A fairer end to relationships: proposed reforms to divorce law and the law for cohabitants

Reforming financial remedies on divorce

The current law on financial remedies is now over fifty years old and drafted when societal understanding and expectations of marriage were very different. The legislation has been supplemented by case law which have established guiding principles of interpretation. While this has allowed flexibility, it has also resulted in a system characterised by broad judicial discretion and limited predictability.

The Consultation proposes a “codification‑plus” model, which would bring established principles into statute while introducing targeted reforms where needed. The objective is not to replace discretion entirely, but to make outcomes more accessible and foreseeable for divorcing couples.

Fairness through needs and sharing

The Consultation proposes that fairness should be achieved explicitly through the dual principles of:

• sharing – as a starting point for dividing matrimonial property; and
• needs – where equal division is insufficient.

Under this model, the presumption would be that matrimonial assets should be shared equally, unless required to meet needs. This reflects established case law but is not yet articulated in legislation.

Notably, the government is not proposing to elevate “compensation”, the third (but rarely seen in practice) element of financial division, citing its uncertain status and risk of increased litigation.

Clarifying property: defining the boundaries

The Consultation also proposes statutory definitions of matrimonial and non‑matrimonial property.

This is a significant development. At present, the classification of assets — particularly inherited or pre‑acquired wealth — can be contentious and unpredictable. Codification would provide clearer guidance, while still allowing non‑matrimonial assets to become subject to sharing over time (“matrimonialisation”).

A three‑stage approach to needs

The Consultation seeks to bring structure to financial “needs” and proposes a three‑stage hierarchy:

1. children’s welfare first;
2. core financial needs (housing, income and pensions); and
3. discretionary needs (where resources permit).

This approach reflects existing practice but introduces a clearer analytical framework. In particular, it distinguishes between essential needs and lifestyle‑based claims.

Qualifying nuptial agreements

Another key proposal is the introduction of binding qualifying nuptial agreements. These would allow couples to determine financial outcomes in advance, subject to safeguards such as full disclosure and independent legal advice.

Crucially, such agreements would not permit parties to contract out of meeting “needs”, but they would significantly increase autonomy and reduce the scope for contested proceedings.

Domestic abuse and financial outcomes

The Consultation also addresses whether domestic abuse — particularly economic abuse — should play a greater role in financial determinations. Current law sets a high threshold for “conduct”, meaning such factors rarely influence outcomes.

Reforming the law for cohabitants on separation

In contrast to divorce, the law governing cohabitants on separation remains fragmented and inadequate.

Given the 156% rise in cohabitating couples since 1996, it is now a major feature of modern family life, with 51% of children now born to cohabiting couples. The Consultation proposes a new statutory framework to provide targeted protections.

Scope and eligibility

The proposed regime would apply to individuals in “enduring family relationships”, subject to defined criteria:

• a minimum of three years’ cohabitation; or
• a shorter period where the couple has a child together.

The framework would apply automatically but include the option to opt out.

Needs‑based model

Unlike the divorce regime, the separation framework for cohabitants is deliberately narrower. The starting point would be preservation of legal ownership, with departure only occurring where necessary to meet defined needs.

Notably, there is no proposal of equal sharing for cohabiting couples. This reflects the absence of a formal legal commitment and preserves the distinction between marriage and cohabitation.

The model adopts a needs‑based approach, but only essential needs (housing, capital, income and pensions) are considered and discretionary needs excluded. There is a strong emphasis on achieving a clean break and it is proposed that maintenance be available only in exceptional circumstances and for limited periods.

Remedies and structure

It is proposed that a range of remedies would be available — including property adjustment and lump sum orders — but applied within a narrower, needs‑focused framework which mirrors, in simplified form, the approach to divorce while maintaining a clear distinction in outcomes.

Safeguards and opt‑out

A key feature is the opt‑out mechanism, allowing couples to exclude themselves from the framework by agreement, and proposed safeguards would include full financial disclosure, independent legal advice and formal contractual requirements.

Reforming the law for cohabitants on death

The Consultation sets out proposed reforms to give qualifying cohabitants greater rights where a partner dies without a valid Will (“intestate”). At present, cohabitants have no automatic right to inherit and must generally rely on a claim under the Inheritance (Provision for Family and Dependants) Act 1975 (the 1975 Act).

The central proposal is that cohabitants who meet a certain criterion should inherit under the intestacy rules in the same way as spouses/civil partners. The Consultation also proposes that cohabitants have the same priority to apply for probate (a Grant of Letters of Administration), ensuring that those who inherit can also administer the estate.

In terms of the criterion, the government is minded to adopt a “marriage-equivalence” definition of cohabitation, similar to that used under the 1975 Act. It is seeking views on minimum qualifying periods, including whether cohabitants without children should generally have lived together for at least five years and whether a shorter period should apply where the couple have a child together.

The Consultation recognises that the 1975 Act may have to be amended to bring it in line with any new law relating to cohabitants.

Conclusion: a more coherent framework

The Consultation represents a concerted effort to bring coherence to family law at the end of relationships and on death, so that the law better accommodates modern family life.

For families, the proposed reforms offer the prospect of a system that is not only fairer, but more understandable, reducing conflict at a time when clarity is most needed.

The government consultation is open for responses until 14 August. Wedlake Bell will be submitting a response and will be closely following developments in this area and how these impact our clients.

This article is for general information purposes only and does not constitute legal advice or a comprehensive statement of the law. Specific legal advice should always be sought in relation to individual circumstances.

Meet the team:

1. 

   • Rebecca Christie

   • Partner
   • Family & Divorce

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2. 

   • Helena Fairley

   • Associate
   • Private Client

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