Prioritising Children? Competing Principles in Financial Remedies Reform

A fairer end to relationships identifies four guiding principles: prioritising fair outcomes for children, protecting the vulnerable, providing a clear and accessible framework and protecting the distinct status of marriage. A fifth principle, autonomy, is referred to throughout the consultation, although it is not included in the list of guiding principles. Naturally, these principles can pull in different directions. Whilst the consultation does not explicitly acknowledge the tension or explain how the principles have been balanced with one another, such an analysis is, in our view, essential to promote a coherent framework. Focusing on outcomes for children, we analyse how this is weighed with autonomy and protecting the status of marriage, and whether the consultation always strikes the right balance.

The principles

Prioritising fair outcomes for children

Elaborating on this principle the consultation provides that ‘children should have the security and support that they need regardless of their parents’ relationship status’. The link between a child’s welfare and their primary carer’s financial position is emphasised: ‘the needs of the primary carer and those of a child are inextricably linked. This connection means that financial hardship for a carer can have implications for a child’s wellbeing and future opportunities’.

Preserving the distinct status of marriage

The consultation sets out that ‘Marriage is and will remain a uniquely important social and legal institution and is for many a meaningful way to formalise commitment … the Government is committed to ensuring that cohabitation reforms do not impinge on the unique status of marriage’. Reflecting a concern that may help explain previous governments’ reluctance to address cohabitants’ rights, the consultation proposes that:

• the sharing principle will not apply to cohabitants;
• their needs are to be met at a lower level than those of spouses; and
• maintenance is to be available only in exceptional circumstances.

Yet marriage is in any event distinguished from cohabitation by the formal requirements for its establishment and dissolution, and by its differential treatment in areas such as tax and immigration. It is not explained why different financial outcomes on relationship breakdown are also needed for the ‘distinct’ status of marriage to be preserved.

Autonomy

Autonomy is not identified as one of the consultation’s four guiding principles, but features prominently in the case for reform: ‘these reforms are designed to create a clear and cohesive approach to family law that respects personal choice, keeps marriage as a distinct status and aims to ensure fair outcomes for families’. It underpins the proposals for binding nuptial agreements for spouses and opt-out agreements for cohabitants and may also explain the exclusion of families in which the parents never cohabited from the consultation.

Yet autonomy within intimate relationships is more complex than the consultation acknowledges. As Professor Sharon Thompson writes, ‘in the complex realm of intimate family law agreements, it would be fair to ask whether individuals ever make completely voluntary, rational choices … the concept of autonomy is often illusory … changing circumstances, bounded rationality/optimism bias, and unequal bargaining power all affect the autonomy of one or both spouses’.^[1]

The tensions

Prioritising fair outcomes for children and preserving the distinct status of marriage

The consultation recognises that children may be affected if ‘the financial position of their primary carer deteriorates following separation, as the needs of the primary carer and those of a child are inextricably linked’. A tension therefore arises where preserving the distinct status of marriage is said to require less generous provision for cohabitants than for spouses on separation. The government seeks to achieve this not only through disapplication of the sharing principle, but also by prohibiting maintenance save in exceptional circumstances, and separating needs into ‘needs’ and ‘discretionary needs’, with the latter, covering ‘comforts rather than necessities’, available only to spouses.

The consultation suggests that ‘by ensuring that the primary caregiver has the resources to meet their housing and living needs, a “needs” model promotes continuity and stability for children, reducing the risks associated with financial disruption’.

The principal capital need on divorce is usually housing and if the primary carer’s housing needs are met at a lower level due to their parents’ marital status, this will reduce the child’s standard of living and may create a destabilising disparity between the child’s two homes. Further, the prohibition on maintenance to cohabitants save in exceptional circumstances means that in cases with limited capital (likely to be the majority of cases) the court would not in practice be able to provide even for the primary carer’s core needs to be met, which, as the consultation acknowledges, may have a significant impact on the child.

If differentiation of the financial consequences of marriage and cohabitation is necessary to preserve the distinct status of marriage, we suggest disapplication of the sharing principle would suffice. It would also respect the autonomy of couples who have chosen not to marry, without compromising the financial stability of the primary carer. Balancing those objectives against prioritising fair outcomes for children therefore makes restrictions on needs-based provision difficult to justify given the consultation’s repeated acknowledgement of the link between children’s welfare and the financial position of their primary carer.

Prioritising fair outcomes for children and autonomy for married couples

That nuptial agreements cannot be used to opt out of meeting children’s needs is said to balance autonomy and prioritising fair outcomes for children. It is proposed that spouses should be able to exclude the sharing principle and the obligation to meet ‘discretionary needs’. Unlike for cohabitants, there seems to be no suggestion that maintenance would be restricted to exceptional circumstances.

Maintenance can be, and often is, separated out into spousal and child maintenance. However, as Harrison J points out in a judgment endorsing global orders, child maintenance under Schedule 1 can include support for the caring parent, whilst spousal maintenance ‘inevitably include[s] a very substantial element which provides a direct benefit to the child’; rendering the separation ‘to some degree artificial’.^[2] Whilst the consultation does not separate children’s needs into ‘needs’ and ‘discretionary needs’, plainly a child’s needs can also be met at different levels. It may therefore be that in nuptial agreement cases judges would in the future have to assess the child’s needs and their primary carer’s needs at different standards. Not only would this seem inimical to a child’s welfare, in practice it would be unworkable for a maintenance recipient to manage their finances so that the impact of having their own needs met at a lower level has no effect on the child. Moreover, requiring a primary carer to meet their own needs and those of their child to different standards risks creating opportunities for financial control and economic abuse, which the consultation commits to addressing.

As for cohabitants, we suggest that a more proportionate balance would be struck between autonomy and fair outcomes for children by providing for nuptial agreements to exclude sharing but not to limit needs-based provision. This would accord some weight to autonomy whilst acknowledging its inherent limits,^[3] and help ensure that children are not disadvantaged by financial agreements between their parents.

Prioritising fair outcomes for children and autonomy for cohabiting couples

The consultation justifies opt-out agreements for cohabitants by reference to personal choice, whilst maintaining that children’s interests remain protected as the agreements cannot exclude child maintenance or Schedule 1.

The implications for a child of their primary carer having no claim to financial support in their own right are significant. The consultation acknowledges this when explaining the removal of the qualifying cohabitation period where there is a child of the family, stating that ‘it is important to remove this requirement to ensure that the child’s needs can always be met. A child’s welfare is of utmost importance, and supporting both parents in these situations helps to safeguard the child’s wellbeing’.

Whilst the consultation provides an illustration of how an opt-out agreement may be used in a way that could be said to protect children,^[4] their use is not limited to such situations, and they can have serious implications for children. We therefore suggest that limiting opt-outs to couples where there are no children of the family would likely strike a better balance with the prioritisation of fair outcomes for children.

Prioritising fair outcomes for children and autonomy for parents who never cohabited

Question 30 asks ‘Do you agree that where cohabitants are living together and there is a child of the family, the minimum duration requirement should be disapplied?’, making clear that parents who have never cohabited are excluded from the scheme. Reluctance to impose financial obligations between adults who have never chosen to create a joint household is understandable, but the inadequacy of Schedule 1 as a mechanism for protecting children’s interests does not disappear because the parents never lived together. This approach therefore sits uneasily with the emphasis on the connection between a child’s welfare and their primary carer’s financial position, and with its insistence that children should not be disadvantaged by choices made by their parents over which they have no control.

This tension is particularly challenging and deserves detailed consideration by the government. The consultation’s failure even to mention these children is at odds with the stated commitment to ‘supporting and protecting all types of families’. Different options for supporting children in this situation should be explored, whether by extending rights to such parents within the proposed new regime, or by reforming Schedule 1 to provide the court with greater flexibility than it currently enjoys in such cases.

Conclusion

In a recent judgment Harrison J critiqued the law on child maintenance whereby children whose non-resident parents earn over £156,000 gain entry to a discretionary system, whilst others are ‘confined to the formula’. He described this as ‘a two-tier system in which there is literally one rule for the rich and another for everybody else’. The consultation does nothing to address this, and risks creating an additional, four-tier hierarchy, under which the support available to a child’s primary carer, and therefore indirectly to the child, depends on their parents’ choices: whether they (1) married without a prenuptial agreement; (2) married with a pre-nuptial agreement; (3) cohabited without an opt-out; or (4) cohabited with an opt-out or never cohabited at all.

‘Prioritising fair outcomes for children’ does not necessarily require equal outcomes for children. It does however require that differences in treatment be fully explored and justified as a proportionate way to achieve a legitimate goal. Simply invoking competing principles without an explicit balancing exercise is insufficient. As this analysis has sought to demonstrate, the consultation fails to explain the choices made and, in some instances, appears to strike the balance in the wrong place.