Cohabitation - Marriage-Lite - or a new set of rights?

Posted: 25/03/2014

Introduction

The way we were: Once upon a time, there was respectable marriage which conferred financial dependence and security on the woman.  Outside a world of defiance of convention and no rights except minimal support for the child.

The way we are: Cohabitation has lost stigma and become a parallel life choice.  As many as 40% of all couples now cohabit and one in four children is born outside marriage. Notwithstanding this English law does not recognise a coherent legal system of relations and obligations called cohabitation.  The notion of a ‘common law marriage’ remains a lingering myth which is serving to leave a significant number of people vulnerable and surprised that the law does not offer them similar protection to their married counterparts.

A recent survey of Members of Parliament has revealed that 69% of parliamentarians agree that there is a mistaken belief in the existence of 'common law marriage' among their constituents and that 57% of MPs believe the law needs to be changed to provide greater protection for unmarried couples upon separation.

The purpose of this article is not only to examine the law as it stands for cohabitants but also to consider options for future reform and to compare the law as it stands in England and Wales with other jurisdictions.

Cohabitants on separation

In contrast to married couples there is no statutory framework to empower the courts to divide all of the assets of cohabiting couples.  Where a property is jointly owned a cohabitant can seek an order for sale from the court.  In terms of division of the sale proceeds consideration would need to be given to whether the cohabitants were joint tenants or tenants in common in unequal shares.  Where a property is in one partner’s name the other partner has no neat legal solution through which to secure an interest in the property and can only turn to trust law.   Pursuing a claim in this area is often complex, uncertain and expensive.  The legal position for cohabitants on separation remains unsatisfactory as even if one asset, for example, the house can be dealt with via the courts (because the woman has a provable interest) pensions cannot be shared nor other capital provision secured.

Cohabitants on death

• Inheritance: In contrast to married couples cohabitants do not benefit automatically under the intestacy rules and nor is there any exemption from inheritance tax on assets passing to a cohabitant.  It is essential therefore that cohabitants make provision for their partner in their Will if either partner wants the other to be provided for financially in the event of death.
• Pension: The courts cannot divide pensions for cohabitants.  It is therefore very important for any cohabitant who is a member of an occupational or private pension scheme to check the scheme rules for details of any benefits that may be payable to a partner and/or dependants.

Cohabitants with children

Fortunately there is little distinction between married and unmarried couples under the Children Act.  If arrangements therefore cannot be agreed between the parents, whether married or unmarried, it is possible to seek the intervention of the court in relation to such matters as with whom the child should live and how often they should see the other parent.  Further, with regard to child maintenance the Child Maintenance Service makes no distinction between married and unmarried parents and the parent’s liability is not dependent on his/her marital status.

There are however still limitations for cohabitants as follows:

• Parental responsibility: This is conferred on cohabiting fathers by specific agreement or court Order unless the father is registered on the birth certificate.
• Schedule 1 Children Act 1989: There is no indirect route to capital adjustment to provide for the carer of the children of the relationship.  Schedule 1 of the Children Act 1989 will not stretch to provide capital for housing or otherwise beyond childrens’ dependancy.  Accordingly there is no power for the court to order an outright transfer of a property to a mother or child unless the father agrees this.  The property would need to be held on trust until the youngest child was 18 or ceased full-time education.  There are practical problems and pitfalls with this, for example identity of trustees, liabilities for repairs, how capital repayments of mortgage are treated etc.

Cohabitation contracts and practical issues

Given the lack of legal protection for cohabitants practical and protective measures are as follows:

Cohabitants can:

• enter into a Cohabitation Agreement to seek to give legal effect to their relationship.  The agreement would be a formal contract which would set out how a couple’s finances are to be run and how assets are to be divided on a breakdown of the relationship;
• draw up a will making provision for each other and any children of the relationship;
• enter into a Deed of Trust setting out how beneficial interests in any jointly owned property are to be held;
• keep pension and life insurance nominations under review;
• consider getting married!

Time to move on

There have been parliamentary attempts to change the law but there is still no actual reform procedure in place in this jurisdiction.  So how could the law be changed so as to provide greater legal protection for unmarried couples upon separation?  In terms of statutory reform there are two principal models for the statutory regulation of relationships other than traditional marriage as follows:

• The first option is an ‘opt in’ system of registered partnership with defined consequences in particular areas of law.  This model is widespread in Europe, notably in France where parties may enter into a 'Pacte Civile'.  The nature and content of these systems is a question of social policy for the legislature, in particular how closely they mirror those of marriage; the precise details differ.  It is important to recognise that it is an opt in scheme in which rights are not automatically conferred and it therefore relies on a mutual willingness to register and does not give full protection to the vulnerable.
• The second principal model is the ‘status approach’.  This is legal regulation proposed by operation of law through statutory definition of a relationship to which legal consequences in defined areas are attached.  This model is widespread in New Zealand and Australia.  Would this however simply be another lesser form of marriage?  Some cohabitants may after all not want to have rights imposed upon their relationship and hence the decision not to marry.

The issue remains one of individual autonomy versus state maternalism and whether we really want a lighter legal straightjacket.

Conclusion

In 2012 there were 5.9 million people cohabiting in the UK, double the 1996 figure.  It is clear that cohabitation is the fastest growing family type in the UK and yet there is little or no protection for couples should they separate.  It is further clear therefore that the time has come for a systematic further review of the law of property rights and compensation where it affects family life in new forms.  Such review would need to go beyond incremental case law improvement to law of trusts – which generally only deals with one asset – the house.  It would also need to consider pensions and the security of capital provision.  The current situation for people who live together in England and Wales more often than not creates injustice and hardship.  Furthermore, can we expect the law to fortify marriage simply by denying a flexible system of rights to new forms of relationship?  It is not simply a question of whether one believes people should be married, but rather about ensuring people are aware of their legal rights.  The fact that two thirds of MPs identify this as a problem points to the need for reform.  It is fitting that recent reform in Scotland has seen the introduction of a framework within which to resolve financial disputes between cohabiting couples.  It is high time for the rest of the UK to catch up and bring the law in step with how millions are choosing to live their lives.  What form any future reform will take however remains to be seen. 

This article was published in New Law Journal in March 2014.

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