I can help you bypass the truly awful adversarial process of the courts at the time of the breakup...

Jo O'Sullivan

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Cohabitation claims and the pitfalls of court

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I welcome Graeme Fraser to this Blog which is all about claims relating to Cohabitation.  He is the editor of Resolution’s ‘Cohabitation Claims’ (Second Edition) and is the Chair of Resolution’s Cohabitation Committee. 

Graeme, could you give your (very abbreviated) view about why cohabitation claims are so devilishly complicated?   

Graeme: If a cohabiting couple don’t have a declaration of trust or living together agreement, and they are unable to agree on their shares of property ownership, they may claim under TOLATA (the Trusts of Land and Appointment of Trustees Act 1996).  If the non-owning partner made significant payments towards the family home, for example, by making mortgage payments, and it can be shown that there was a “joint intention” that this would result in them having a legal share (a beneficial interest) this might be enough. If they don’t have a formal document, it is difficult to demonstrate a joint intention. However, if the matter was clearly discussed between the unmarried partners and it can be shown that one was being promised a beneficial interest and they had made a financial or other contribution to the family home on that basis, then the Court can infer there was an agreement.

TOLATA is complex, and technically challenging, requiring knowledge and expertise outside the comfort zone of many family lawyers. Proving a beneficial interest in the family home will often require a considerable amount of information and paperwork being produced. Going to court is stressful, expensive and slow, and the outcome may be very uncertain so this should only be considered as a last resort. If one party loses, they might have to pay some or all of their ex-partner’s costs. Many cases do not proceed because the costs involved are not proportionate to the benefit to be gained.

As TOLATA claims are time consuming, expensive and risky, they are best avoided. If an unmarried couple buy a home together, they should give clear instructions to their conveyancers. If one party who owns the home already enters into an express declaration of trust this will clarify intentions as to beneficial ownership. Having a living together agreement is a means of seeking to avoiding disputes. And making a will clarifies what happens when one partner dies

Jo: Are there any alternatives to court when it comes to disputes in relation to property for unmarried couples?

Graeme: The benefits of collaborative law or mediation both help to minimise potential conflict and keep any dispute or issue between the couple private, given that court proceedings brought under TOLATA are heard in public. When TOLATA cases are heard in court, there is a real possibility of the case being reported in the media. There is the further advantage that all issues can be considered during this type of negotiation, for example, arrangements as to where the children will live, or any financial provision to be made to the children.

Neither mediation or the collaborative process guarantee an outcome so it is worth considering if it is not possible to resolve matters to use arbitration instead. If the parties opt for an arbitration process however, they cannot change their minds later and follow the normal court route.

Litigation should be a last resort and the full range of options for DR should be kept in mind. When considering collaborative law, you should have in mind the costs to the parties of instructing new solicitors if the collaborative process fails. If proceedings arise, the parties may be required by the court to provide evidence that DR has been considered. A party’s silence in response to an invitation to participate in DR, or refusal to participate in DR could lead to costs sanctions being imposed.

Jo:  For me the risk of losing a lawyer in the collaborative process should be weighed against the very high success rate.  The lawyers can work creatively involving others to help. Joint instructing independent Counsel to give an Early Neutral Evaluation (ENE) could prove incisive and allow the lawyers to work with the couple to produce a legally binding solution to their problem.

Graeme: Yes, the benefits of ENE for TOLATA disputes are that matters are heard and often resolved earlier by breaking deadlocks which can save significant costs. This could be particularly helpful, for example when resolving issues such as determining the beneficial interests (someone’s share in a property) or the mechanics of valuing and selling the family home.

A Chancery FDR (“Ch FDR”) is available as a DR option in The Business and Property Courts of England and Wales (formerly the Chancery Division) for TOLATA cases involving relationship disputes. It is consensual and the court will not direct a Ch FDR unless all the parties agree to it.

Jo: An FDR is a Financial Dispute Resolution hearing and it’s where the Judge has all in the information s/he needs to make a decision and they give an indication of what they would do if they were adjudicating this case.   It is though possible to force a kind of FDR in TOLATA proceedings.  Under Civil Procedure Rules 3.1(2)(m) ‘to take any other step or make any other order for the purpose of managing the case and furthering the overriding objective, including hearing an Early Neutral Evaluation with the aim of helping the parties settle the case.’ The ENE here is broadly equivalent to an FDR.I have successfully argued for this and the parties did settle very soon afterwards. I suppose the risk is that it’s an extra hearing to pay for and there is a risk is that one of the parties ignores the indication of the Judge and the case continues in its expensive way! 

Jo: Do you think the Covid19 crisis has changed the way this kind of case is settled?

Graeme: During the 2020 CoVid19 lockdown, parties have been encouraged to have their FDRs done privately and remotely, and we can expect this to become more of the norm in future, given the current pressure on Court resources. The private FDRs can take place at solicitors’ offices or barristers’ chambers.

Jo: Yes, I have found private FDR’s very good value.  The parties choose and pay for someone to give an indication of what might happen in a Judgment.  The cost is very cheap compared to continuing with a  court case, the court closures and court delays (often the court simply cancels a hearing the day before!).

How would changing the law by introducing cohabitation remedies as part of family law reform make a difference to the use of DR processes?

Graeme: All these concepts would work a lot better if this area of law were reformed so that it is more discretionary using family law concepts, and that decisions are not purely determined by the court’s assessment of whose evidence it prefers. Despite the fact that cohabitation is the fastest growing family type in the country, until now, legislative reform in recent years has focussed on providing equality of rights rather than protection from hardship. Anticipated and forthcoming changes to improve welfare benefit rights for bereaved cohabitants suggest small moves in the right direction, but only wholesale reform would place cohabitants on a sufficiently fairer footing to enable the DR concepts described above to work better in achieve better and fairer outcomes for separating unmarried families. To enable unmarried couples to achieve a fairer outcome for them and their children, through use of DR processes, the law needs to be made fairer and clearer first so that it  is fit for  purpose.

Jo: Thanks Graeme for your contribution to this blog and your tireless work in the area of cohabitation law reform.

You can contact Graeme at his firm at https://www.ogrstockdenton.com/author/graeme-fraser/