismissed the employer’s appeal that awarding the employee three months of losses was unreasonable; the EAT confirming that by the employee accepting lower paid, yet more desirable employment was not an example of him acting unreasonably. The EAT confirmed that the Tribunal will take into account the views and wishes of the employee as one of the circumstances to ascertain whether they have acted unreasonably although it is the Tribunal’s assessment of reasonableness and not the employee’s that counts.

Failure to mitigate is likely to arise in several different circumstances. The most common argument raised by employers is that the employee had not made sufficient effort to look for new work or had confined their search to too narrow a range of jobs. Employees should therefore keep documentary evidence (e.g. job adverts, application letters) to show the steps they have taken to find new work. This obligation is ongoing so therefore the longer the dispute remains, the greater the opportunity for the employer to collate appropriate evidence to counter the employee’s claims as to quantum.

The duty to mitigate only arises after the dismissal. Therefore, where an employee rejects an offer of new terms before the dismissal has taken effect, this cannot be a failure to mitigate, as no duty to mitigate yet exists.

For further information about an employment issue, please contact our Employment Department.

Contacts:

Charles Grossman: c.grossman@fgdlaw.co.uk

What does the Consumer Rights Act say?

With the introduction of the Consumer Rights Act (CRA) in October, traders have had to rethink their Terms and Conditions of Sale to reflect consumer’s additional protection. It is now a requirement by law that in all contracts for the sale of goods there is an implied term that the goods supplied are to be of satisfactory quality. This widens the right to consumers as under the Sale of Goods Act 1979 this was only for business to business contracts. In the first six months the burden of proof lies with the trader to prove the goods were of satisfactory quality, an example of a reverse burden of proof.

The consumer may have a short-term right to reject the goods; the short-term right to reject under the CRA expires after 30 days (or a shorter period in the case of perishable goods). This 30 day period can be extended by agreement between the trader and the consumer but it cannot be reduced.

A consumer is only obliged to return the goods to the trader if the contract says so otherwise the consumer must simply make the goods available for collection. Whether the consumer sends the goods back or the trader collects them the trader must pay the costs of return.

The CRA contains a new provision which states that goods are not in conformity with the contract where all of the following apply:

• Installation of the goods forms part of the contract.
• The goods are installed by the trader or under the trader’s responsibility.
• The goods are installed incorrectly.

The CRA expressly states that bespoke goods are to be treated as goods, rather than the end product of services. This new provision reflects the position under the Sales and Guarantees Directive and ends some uncertainty over whether that aspect of the Directive had been implemented correctly in UK law.

Terms and Conditions

Traders will produce Terms and Conditions for The Supply of Goods Online, The Supply of Goods On-Premises, The Supply of Services On-Premises and The Supply of Goods and Services On-Premises.

The below is an exhaustive list of amendments which should be made to these Terms and Conditions in light of the CRA:

• Consumer obliged to return rejected goods (supply of goods)
• Right to cancel (supply of goods online)
• Trader may reject an order it it cannot meet a delivery specified by a consumer (supply of goods)
• Trader must deliver goods within 30 days unless agreed otherwise with consumer (supply of goods)
• Pre-contract information about delivery (supply of goods)
• Goods in conformity with contract (supply of goods)
• Goods as installed (supply of goods on-premises)

For a consumer’s Right to cancel we suggest inserting the following clause into your Terms and Conditions:

Exercising your right to change your mind (Consumer Contracts Regulations 2013). For most products bought online you have a legal right to change your mind within 14 days and receive a refund. These rights, under the Consumer Contracts Regulations 2013, are explained in more detail in these terms.

Contacts:

Raj Dhokia: r.dhokia@fgdlaw.co.uk