Cohabitation – a welcome proposal for reform

The concept of ‘cohabitation’ was introduced in Scotland via the Family Law (Scotland) Act 2006 (‘the 2006 Act’). The Scottish Law Commission (‘The Commission’) has recently published its report in which it assesses the effect of Sections 25 to 28 of the 2006 Act, and how these may be improved upon with changes to the existing law. The proposals will now be considered by the Scottish Government and are likely to be subject to a consultation period. It will take time for the legislation to change. The Commission report is a positive step forward and, if the proposals are accepted and made into law, this will have a significant benefit for former cohabitants looking to resolve any financial issues from their relationship.

‘Cohabitant’ is defined in Section 25(1) of the 2006 Act. It is a fairly inflexible definition which draws parallels to living together as ‘husband and wife’ or ‘civil partners’. It has long been felt that the definition is too restrictive and does not reflect modern couples’ living arrangements.

Section 28 sets out the legal test and remedies available where a party is looking to make a claim following their cohabitation ending. The current language discusses a party gaining ‘economic advantage’ and consequently the other party suffering ‘economic disadvantage’ by virtue of their cohabitation. The current remedies are significantly limited. Both the language used and the remedies available have suffered criticism for their vague and inflexible nature.

The Commission proposals look to change that. The proposed changes will extend cohabitants’ rights, provide greater transparency, and better reflect modern couples’ living arrangements. These include:

• A redefinition of ‘cohabitant’ to better reflect modern living arrangements. They suggest, “…one of two persons who are (or were) living together as a couple in an enduring family relationship…”
• “…all of the circumstances of the relationship…” should be considered, which will allow for a more flexible approach for the Courts. Whether the parties have any children who form part of their family unit is a newly suggested relevant factor.
• A number of guiding principles are to be introduced that limit the effect of any economic advantage or disadvantage by ensuring that any imbalance is shared fairly between the parties.
• It should be ensured that no party is likely to suffer serious financial hardship following the cohabitation coming to an end.
• The economic burden of childcare for a child of the parties or “…any child who has been accepted by the parties as a child of the family…” should be shared fairly between the parties.
• The parties’ resources will be a relevant factor when determining financial claims.
• The time limit to make a claim is to stay at one year following the cohabitation coming to an end however additional proposals are made which would allow former cohabitants to agree in writing to extend the time limit up to 18 months following the end of their cohabitation to allow time to negotiate a settlement and to allow a claim to be raised after the one-year time limit has expired, provided that it expired not more than 2 years before the claim is made and there is good reason for it.

Additional new remedies will allow greater flexibility and fairness to resolve any financial claims including:

• Orders allowing a property to be transferred from one party to another;
• Payments to address any financial hardship, to be paid over a period of up to 6 months;
• Court powers to regulate short-term living arrangements, use of household contents and responsibility to meet ongoing financial liabilities pending sale or transfer of property;
• Court powers to make temporary orders for financial payments to a party before the overall claim has concluded;
• Court powers clarifying how and when any payments are to be made and varying an existing order if it is clear that it cannot be implemented due to a material change in circumstances will provide greater flexibility.

Read here for more information about cohabitation agreements.

Please get in touch if you would like to discuss a cohabitation agreement.