November 28, 2021

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Cohabitation law reform in the UK : the requirement of imminent modern families

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This is a blog contending the requirement of Cohabitation Law reform in the UK, written by Niharika Goel, a law student of VIPS, Guru Gobind Singh Indraprastha University.

Table of Contents

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Former Cohabitant, Harrison was ordered to return the £2.2m she had received for agreeing to vacate her partner’s property in order for it to be sold, to her late parents’ estate. The court held that there was no basis for the payment and she did not have the right to occupy the property as a partner had died intestate. Due to the unavailability of the will which would have provided for her on behalf of their children, she was not even eligible to make a claim against his estate as a dependent because he had died domiciled in Germany. This regrettable decision of Kahrmann vs Harrison Morgan provides a salutary reminder of the disadvantage that befalls a cohabitee and the need for a cohabitation reform in the UK. 

Cohabitants as a class share the feature of a common household, and a level of physical and emotional intimacy akin to that of spouses. Thereafter, the concept encompasses a wide range of relationships, in terms of the degree of commitment shared by the parties, the degree of financial interdependence between them, the duration of the relationship, and so on. It is fair to suppose both that different types of cohabiting relationships may have very different legal needs and that the case for any reform might be rather stronger in some situations than in others. Some commentators who oppose the legal recognition of cohabitants have pointed to what they regard as the lack of commitment necessarily exhibited by cohabitants’ failure to marry. 

However, other research suggests that this portrayal of cohabiting couples as a class is unfairly limited, and that commitment is not the exclusive property of married people. Indeed, since large numbers of couples are living together on the assumption that they currently have legal obligations towards each other, their common misapprehension might be thought, ironically, to reinforce their mutual commitment. It certainly seems difficult to square with the notion that cohabiting couples generally are uncommitted and have deliberately chosen to cohabit in order to avoid potential legal liability. Studies have found various levels of commitment amongst cohabiting couples and among spouses. One research study usefully introduced the idea of a spectrum of commitment, ranging from cases characterised by features which the researchers describe as “full mutual commitment”, through more “contingent cases, to situations where, at the other extreme, there is no evidence of any commitment.

Article 8 : the right to respect for family life and home

Family life can exist between a cohabiting couple, at least where they have children, including step-children, and possibly even where they do not, for the purposes of Article 8 of the European Convention on Human Rights. The court will consider for these purposes whether the couple lives together, how long their relationship has lasted, whether they have children together, whether they are financially interdependent, and so on. The European Court of Human Rights, and English courts, have yet to determine conclusively that same-sex couples, in particular those without children, have ‘family life’ for the purposes of Article 8.

However, even if the couple has a ‘family life’ for these purposes, the state’s failure to recognise such a family by, for example, conferring a legal duty on either cohabitant to maintain the other or a right for the surviving cohabitant to inherit on intestacy, has been held not to breach Article 8. Moreover, while the right to respect for the home under Article 8 does apply to those who have no legal right to occupy the property in question, there is no right to be provided with a home. Nor does Article 1 to the First Protocol confer a right to acquire property. It seems therefore that the UK is under no positive obligation to provide private law remedies for financial relief at the end of any type of relationship.

Article 14 : the right to be free from discrimination in the exercise of Convention rights

Although the State is under no obligation to provide any class of person with remedies for financial relief at the end of a relationship, if it chooses to provide such relief for some categories of person, it must not do so in a discriminatory manner. Article 14 of the ECHR prohibits discrimination on grounds of marital status in the exercise of other Convention rights. In some contexts, such as eligibility for welfare benefits and, for the most part, in their relationships with their children, cohabitants are treated like spouses in English law. 

In relation to remedies for separation and death, they are not. However, for reasons that we explain below, it seems unlikely that this would currently be regarded by the European Court of Human Rights as a violation of Article 14. There is therefore no need, as a matter of  European human rights law, for domestic reform to subject cohabitants to the same legal regime on separation and death as spouses. 

The European Court and Commission have addressed the different treatment of spouses and cohabitants in various contexts, including tax law, widow’s benefits, and remedies on separation. It has consistently upheld states’ different treatment of cohabitants in relation to remedies on the basis that it is legitimate to promote the traditional concept of the family based on marriage, a special status to which distinctive legal rights and obligations apply, at least where cohabitants are free to marry and so bring themselves within the more beneficial legal protection.

However, it is worth noting that the most recent case concerning financial relief in private law was not strong on the merits: even if the applicant had had access to the same legal regime as spouses, little, if any, the remedy would have been provided. How the European Court might react in the future to a case with stronger merits remains to be seen. It is important to remember that the Convention is regarded by the Court as a living instrument, which adapts to changing social conditions.

A right to different treatment in the exercise of Convention rights

Another important aspect of discrimination law is the right to be treated differently from others with whom one is not in an analogous situation. Some cohabitants might argue that they ought not to be subject to the same law as spouses and civil partners in this sphere, precisely because they have not made the same legal commitment. The key issue then is the significance which should be attached, in the context of financial relief on separation and death, to the presence or absence of formal registration of the parties’ relationship and the commitment that registration entails. While the absence of such formalisation may not be felt to justify a complete denial of remedies, it may mean that if any new scheme of remedies for cohabitants were introduced, it should differ in some respects from that applying to spouses and civil partners. In particular, the lack of legal commitment might be felt to affect the extent to which any remedies impinge on respondents’ property rights. It might also have implications for the provision of a right to opt-out of any new scheme. 

Article 1 to the First Protocol and Article 8 : respondents’ property rights

Any reform must also consider the rights of potential respondents, in particular as regards the impact of relief on their property. It has been held that the regulation of rights between individuals under private law will not amount to a “deprivation” of property for the purposes of Article 1 of Protocol 1 unless the law permits the respondent’s property to be taken for a purpose that serves the public interest (rather than the interests of the individual benefited).

An issue may arise regarding the ‘peaceful enjoyment’ of the respondent’s property. But here too, the European Commission has recognised that the state will often require the owner of the property to give up assets pursuant to some obligation under private law. Such rules are regarded as indispensable for the functioning of society under a liberal regime and cannot in principle be held to breach the Convention. Provided that when making rules as to the effects on property of legal relations between individuals, the legislature does not create an imbalance between them which would result in one person arbitrarily and unjustly being deprived of his goods for the benefit of another.

Provided that, any new regime for financial relief was founded on clear principles which offered a sound justification for any order to be made, we consider that no violation of respondents’ property rights would arise. Any argument relating to the respondent’s property rights framed in terms of Article 8 could readily be justified under Article 8(2), as a proportionate interference designed to protect the rights and freedoms of the party benefiting from the relief ordered. Special care would, however, have to be taken in relation to any retrospective operation of a new scheme. 

A majority of the conventional cohabitation household constitute a family of one individual managing the expenses under their sole name, while the other raises the young family. To understand in layman terms, cohabiting partners must divide jointly owned property in case of separation. However, if they hold assets under sole names such as pensions, savings-investment these will not be divided. The subsequent hypothetical separation would lead to the entire sum of assets under the sole name, and the other cohabitant is left in a vulnerable position with no right over such assets at all.  There is no ability to claim for needs in terms of capital, pension, or income. The division of assets is scrutinized on how the assets are owned, who has contributed to a particular asset, and whether any interest has arisen in the assets following that contribution.

In the absence of express trust or contract, the principal court-based remedies available to a cohabiting couple on the breakdown of their relationship are provided by the law of implied trusts and proprietary estoppel, and by Schedule 1 to the Children Act 1989. Child support will also be payable under the Child Support Act 1991. The court-based remedies have been criticised for failing to provide fair outcomes in such circumstances, in particular by failing to recognise the value of certain types of the contribution made by one party to the acquisition of assets owned by the other, and by failing to recognise the economic sacrifices made by those who give up paid employment, for example, in order to care for the couple’s children.

The claimed unfairness of the current law is the result of: 

(1) its dependence upon criteria and distinctions that appear arbitrary in the context of everyday domestic life, particularly in relation to domestic financial management; 

(2) its failure to respond meaningfully or adequately to parties’ interdependence, particularly the impact of their contributions to the relationship, and associated sacrifices, on each party’s economic position at the point of separation; and 

(3) its focus on the acquisition of individual assets, rather than a holistic review of the parties’ economic positions; and its associated lack of remedial flexibility, which prevents it from responding constructively to cases involving modest assets.  

Where the parties have not bought their home together (or where they jointly purchased their home without making a declaration of trust), the law of implied trusts and proprietary estoppel must be invoked in order to ascertain how the beneficial interest in the property is held. This law is concerned with establishing the ownership of individual assets. Establishing an interest in favour of a non-owner may depend either upon express evidence of a common intention to share ownership or, in the case of estoppel, some representation or assurance that the non-owner should have some proprietary interest. Many people do not articulate their intentions or assumptions regarding their home specifically in terms of ownership, they may be more likely to discuss their shared occupation of the home, particularly when the relationship is a happy one. Yet the law insists on the discussion of or belief in ownership. 

Cohabitation outside marriage in England and Wales has become increasingly common over recent decades and is expected to become more prevalent in the future. Similar trends have been observed in many other European countries. Cohabitation is expected to become increasingly common among a wider range of the population in terms of age. The Government Actuary’s Department has predicted that by 2031 the number of cohabiting couples in England and Wales will have increased to 3.8 million. On this projection, over one in four couples will be cohabiting by 2031; 16% of adults will be in cohabiting relationships and 41% married. The elderly cohabiting population is expected to expand at a far greater rate than that of the cohabiting population as a whole. The population pyramid charts opposite are reproduced from the Government Actuary’s Department website. Other data suggest that the number of children dependent upon a cohabiting couple will also increase as more couples have children outside marriage and fewer parents subsequently marry.

In the absence of an express common intention to share ownership, the law of implied trusts will allow such intention to be inferred, and the trust to arise, by the making of certain financial contributions to the acquisition of the property in question. However, the continuing uncertainty about whether and when indirect financial contributions may suffice leaves the party who happened to pay household bills (rather than the mortgage) potentially without recognition for expenditure incurred for the parties’ benefit, while the party who happened to pay the mortgage accrues a beneficial share.

In addition to the problems, unfairness, and complexity, cohabitants face considerable uncertainty under the current law. Of course, for many applicants the outcome is clear, they have no remedy or property right. Others might have an arguable claim under the law of implied trusts and estoppel. But for many such applicants, there may remain considerable uncertainty as to whether the claim will succeed and if so, what their remedy or share will be. 

The uncertainty surrounding equitable remedies derives from several factors: the law’s theoretical complexity and persistent ambiguity on key points, the evidential difficulties involved in establishing the facts necessary to support a claim to interest, and the consequent unpredictability about whether there is any interest at all, and, if so, its size. 

The apparent relaxation of the quantification of constructive trusts recently affected by the Court of Appeal, particularly concerning cohabitants in Oxley v Hiscock, has been subjected to widespread academic criticism for the uncertainty it has produced. It has been said that there remains a real danger that the endorsement of a generalised culture of fair adjudications of entitlement will not only spawn litigation but will also introduce an excessive element of uncertainty or arbitrary (and effectively unappealable) judgment into a field of law which is already unduly complex and unpredictable.

In the context of trust law, this broad quantification exercise poses a real problem for third parties who might find themselves bound by the resulting interest. Estoppel suffers from similar uncertainty as to the precise remedy, but at least in that context, the court may select a monetary remedy that will have no implications for third parties. In both cases, however, the uncertainty for the parties remains.  

Often, the general view is that agreements are enforceable if disputes between cohabitees following the separation related to what was or was not intended concerning the property in which they live. Prior agreements can be used to avoid expensive disputes and having a clear record of the cohabit is the intention in a cohabitation agreement.

i. Jointly held assets

Merely living with someone does not constitute a common-law spouse under English law. Rather, only the bank accounts or investments held in joint names will be considered joint assets as will any real estate held in joint names. Similarly, any items purchased using joint funds or by each cohabitee’s joint contribution will likely be considered as joint assets. However, the dilemma occurs when an asset is held by one cohabitee but the other cohabitee says there was an understanding that it should be shared jointly. To determine the evident shall truth behind such statements becomes an extensive process under the courts. The solution is that the agreement shall be recorded which claims all assets as joint property held in joint names which will further remove any element of doubt.

ii. Shared property

Any cohabitee simply paying rent becomes unlikely to hold any rights in the event of a breakdown or death of other cohabitees. Paying rent merely creates the apprehension that the property is owned by one cohabitee while the other is paying for the ability to live there and does not have any ownership rights.

What can be the solution is holding a valid declaration recording the intentions of the cohabitee regarding co-ownership, which shall be held to be binding and will avoid the need for expensive extensive court proceedings if things turn sour. 

iii. Pension

One of the major drawbacks is that the pension of the cohabitee is the sole asset of that cohabitee. To create protection, if one wishes the other cohabitee to receive a survivor’s pension, after death, they should always make sure to nominate them appropriately using a form from your pension provider as a beneficiary of such pension.

iv. Will

It is extremely necessary to record one’s up-to-date intentions regarding the estate. Depending on how you own any jointly owned property you should record the intention of what should happen to your share in the event of your death. Considering the regrettable circumstances, that the cohabitee may not have an automatic right post-death of one cohabitee, the appointment of guardians for children, having an up-to-date intention can avoid the nightmare scenario of your loved ones giving over your estate after your death.  

Even though family court judges are forward-thinking, open-minded, fitness-focused, they still get restricted within the parameters of the statutory law. If the cohabitation law does not bring up any reforms which can only be done by the legislative changes through parliament, the courts and judges cannot provide any help in its entirety. 

Reformed law as proposed under the cohabitation reform bill would assist in determining applications on discretionary factors considering the welfare of any minor who is a child of either of the parties. Considering income earning capacity property and other financial resources of the parties for what they are likely to have in the foreseeable future. The welfare of any child who lives or might live with either party or the conduct of the parties and circumstances of the qualifying contribution where the respondent can show that the applicant’s contribution was made despite the respondents expressing this disagreement, must be kept in mind.

Such factors if kept in mind and if reforms follow the approach of one dealing with financial protection for former cohabitants and the other making provisions about the property of a deceased person survived by a cohabitant, UK will be a better place for cohabitants to live in.

The first and foremost would be to define a former cohabitant essentially as someone who has had a child with the other cohabitant or who has lived with them for at least three years. The reforms shall provide that such cohabitee shall be able to apply to a court for a financial settlement order which may require the payment of a lump-sum transfer of property, a property settlement sale of property, or pension sharing. Such reform will help the court make an order if it is satisfied, either that the respondent has retained a benefit or that the applicant has an economic disadvantage resulting from the cohabitee’s death. Having regard to various discretionary factors such as income needs as considered by the court on a financial remedy application, the court shall consider it just and equitable to make an order thereof. To apply for a financial settlement, the claim of cohabitee having suffered an economic disadvantage as a result of the relationship, contribution not necessary financial including caring for children and maintaining home shall be qualifying for such settlement henceforth.

Specifically devised family law remedies for financial relief on separation could: 

(1) ensure proper recognition of the parties’ financial and non-financial contributions (not just to the acquisition of particular assets but to their joint lives more generally) and the economic sacrifices they may have involved; 

(2) avoid arbitrary distinctions and lengthy investigation into facts of, at best, marginal relevance to the reality of family life; 

(3) provide flexible remedies without jeopardising the interests of third parties; 

(4) provide a clearer, more legitimate basis for the court’s determination of what fairness demands in any given case; and  

(5) be considered in family, rather than civil, proceedings.  

It is proper to acknowledge there are several categories of cases for which any reform of remedies on separation would have little impact and perhaps, currently at least, a relatively narrow range of cases that would benefit substantially from any new private law remedies. The cases to which any reform of private law could make a significant difference are those involving couples whose home is owner-occupied, whose joint household income is substantially above subsistence level, and who are to some extent financially interdependent. Cases most likely to be affected involve couples with children, given the substantive economic implications of parenthood for both parties. Only a minority of cohabiting couples may currently fall into this category. But a significant number of individuals and, indirectly, their children might benefit from reform of this sort.

Would reforming the law applying to cohabitants, discourage marriage?

If cohabitants’ problems cannot effectively be solved by encouraging them to marry, we need also to consider the concerns of those who might argue that providing financial relief for cohabitants would undermine the institution of marriage. On the basis that the provision of that benefit outside marriage and civil partnership might discourage couples from making that specific legal commitment when they would otherwise have done so.

Debates about family policy often focus on how the provision or withholding of certain legal rights or duties and financial benefits or penalties might affect people’s decisions about their relationships. Yet endeavouring to predict the impact of law and legal change on behaviour in intimate family relationships is an exercise fraught with difficulty. People do not always behave as we might expect or wish them to, given the incentive structure created by the legal framework within which we imagine that they make their decisions.

In considering this question, it is important to bear in mind the relatively limited scope of the present project and the nature of the legal remedies under consideration. We are not dealing with tax and social security law, or other means by which the State might provide benefits to couples, but with private law remedies between the parties to the relationship, designed to achieve a measure of corrective justice between the individuals concerned. The introduction of a package of benefits of that sort might be expected to have a rather different impact on behaviour from the provision of such remedies between couples.  

The introduction of remedies between cohabitants would not straightforwardly encourage or discourage marriage or cohabitation, in the way providing particular tax relief to spouses might be hoped to encourage marriage. The tax exemption might benefit both members of the couple equally, giving them an equal incentive to marry. By contrast, the introduction of remedies exercisable by one cohabitant against the other in the event of separation would not, on the face of it, create an equal benefit to both parties. One party’s ability to seek a remedy from the other in the event of separation necessarily connotes a responsibility for the other party, against whom that order would be made.  

Finally, however, a change in the law regarding the financial consequences of separation would be unlikely to play any greater role in individuals’ decision-making about their personal relationships than the current law does. It seems to us that marriage will always remain highly popular, if not for its legal consequences, then for the strong social, cultural, and religious significance of that institution. Giving some level of legal protection to individuals whose cohabiting relationships end by separation or death would not detract from this non-legal significance of marriage, nor would it undermine the quality and stability of individual marriages. Moreover, in so far as marriage (and civil partnership) and cohabitation remained legally distinctive, the law would continue to cater for diversity within couple relationships.

The majority of the conventional cohabitation household constitute a family of one individual managing the expenses under their sole name, while the other raises the young family. To understand in layman terms, cohabiting partners must divide jointly owned property in case of separation. However, if they hold assets under sole names such as pensions, savings-investment these will not be divided. The subsequent hypothetical separation would lead to the entire sum of assets under the sole name, and the other cohabitant is left in a vulnerable position with no right over such assets at all.  There is no ability to claim for needs in terms of capital, pension or income. The division of assets is scrutinized on how the assets are owned, who has contributed to a particular asset and whether any interest has arisen in the assets following that contribution.

Reformed law as proposed under the cohabitation reform bill would assist in determining applications on discretionary factors considering the welfare of any minor who is a child of either of the parties. Considering income earning capacity property and other financial resources of the parties for what they are likely to have in the foreseeable future. The welfare of any child who lives or might live with either party or the conduct of the parties and circumstances of the qualifying contribution where the respondent can show that the applicant’s contribution was made despite the respondents expressing this disagreement, must be kept in mind. Such factors if kept in mind and if reforms follow the approach of one dealing with financial protection for former cohabitants and the other making provisions about the property of a deceased person survived by a cohabitant, UK will be a better place for cohabitants to live in.


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