Dividing Relationship Property After Separation: Children’s Interests Should Be Taken Into Account

Written by Denise Evans

Recently the Children’s Commissioner, Judge Andrew Becroft asked that the Law Commission’s current review of the Property (Relationships) Act 1976 (“the Act”) consider how the interests of children can be considered and met. He also asked that the review address his concern that the parent who has the care of children needs a “better deal” to ensure they are not disadvantaged after a relationship breakdown.  But do we need to wait for the review?

Section 26 of the Act currently requires the Court to “have regard to the interests of any minor or dependent children of the marriage, civil union, or de facto relationship and, if it considers it just, may make an order settling the relationship property or any part of that property for the benefit of the children of the marriage, civil union, or de facto relationship or of any of them”.

It seems that this requirement has received far less attention than the similar requirement under the Care of Children Act 2004. Routinely children have a lawyer appointed to represent their interests under the Care of Children Act and the Court makes a lot of effort to ensure that children are placed at the forefront of decision making. Why does this not happen now in relationship property cases?

The problem could lie with the Act in that it has several competing principles and the interests of children are not specified as paramount as they are in the Care of Children Act. Sections 1M and 1N set out the principles which guide decision making and specifically refer to the interests of children and the need to address economic disadvantages. On the other hand, the “clean break principle” which is such a feature of the property sharing regime and the presumption of equal sharing of certain assets specified in section 11 means there is a predictable and formulaic response.    

Whilst section 13 provides for unequal sharing where there are extraordinary circumstances, it is well established that this section is rarely used because of the need to show that there are “extraordinary circumstances” and that the circumstances would make equal sharing “repugnant to justice.”

The Act may need reform, however those of us in the dispute resolution profession can play an active role in assisting parents make arrangements for care of their children taking the children’s interests and views into account.

FairWay Resolution Limited has developed a family mediation process which encourages parents to collaborate and make plans to care for their children. This model is not a settlement model of dispute resolution and does not require full and final settlement. The reason for this is that the needs of children change and the parents remain responsible for making decisions about their children until the children are 18 regardless of the parent’s relationship status.  

This same approach is being and could be used more to assist parents resolve relationship property issues. The whole point of the contracting out regime is that parents can make arrangements that do not adhere to the regime specified by the Act. They do however need to have any agreement certified under section 21 of the Act by two independent lawyers. The assistance of lawyers in the mediation process is very useful particularly when they can assist parents to focus on the needs of children.

The reality for many families is that the care of children is shared. There is a need for two warm safe homes where children can spend time with their parents. Parents can be assisted to share resources and costs. Agreements can be made to defer sale of the home so that children can continue to attend the same schools and continue relationships in the neighbourhood. Agreements can also be made to use equity for the purchase of another home.

Sadly, many of the relationship property cases are about rearranging debt. Often financial issues can be a catalyst for family breakup so a process which assists parents to deal with these tricky issues must be preferable. It is important that parents can attend mediation to have these difficult conversations. Hopefully the reform of the Act will include provision for a government funded dispute resolution service such as is available now for Care of Children Act matters under the Family Dispute Resolution regime.

More information

To find out more about Family Dispute Resolution please click here or call us on 0800 77 44 20.

To find out more about mediating Relationship Property Disputes please click here or call us on 0800 77 44 22.