Monday, 27 November 2017

Protecting your interests outside marriage

In a recent article by Amy Foweather, she reiterates the importance of protecting yourself if you are in a relationship but not married. This was highlighted recently by a Channel 4 Programme.

A recent documentary on Channel 4 examined the legal effects of a traditional Islamic marriage (nikah) in this country. Whilst it may spark controversy and media attention, the subject is nothing new. Advocates in this area have been trying to raise awareness for years, albeit with differing opinions on what should happen. Should the nikah be automatically recognised as a legal marriage for example, or would it be better to try and raise awareness so people can make an informed choice about whether or not to ensure their marriage is fully recognised?
Having helped many women who were unaware their religious marriages weren’t valid under English law, the lack of awareness and the confusion is apparent. Many websites still in fact refer to the nikahas legal.  Yet the consequences, both emotionally and financially, can be devastating when it transpires upon separation that this isn’t in fact the case. For the marriage to be legally recognised, it is necessary for it to be registered. There are many issues to explore, but this blog is focused on what to do if your marriage ends without registration.
What is sometimes overlooked is the mahr. This is the ‘"financial present"which a male will promise the woman for the nikah. As this is effectively a contract, it may be worth seeking advice on any potential civil claim if these funds are outstanding and are substantial enough to justify pursuing.
Not married? What are your options upon separation?
In the absence of a legally recognised marriage, parties have the same rights as the increasing number of couples who choose to cohabit rather than marry.  In this situation, the relationship has no legal status and it can be difficult to claim a share in the family home or other assets.  In contrast, if you are married you will have access to a financial settlement through the family courts. These permit a fair division of the matrimonial assets and try to ensure needs are met: in particular the needs of any children of the marriage.
However, what concerns many is the fear factor which can discourage some people in unrecognised marriages from even trying to pursue a claim.  Whilst the law hasn’t caught up and the possibilities are limited, there are some options.  The Guardian recently commented that in the absence of a registered marriage people are “unable to go to court for a division of the family home and spouse’s pension”. Whilst this is true in relation to any claims on pensions, it is not always true with regard to the family home. It is essential that people know some options are open to them, albeit much more limited ones than if they had been married for a long period of time. Legal advice should always be sought before concluding you are ‘unable’ to do anything.
It is possible in some cases to bring a civil claim for an interest in a property, usually the family home. Channel 4 does raise this, but also discusses a case which took five years and cost more than £100,000.  It is essential this doesn’t scare people or prevent them from seeking legal advice. For a case to last that long or cost that much is rare: most are resolved much more quickly and cheaply. A family lawyer can advise on your individual case and provide an initial assessment of its strengths and likely costs. This advice should always be sought before walking away, if you think have a claim of any kind.
There are other possibilities too which you can discuss with your solicitor.
How to protect yourself
A number of legal measures can help to protect your interests if you are or were not in a legally recognized marriage. These include:
A cohabitation agreement
A declaration of trust
Making a will
The essential factor is knowledge and the resulting ability to make the best informed decision for your circumstances, within the remit of the law.  To be sure, always seek advice.
A number of lawyers have called for change in this field and I hope we’ll see improvements with time. But, until then, be sure to explore those things you can do.

Monday, 6 November 2017

Divorced women miss out on £5bn in pensions

Divorced women in the UK could be missing out on as much as £5 billion in pensions every year.
In a survey of more than 10,000 people, more than half of married people said they would fight for their fair share of any jointly-owned property in the event of a divorce. More than a third – 36 per cent – said they would also want their combined savings to be shared.
However there is a dramatic shift in attitudes when the question was pensions. Fewer than one in ten said they would seek a fair share in pensions even though the average retirement fund for a married couple is reportedly as much as £132,000.
Men are more likely to be financially prepared for retirement, the poll found, with 59 per cent of them having saved adequately for the future compared to just 52 per cent of women. Among divorced women, this figure is even lower and because they do not intend to claim a fair share of the pension fund, they can end up relying solely on the state.
The survey was conducted by investment and pension firm Scottish Widows. Retirement expert Catherine Stewart claimed that usually “women’s retirement prospects are worse than men’s” as a result of a “persistent gender pay gap, maternity leave and career breaks”.
Divorce only makes this problem worse she insisted, because not only can it “leave people really vulnerable”, the end of a marriage can also lead them to throw “significant sums of money down the drain”.
Stewart said it was important that both “men and women … better understand the legalities around what happens to pension pots during divorce proceedings, as often they are the second largest, if not the largest asset a couple owns”.

Monday, 30 October 2017

Government update on legal aid review imminent

The government is expected to make an announcement on its long-awaited review of its controversial legal aid reforms this afternoon.
The government has promised a review of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) by April 2018. The act, which came into force in April 2013, removed vast swaths of law from the scope of legal aid.
The then justice minister Sir Oliver Heald QC told an all-party parliamentary group on legal aid in January that the government had set the ball rolling. Last month, justice minister Dominic Raab told MPs that he was 'currently considering' the planned post-implementation review and he would be making an announcement 'in due course'.
The government has come under increasing pressure from MPs to ensure it conducts a thorough review of the act. An early day motion on the cuts attracted 82 signatures from MPs in the Labour, Liberal Democrats, Green, Plaid Cymru and Conservative parties.
The legal aid motions's primary sponsor is Green Party MP Caroline Lucas. Co-sponsors are Labour MPs Karen Buck and Andy Slaughter, Liberal Democrat MP Ed Davey, Plaid Cymru MP Liz Saville Roberts and Conservative MP Peter Bottomley.
Lord Bach, chair of the Bach Commission's report on access to justice, which was published last month, has called for cross party consensus on the issue. Senior Conservative politicians, including solicitor-general Robert Buckland, have already indicated that they are ready to support a rethink on legal aid policy.
For more information click here

Tuesday, 24 October 2017

Valuing pension rights on divorce

A recent article from Family Law, gives us food for thought.
The basis of valuation of the pension rights of a member (whether active or deferred) of an occupational pension scheme will be the ‘cash equivalent’, ie the ‘transfer value’ of the rights. The Trustees of the pension scheme are required to provide a transfer value to members who request them. The transfer value is an actuarially derived capital sum, which is normally computed when an individual transfers from one pension scheme to another. The capital sum is that which will fund the post-retirement pension benefits which have accumulated as a result of the transferring member’s service and/or contributions at the time of transfer. There are, however, various methods of calculating transfer values.

Many occupational schemes include widow’s pensions as a benefit in addition to a retirement pension for the husband. ‘At a Glance’, published by the Family Law Bar Association, provides a methodology for calculating the present value of a widow’s pension but this does not take into account the benefit which a divorcing wife might expect to have enjoyed from her husband’s pension during her husband’s retirement. It is possible that in some circumstances the capital sum which is required to compensate a divorcing wife for the loss of both this benefit and her widow’s pension may be more than 50% of the current transfer value of the husband’s pension, and forensic accountancy assistance may be needed in such cases.

Personal pensions

The self-employed and employees who are not eligible to join ‘defined benefit’ schemes may make provision for their retirement through personal pension plans, in which they contribute to funds which are normally managed by pension providers such as insurance companies. In these schemes, the level of benefits depends on the accumulated value of the contributions (net of charges levied by the product provider) which have been paid in by the scheme member, and, as appropriate, the scheme member’s employer.

As in the case of pension rights under occupational schemes, the use of transfer values is appropriate as the basis of valuation.

An important difference between ‘defined benefit’ pension schemes and personal pensions is that whereas contributions to the former are usually relatively fixed (subject to the actuarial valuation of the fund) at a pre-determined percentage of gross salary (albeit with opportunities for the member to make additional voluntary contributions), contributions to personal pension plans and ‘stakeholder’ pension schemes are at the member’s discretion. It is not unknown for a party to anticipate a divorce by reducing contributions to his or her pension plan, thus reducing the transfer value of the fund. In such cases, the actual use and destination of the funds which would otherwise have been contributed to the pension plan will need to be ascertained by forensic accountants.

Dealing with pension rights after valuation

The options in broad terms for most couples are: (i) to offset the value of pension rights against other assets in a settlement, eg one party retains the pension rights but the other party takes a greater share of the equity in the family home; or (ii) to divide the pension rights, either by ‘earmarking’ or pension sharing.

‘Earmarking’ has been possible since July 1996. This allows a pension attachment order to be made now against pension income arising on retirement. The court may also order that part of any lump sum arising should be paid on retirement. Earmarking is not, however, a ‘clean break’ in relation to pension rights since a proportion of one party’s benefits is in effect attached to the other party after retirement.
Pension sharing was introduced by the Welfare Reform and Pensions Act 1999 and gives parties on divorce or on the dissolution of a civil partnership retirement benefits in their own right, as opposed to rights over one party’s pension income. However, despite pension sharing having been possible for more than 16 years, it appears that pension sharing orders represent only a small proportion of ‘financial remedy orders’. For instance, Family Court statistics for the quarter from January 2017 to March 2017 show that pension sharing orders represented only 14% of total ‘financial remedy disposals’. However, the lack of popularity of pension sharing should not obscure the fact that it may often be worth exploring, particularly if one party has an occupational pension and the other has no pension provision, and the couple’s only substantial assets are pension rights and the family home.

Conclusion

This is a complex subject and the above discussion is merely an overview of the way in which the problem of valuing a future stream of income may be tackled. It is clear that in many of these cases a forensic accountant who understands the issues could be of considerable assistance.

For more information click here


Monday, 25 September 2017

Bach Commission recommends bringing range of family law cases back into civil legal aid

Commission advocates a new Right to Justice Act

In its final report the Bach Commission, which is supported by the Labour Party leadership and the Fabian Society,  calls on the government and other political parties to ensure minimum standards on access to justice are upheld through a new Right to Justice Act. The report will form part of the Labour Party's policy review.

The Commission, which has heard from more than 100 individuals and organisations over the past two years, has found that that cuts to legal aid have created a two-tier justice system where the poorest go without representation or advice.

The proposed Right to Justice Act will:
  • Codify our existing rights to justice and establish a new right for individuals to receive reasonable legal assistance without costs they cannot afford
  • Establish a set of principles that guide interpretation of this new right
  • Establish a new body called the Justice Commission to monitor and enforce this new right.
To make the act a reality, the commission also sets out an immediate action plan for the government to: widen the scope of legal aid, with a focus on early legal help; reform the eligibility requirements for legal aid; replace the Legal Aid Agency with an independent body; and improve the public's understanding of the law.

In respect of family law, the Commission recommends: 
  • The government restores legal aid for early legal help to pre-LASPO levels for all social welfare law and family law.
  • All matters concerning legal support for children should be brought back within the scope of civil legal aid.
  • Family law cases with the following characteristics should brought back into the scope of civil legal aid, with respect to representation in court:
a) representation in particularly sensitive areas of private family law (such as cases in which the primary care of a child is in dispute)
b) cases involving an application to remove a child from the jurisdiction
c) cases where there is local authority involvement in private law children proceedings
d) cases in which an allegation is made which is so serious it would be unjust not to provide legal representation to defend it
e) cases where the question of whether a child should have any contact with a parent or grandparent is in dispute
f) cases where a court determines expertise is necessary to decide a family case in the best interests of the child, but where the non-legally aided party is not in a position to pay a contribution towards that expertise.
  • The exceptional case funding scheme has manifestly failed, and needs urgent review and reform.
  • To read the report click here

Monday, 18 September 2017

CPS to issue first-ever guidance for prosecutors on handling male victims of sexual and domestic abuse

Olivia Rudgard, social affairs correspondent at The Telegraph informs us that there is now
guidance for dealing with male victims of abuse will be sent to prosecutors for the first time as the CPS says they need specific protection in the same way as LGBT and black and ethnic minority people.

Previously there had been no specialised guidance for prosecutors on dealing with male victims of crimes such as rape, sexual abuse and domestic violence.

Prosecutors hope the new documents will tackle attitudes which stop men coming forward for fear that they will be ignored and have their masculinity ridiculed.

While it says men have always been given equal footing with other victims, the document is the first time the CPS has directly addressed their issues.

It plans to update case studies and guidance to challenge myths and stereotypes and include the details of services which provide support for male victims.

Prosecutors will be sent information about the different issues faced by male victims, including the fact that boys are more likely to be sexually abused by "authority figures", while girls are more likely to be targeted by family members.

Boys who have experienced childhood abuse also tend to come forward at a younger average age of 13, compared to 16 for girls.

Forced-marriage and honour-based violence affects men too, the guidance will add, as they can be blamed for the behaviour of women or for not being masculine enough.

A spokesman said the CPS had "previously looked to develop guidance and information on issues
such as teenage relationship abuse, same sex abuse and older victim abuse.

For more information click here

Tuesday, 12 September 2017

Increase in care cases has created a crisis, agrees Lord Chief Justice

Lord Thomas’s final report reviews family court developments over last year
In his final annual report as Lord Chief Justice, Lord Thomas has agreed with the President of the Family Division, Sir James Munby, that the increase in care cases at a time of static judicial resources has created a crisis. 

In Section 6 of his report, devoted to family justice, he notes that between January and November 2016, the year-on-year increase in care cases averaged 20% on top of a similar scale of increase in 2015. Whilst the beginning of 2017 saw the rate of increase slowing, the trend is still upwards. There were 5,051 new public law applications in January to March 2017, up 5% on the equivalent quarter in 2016. Average case duration is beginning to move up again after a long and sustained fall, it now stands at 28 weeks after several quarters hovering around 27 weeks. 

The Lord Chief Justice notes the leading role taken by the judiciary in seeking means of controlling the rise in public law cases through the pilot of settlement conferences and its support of other initiatives such as PAUSEcurrently being piloted by LIFT which seek to tackle the problems which drive families into public law proceedings.

Lord Thomas states that an amended Practice Direction 12J is expected to come into force during this month.

He also notes that a protocol is currently being developed to promote closer co-operation between the judges of the Family Courts of England and Wales and their colleagues in Scotland. The protocol will cover a number of issues of mutual interest including how to approach care cases with a cross-jurisdictional element. It is hoped that, in time, the provisions of the protocol will be further developed and extended to support co-operation on care cases across the whole of the UK.
For more information click here