BREAKING UP is hard to do, as Sven-Göran Eriksson and his partner recently found amid a blaze of bad publicity. Although their travails may seem as remote from ordinary people’s lives as a storyline from Footballers’ Wives there is one element that does have resonance. When an unmarried couple go their separate ways, who gets what?
Long-term cohabitation is becoming increasingly popular. So how the property and other assets should be split if a relationship fails is an ever bigger issue, and one where disputes can become even more acrimonious and uncertain than in divorce — witness the recent case of the barristers Kerry Cox and Lawrence Jones.
Despite popular belief, there is no common-law marriage in Britain. When a long-term relationship outside marriage fractures, both partners may face a rude awakening when they find that they have little legal protection. They are dismayed that to gain an interest in what they thought was “their home” they must rely on a hotchpotch of laws based on what agreements or assumptions they may or may not have made.
Unmarried couples can avoid lengthy litigation by making their intentions over property ownership clear from the start. But many couples do not do so, either out of a misguided optimism or because they do not wish their partner to have any rights over their property.
Eriksson is said to have sold one of his properties as part of a financial settlement with Nancy Dell’Olio. His motivations have been widely debated, but she, as a property lawyer, is better placed than most to protect her interests. If they do separate, we may see her get a far greater share in time. But even lawyers sometimes fail to protect themselves in their personal lives, as Cox v Jones very publicly demonstrated. After breaking up, they fought a court battle over the ownership of a London flat and a converted mill. Both properties were registered in Mr Jones’s name.
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The first hurdle for a party claiming an interest in a property is to establish that there was an agreement to share ownership. This can be hard for unmarried partners to prove without anything in writing. In such cases the court may simply have to take the word of one party against the other, based on the credibility of the individuals concerned. Such disputes can become extremely embittered.
In addition, if there was no explicit agreement about the precise share that each party would have in the property, the court must establish ownership on the basis of what it judges to be fair. There is little legal guidance as to what should be taken into account. The result is that judges often have to deal with the issues fairly arbitrarily, so unsurprisingly such litigation is is fraught with difficulties.
As well as each partner’s financial contribution the courts look at other contributions such as improvements to the home. In theory this should go some way towards protecting the vulnerable partner whose financial contributions are smaller — still often the woman — but wider contributions towards the family receive little or no recognition. Unlike divorce proceedings, in which homemaking and child-rearing are given as much weight as who pays the mortgage, with unmarried couples it is financial contributions that really count.
Although Cox v Jones and another recent case, Oxley v Hiscock, have raised public awareness of the limited property rights of unmarried couples, they have not led to a big change in the way the law treats them. There are no immediate plans for reform, despite growing pressure, probably because there are fundamental difficulties in legislating in such a controversial area.
An important first step towards making the system fairer would be to clarify how much weight should be given to non-financial contributions. Another idea is to allow cohabitants to apply for financial relief from their partner, such as maintenance or an interest in the home, after they have lived together for a certain period.
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The Civil Partnership Bill, which will enable same-sex couples who register their partnerships to acquire financial rights, has raised the question of comparable reforms for cohabiting heterosexual couples. But the Bill deals with far more than property rights and provides for a host of other rights and obligations similar to those of married couples. Many Christian and right-leaning pressure groups and politicians seem to equate protecting the rights of cohabitants with undermining the institution of marriage. It remains to be seen, therefore, whether the law can be reformed successfully to protect the vulnerable without equating cohabitation with marriage.
In the meantime, unmarried couples need to think pragmatically about what might happen in the future and make their intentions known to their partners. If they intend to own their property jointly, it should be put into joint names. If they wish to own it in different shares, perhaps to reflect their financial contributions, they should have a trust deed drawn up to reflect their agreement. This is very straightforward to do. A cohabitation contract covering a couple ‘s financial position more generally may be a good idea where other assets are involved.
This may not sound romantic, but neither does a long and bitter battle conducted in a public court. Such simple steps could help to avoid one in the future.
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The authors are solicitors at Reynolds Porter Chamberlain and acted for Kerry Cox