Financial provision on divorce and dissolution: Law Commission financial remedies scoping report

Approximate read time: 10 minutes

The House of Lords is scheduled to consider the following question for short debate on 10 November 2025:

Baroness Deech (Crossbench) to ask His Majesty’s Government, following the Law Commission’s Financial Remedies Scoping Report published in December 2024, what consideration they are giving to the reform of the law relating to financial provisions on divorce.

1. Financial remedy orders

On divorce or on dissolution of civil partnership, a couple may agree on how to divide their assets. A consent order can be made by the court to make this agreement legally binding.^[1] If an agreement cannot be reached, then the decision can be made by the court with a financial remedy order. This may include the sale and transfer of property, splitting of pensions, and maintenance payments for spouses, civil partners and children.^[2]

Legislation for financial remedy orders in England and Wales is provided for in the Matrimonial Causes Act 1973, particularly section 25, which is mirrored in the Civil Partnership Act 2004. While case law has developed substantially since 1973, the statute has remained largely unchanged.^[3]

Section 25 of the 1973 act requires the court to “have regard to all the circumstances of the case, first consideration being given to the welfare while a minor of any child of the family who has not attained the age of 18”. The law therefore confers wide judicial discretion. Case law has established that the court should be guided by the principles of needs, compensation and equal sharing, although most cases are focused on meeting needs.^[4]

2. Law Commission’s financial remedies scoping report

The Law Commission is a statutory independent body created by the Law Commissions Act 1965 to keep the law of England and Wales under review and recommend reform where needed.^[5] In April 2023, the then Conservative government asked the Law Commission to review whether the law that governs financial remedy orders “is working effectively and delivering fair and consistent outcomes for divorcing couples”.^[6] Its findings were published on 18 December 2024 in the ‘Financial remedies on divorce and dissolution: A scoping report’ (the ‘financial remedies scoping report’).^[7] A 2010 protocol between the government and the Law Commission states that the responsible minister must respond as soon as possible, with an interim response within six months of publication and a full response within a year.^[8] The government has yet to respond, stating that it will do so “in due course”.^[9]

The report draws on international comparisons and on legal and socioeconomical research, particularly the ‘fair shares’ project funded by the Nuffield Foundation.^[10] The Law Commission also engaged with key stakeholders in writing the report, including members of the public, legal practitioners, the judiciary, academics, legal organisations and civil society organisations.^[11]

2.1 Criticism of the current law

The report concludes that the current law lacks certainty and accessibility:

The 1973 act does not reflect the significant developments to financial remedies law arising out of judicial decisions. Combined with the wide-ranging discretion contained in the current law, this means that it is not possible for an individual going through divorce to understand, by reading the statute, how their case will be decided. The law lacks certainty, and accessibility to an extent that it could be argued to be inconsistent with the rule of law.^[12]

Critics of the current law argue that a lack of accessibility and certainty can encourage disagreement and dispute when couples attempt to negotiate settlements themselves “in the shadow of the law”. Additionally, it is argued that these issues may lead to higher legal costs, while also making it more difficult for people to represent themselves. It is not uncommon for individuals to lack legal representation, accounting for 26% of financial remedies order applicants in 2023.^[13]

The report also reviews the recommendations made in the Law Commission’s 2014 report on matrimonial property, needs and agreements, particularly the proposal to introduce binding nuptial agreements.^[14] Nuptial agreements set out how a couple wishes to divide property and income in the event of divorce or dissolution.^[15] They may currently be considered by the court but are not binding. Some argue that this does not respect individual autonomy,^[16] while others believe that individual autonomy is complicated in the family context of interdependence.^[17]

2.2 Models of reform

The report concludes that the law needs to be reformed but does not make specific recommendations. Instead, it outlines four potential models of reform. These range from codification of current case law to wholesale legislative changes.

The first model of reform would only codify the current law.^[18] This means bringing settled case law principles on financial remedies into statutory form through amendments to the 1973 act or new legislation. This would include codifying the principles of needs, compensation and equal sharing. Under this model, the substance of the law would not change but codification would make it more accessible.

The “codification-plus” model would codify existing case law and reform a number of specific issues of financial remedy law. The report highlights a range of questions that the government may wish to consider, including:

• Should “needs” be redefined? For example, should it only include needs generated by the marriage, such as stopping employment to care for children, or include broader needs, such as those arising from age or disability?^[19]
• Should the law allow for binding nuptial agreements?^[20]
• Should there be a term limit on spousal maintenance? Should there be any exceptions?^[21]
• Should financial provision for children extend past the age of 18?^[22]
• Should the way that conduct is considered be reformed? For example, should domestic abuse be a more prominent consideration in deciding financial remedies?^[23]
• How should matrimonial property be defined? Should pension sharing be the default? Should family homes always be considered matrimonial property?^[24]
• Should limitations on the ability to make a financial remedies claim be reformed? For example, should the ability to make a claim be lost after a certain period of time has passed? Should the current limitations imposed by remarriage or death be removed?^[25]

A guided discretion model would further reduce uncertainty by imposing rules or principles limiting how and when courts can exercise discretion.^[26] The same questions above would need to be considered under such a model.

Finally, the default regime model would involve wholesale changes to the law, prescribing explicit rules to regulate the financial consequences of divorce or dissolution.^[27] Such “matrimonial property regimes” have been adopted in a number of European and Commonwealth jurisdictions. The report highlights key questions that would need to be considered under this model:

• Should marriage have an immediate effect on property rights or should rights continue to be generated upon divorce?
• Should property be shared in all circumstances or should judicial discretion be allowed in some contexts?

2.3 Next steps

The report asks the government two key questions:

• Does government agree that the law governing financial remedies on divorce requires reform?
• If so, upon which of the four models identified in this report should a reformed law be based?^[28]

The report adds that “the Law Commission would be well placed to carry out a future project of law reform once a model for reform has been chosen”.

3. Reaction to the report

3.1 Response from the legal community

Many legal practitioners have expressed support for reform and agree that the current law lacks certainty and accessibility.^[29] However, Resolution, a membership organisation for family lawyers, cautioned against reforms that reduce flexibility, arguing this would result in less fair outcomes.^[30] Instead, they stated that a lack of access to early legal advice is a fundamental flaw in the current process that should be a focus of policymakers.

Mr Justice Robert Peel KC, a High Court judge of the Family Division and national lead judge of the Financial Remedy Court, stated in 2022 that financial remedies law was “relatively settled”.^[31] Judge Edward Hess, chair of the editorial board of the Financial Remedies Journal, noted that this contradicts the report’s statement that the current position “could be argued to be inconsistent with the rule of law”.^[32] Judge Hess was also sceptical that reducing judicial discretion would reduce legal costs and emphasised the need for more research to help the government narrow down its options for reform.

3.2 Parliamentary debates

On 27 February 2025, Baroness Deech (Crossbench) moved a motion on prenuptial agreements to the House of Lords, speaking in support of the 2014 Law Commission report’s recommendation to introduce binding nuptial agreements.^[33]

Baroness Deech also expressed frustration that the 2024 report was only a scoping project. Baroness Deech highlighted that she and Baroness Shackleton of Belgravia (Conservative) had dropped amendments during the passage of the Divorce, Dissolution and Separation Act 2020 in response to the Johnson Conservative government’s commitment to a full review of the law governing financial provision on divorce.^[34] This review was planned to take less than three years “to gather evidence, consult and develop recommendations”. Baroness Deech argued that the 2024 report had not fulfilled this commitment.^[35]

The Lord Bishop of Southwell and Nottingham spoke against binding prenuptial agreements, arguing that people may agree to terms that are unfair if under pressure or that do not consider future circumstances.^[36] He also expressed support for the 2024 report’s codification model of reform while maintaining wide judicial discretion.

Lord Timpson, minister of state at the Ministry of Justice, stated that the government would consider the 2024 report and echoed the report’s conclusion that the scope for reform on prenuptial agreements would depend on wider financial remedy reforms.^[37]

In a House of Commons debate on violence against women and girls on 11 March 2025, Munira Wilson (Liberal Democrat MP for Twickenham), highlighted that undertaking reform, as recommended in the 2024 report, could be an opportunity for domestic abuse to be taken into consideration when making financial remedy decisions. ^[38]

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