Simon Blain to speak at The Practitioner’s Forum on Trusts in Divorce 2024

• 19 January 2024
• News

Family Partner, Simon Blain, has been invited to speak at The Practitioner’s Forum on Trusts in Divorce 2024.

Hosted in London on 15 February, the in-person forum brings together Trust and Family lawyers to discuss the complex issues that can arise from trusts in divorce. It is an opportunity to discover the various perspectives that shape trusts in divorce and gain insight from experienced lawyers on how to navigate these intricacies.

Simon will be joined by Stacey Nevin of Kingsley Napley, Emma Holland of Stewarts and Tom Deely of Howard Kennedy LLP. Their session, ‘Understanding How and When Trusts are Brought into Divorce’ will cover:

• The trust as an asset
• Stress testing against divorce
• The powers of the family court

The full article can be read here.

Parliamentary Launch of Resolution’s Vision for Family Justice: A Focus on Cohabitation Reform

• 5 December 2023
• News

On Monday 27 November, Resolution hosted the launch of their Vision for Family Justice in Parliament.

The Vision, which sets out Resolution’s five key recommendations to improve family law/the family justice system, will provide a blueprint for Resolution’s campaigning activity ahead of the next general election and beyond. The Parliamentary launch focused on Resolution’s primary aspiration: to reform the law on cohabitation.

Jo Edwards, Chair of Resolution’s Family Law Reform Committee and Head of Family at Forsters, spoke at the launch about Resolution’s objective to provide a safety net for cohabiting couples on relationship breakdown or the death of their partner. Resolution’s polling ahead of its annual Awareness Week, which ran from 27 November to 1 December, found that 74% of cohabitees agree that ‘the current laws surrounding cohabitation are unfit for today’s modern society’. It also showed that 59% of the population believe cohabiting couples should have better legal protection (with a further 13% being undecided, rather than opposed).

The dramatic increase in cohabiting couples in the UK (over a 25-year period to 2021 there was a 144% increase, and cohabiting couples now represent around 1 in 5 families), makes unmarried couples the fastest growing relationship type in the UK. It was found in Resolution’s polling that 83% of the population expect these numbers to increase in the next decade. This huge growth in the numbers, coupled with people believing they are automatically protected as common law spouses (as Resolution’s polling showed), makes the lack of legal protection for cohabiting couples particularly concerning.

At the Parliamentary launch, both Grant Cameron (current Resolution National Chair) and Jo Edwards emphasised the need for cohabitation reform and the risk of England and Wales remaining a “curious outlier” if there is failure to implement change. She called for Parliamentarians and officials to work with Resolution to change the law on cohabitation to fit the needs of modern families.

Emily Thornberry, Shadow Attorney General, followed Jo Edwards in championing the need for cohabitation reform, acknowledging that the law as it stands is “extraordinarily unfair”. Married couples and civil partners are entitled to a fair and equitable settlement, but the law leaves no such protection for cohabitees. She emphasised that women are often, but not exclusively, the ones left disadvantaged at the end of a cohabiting relationship.

Ms Thornberry confirmed the Labour Party’s commitment to reforming the law for cohabiting couples. She expressed a desire to make this a cross-party initiative, in order to achieve change.

Siobhan Baillie, MP for Stroud, closed the speeches by committing to cross-party support for cohabitation reform, stating that she “warmly welcomes working together”. She concluded that there is plenty of evidence to support reform.

Forsters’ Family team supports Resolution’s reaffirmed commitment to cohabitation reform.

To read articles on the five key recommendations in Resolution’s Vision for Family Justice, see here:

• Cohabitation reform.
• Helping families to find solutions.
• Protecting the vulnerable.
• Ensuring the family courts better meet the needs of families.
• Making family law fit for purpose.

Resolution’s Fifth Vision: ‘Making Family Law Fit for Purpose’

• 1 December 2023
• News

To celebrate Resolution’s 40th Anniversary, the organisation is using Awareness Week (27 November – 1 December) to launch their Vision for Family Justice. These recommendations from family justice professionals set out how the legal system can be improved to fit the needs of modern families. The fifth vision on Resolution’s agenda is ‘Making Family Law Fit for Purpose’.

Child arrangements on separation and divorce

One recommendation is for there to be a statutory requirement to hear the voice of the child at the first hearing in child arrangement proceedings. It was found in Resolution’s polling survey that 71% of people agreed that this recommendation “will help to overcome bias of the main carer”. The centrality of the child’s voice in proceedings is paramount and building a framework around this should be a key focus for future reform in the family justice system.

From April to June 2023, it was found that on average it took 47 weeks for private law cases to reach a final order (more than double the time taken in 2016). Delay can be damaging for the child and so Resolution has recommended a statutory time limit on child arrangement proceedings. They also advocate for streamlining cases by calling for early proactive management from experienced judges or an early and effective triage hearing.

Financial remedies on divorce

In the case of spousal maintenance, Resolution has recommended that the law, in the normal course of events, should make clear that it will be for a fixed term to avoid parties returning to court. However, this should not be limited in a way which would cause hardship to the financially weaker party.

Cases where assets exceed the parties’ needs, and where they were received by way of a gift or inheritance during the marriage, or acquired after the marriage, should be non-matrimonial property. Resolution sets out the instances where such a principle should not apply, for example, where that property is required to meet needs.

International cases

Since the UK’s departure from the EU, costs, delays and complexity for those divorcing, claiming maintenance and for international child cases have increased. There have been conflicting decisions for international families with connections to the UK and an EU member state, and also gaps left in domestic legislation.

Resolution champions the simplification of the legal framework in private family law cases between England and Wales, Northern Ireland and Scotland and calls for support from the EU to allow UK accession to the Lugano Convention.

Forsters’ Family practice supports Resolution’s proposal to improve the operation of the family justice system and calls on Parliament to facilitate making family law fit for purpose.

To see Resolution’s other recommendations, follow the links to our summary articles:

• Cohabitation reform (find the link to our summary article here).
• Helping families to find solutions (find the link to our summary article here).
• Protecting the Vulnerable (find the link to our summary article here).
• Ensuring the family courts meet the needs of families (find the link to our summary article here).

Resolution’s Vision for the family courts to better meet the needs of families

• 30 November 2023
• News

Following the launch of Resolution’s ‘Vision for Family Justice’ this annual Awareness Week, all week we have been considering their five key recommendations for a number of changes to policy, legislation and processes in order to improve the family justice system in England and Wales.

The fourth objective, as set out in the Vision document, linked here, is ensuring that the family courts meet the needs of families.

Responses to Resolution’s 2022 member survey consistently reported how the significant (and worsening) increase in delays, the state of the family courts and the lack of resources negatively impacts upon children and their families. The April to June 2023 family court statistics show that children are waiting nearly a year for the courts to determine which parent they live with, or how much time they spend with their non-resident parent. This leaves families in limbo for an inordinate period of time and in an area of law where the ‘status quo’ is often used as a barometer for future arrangements, in certain circumstances, this can have a significant impact on the relationship between a child and their non-resident parent.

There are no routinely published statistics for delays in financial matters, but a judicial report from September 2021 suggested that it took two years, on average, for proceedings that reach final hearing to be concluded. That is a significant period of time for separating couples to be living with financial uncertainty and to be unable to meaningfully plan for their future.

It is, therefore, not surprising that in response to Resolution’s 2022 member survey, 90% of those surveyed said that court backlogs were causing additional and unnecessary stress and pressure for clients. Resolution’s Vision for Family Justice is therefore calling for the following:

• No further family court closures.
• Online processes that can be evaluated on a case-by-case basis.
• For contested financial remedy cases under a certain value to be fast-tracked, with an emphasis on fewer hearings and shorter timescales.
• Links to Resolution and Law for Life’s Affordable Advice Service to be provided to all Litigants in Person in the family court, and via online court services.

Whilst it is evident that longer term solutions, aimed at reducing the number of private court applications, will require appropriate investment, families need a smooth-running, accessible, contactable and responsive family court. It is hoped that these proposals aimed at ensuring that the family courts better meet the needs of families, along with more public funding for early legal information and advice, and increased access to Advice and Information Meetings, will enable all families going through a separation equal access to family justice.

Forsters’ Family department supports the recommendations made by Resolution. The other key recommendations in the Vision for Family Justice include:

• Cohabitation reform (find the link to our summary article here).
• Helping families to find solutions (find the link to our summary article here).
• Protecting the Vulnerable (find the link to our summary article here).
• Making family law fit for purpose.

Resolution’s Vision for Family Justice on better protecting the vulnerable in the family courts

• 29 November 2023
• News

During Annual Awareness Week, in what is the organisation’s 40th year, Resolution have launched their Vision for Family Justice. This calls for a number of changes to policy, legislation and processes in order to improve the family justice system in England and Wales. The Vision document, linked here, makes five key recommendations.

One area in which Resolution proposes change is in finding ways to better protect the vulnerable. This includes supporting and protecting victims of domestic abuse in the family court, ensuring that legal aid is available for those who need it, and ensuring that children who are affected by family law matters are supported.

Supporting and protecting victims of domestic abuse

Resolution considers that one of the ways practitioners can better support their clients is by screening for domestic abuse and utilising the Resolution Domestic Abuse Alert Toolkit, to identify situations where clients may be suffering from domestic abuse and/or violence.

Resolution further proposes that the prohibition on cross-examination of victims of domestic abuse by perpetrators is extended to apply to any case and not just new cases before the court. They also highlight the importance of judicial consistency in respect of both the implementation of the relevant Practice Directions (PD 12J and PD3AA) and the approach to a need for fact-finding, which will help to maintain the integrity of the court process.

Legal aid

Legal aid is currently only available in limited circumstances. Crucially, Resolution advocates to make public funding available to both victims and alleged perpetrators in children proceedings where there have been allegations of domestic or child abuse. Resolution also proposes that the criteria is widened to include the instruction of a specialist accredited solicitor who has screened for domestic abuse and evidence from health professionals based outside the UK. Making legal aid more widely available could have a huge impact on the protection of children and vulnerable parents. It is no secret that where two parties have distinctly different financial circumstances, the court’s ability to produce a fair result is arguably impaired. Providing increased public funding would allow for greater equality of arms between litigants.

Importantly, Resolution are also pushing for legal aid to be made available for other alternatives to court, including family mediation, collaborative practice and Resolution’s single lawyer scheme. At present, legal aid in family matters is only available in cases where there are or will be proceedings underway. Widening the gateway criteria in this way would not only assist families in finding solutions outside of court but would free-up court time to allow judges to deal with cases where court intervention is most urgently required, for example those where there is a vulnerable party.

Supporting children

Resolution’s Vision also outlines that more needs to be done to help children receive the emotional and financial support they need. They are campaigning for improvement to the child maintenance system, for example by introducing statutory recognition of enforceable child maintenance agreements, and abolition of the ’12 month rule’, to ensure that receiving parents and children have increased financial protection. When it comes to ensuring that children have the appropriate financial support, Resolution highlights that it is ultimately the children of already vulnerable households who can be worst affected and need the greatest care.

Further proposals include that the UN Convention on the Rights of the Child is enshrined into English domestic law and that safeguarding for children participating in Child Inclusive Mediation is improved.

Other key recommendations in the Vision for Family Justice include:

• Cohabitation reform (find the link to our summary article here).
• Helping families to find solutions (find the link to our summary article here).
• Improving the way child arrangements are handled.
• Ensuring the family courts meet the needs of families.

Forsters’ Family department supports the recommendations made by Resolution.

Resolution’s Vision refers to the statistic that 50% to 60% of families coming to court will have allegations and/or other evidence of domestic abuse. Domestic abuse and its impact on parents and children are an important part of family practice and such cases can be hugely complex. It is not only essential that family lawyers are aware of how best to support their clients, but that (much needed) changes are made in policy and law to address the current issues facing the family justice system.

Resolution’s Vision for Family Justice on helping families to find solutions

• 28 November 2023
• News

New Research published by Resolution demonstrates need for Cohabitation Reform

• 27 November 2023
• News

This week (27th November – 1st December 2023) is Resolution’s Annual Awareness Week*.

In honour of the organisation’s 40th year, this week also sees the launch of Resolution’s Vision for Family Justice. The Vision document, which can be found here, draws together research, legal analysis and practitioners’ experience to make five key recommendations for the future of family law.

Top of the list of recommended reforms are proposed changes to the law relating to cohabiting partners. Currently, cohabiting couples have little legal protection when they separate. Resolution proposes urgent reform in order to make financial remedies available to separating cohabitees (subject to certain eligibility criteria). The Vision document suggests that the orders the court should be able to make for cohabiting couples be along the same lines as those available to married couples, albeit granted on a different and more limited basis. Resolution also recommends a review of the law relating to financial provision for children of unmarried parents, and the introduction of protections following the death of a cohabiting partner.

A nationwide poll commissioned by Resolution found around half (47%) of cohabitees are unaware that they lack rights should they split up. This research also revealed that:

• 59% of people polled back better legal protections for cohabiting people.
• 74% of cohabitees agree that ‘the current laws surrounding cohabitation are unfit for today’s modern society’.

Cohabiting couples are the fastest growing family structure. According to House of Commons Library research, 1.5 million couples cohabited in 1996 but that figure increased by 144% over the following 25 years to 3.6 million in 2021. According to the recent Resolution polling, 83% of respondents believe that cohabiting will become even more popular in future. The growing popularity of cohabitation, combined with the lack of awareness around the legal vulnerabilities of cohabitees, and the overwhelming view that the current laws are out of date, speak to the need for urgent reform in this area of the law.

Other key recommendations in the Vision for Family Justice document include:

• There should be more public funding for early legal information and advice.
• The way child arrangements are handled should be improved.
• The family courts need to meet the needs of families.
• The vulnerable must be protected in the family court.

Forsters’ family department welcomes Resolution’s Vision for Family Justice and will be supporting Awareness Week by sharing their thoughts and experiences of the issues facing the family justice system. We hope that policymakers will give vital (and overdue) attention to the needs of families and make the changes needed to create a justice system that is fairer and more fit for purpose.

*Resolution is a membership body representing over 6,500 family justice professionals. Resolution is at the forefront of campaigning for reforms to the family justice system and promoting a constructive approach to resolving family issues. All of the lawyers in Forsters’ family department are members of Resolution and subscribe to its Code of Practice.

Talking Family Law – the Resolution Podcast co-hosted by Simon Blain shortlisted at the Family Law Awards

• 14 September 2023
• News

Family Partner, Simon Blain co-hosts the Talking Family Law – the Resolution Podcast with Anita Mehta. The podcast, now in its third series has been shortlisted as Family Law Commentator of the Year at the LexisNexis Family Law Awards 2023.

As Resolution family law experts, Simon and Anita welcome guests to take a deep dive into topical issues in Family Law covering the whole spectrum of family law, from abduction, surrogacy, and public law to financial remedy. Guests have included Mr Justice Mostyn, HHJ Roberts & HHJ Hess.

The Family Law Awards will be held on Monday 27 November 2023 at Park Plaza Westminster Bridge, winners will be elected by an esteemed judging panel made up of Family Law experts.

To find out more and to listen to the Resolution podcast click here.

Simon and the Forsters Family team are members of Resolution, a community of family justice professionals who work with families and individuals to resolve issues in a constructive way. They campaign for better laws and better support for families and children undergoing family change.

The Forsters Family team won Family Law firm of the Year (London) at the 2021 Family Law awards.

Jo Edwards gives oral evidence to the Justice Select Committee on supporting earlier resolution of private family law arrangements

• 26 June 2023
• News

Head of Family, Jo Edwards, gave evidence to the Justice Select Committee on Monday 19 June about the Ministry of Justice’s recently concluded consultation on supporting earlier resolution of private family law arrangements.

Following the submission of Resolution’s written response to the Ministry of Justice’s consultation, to which Jo contributed as Chair of Resolution’s Family Law Reform Group, Jo was invited to speak in more detail to MPs about the current problems facing the family justice system and how meaningful change may be effected. Jo shared her thoughts on how all forms of Dispute Resolution (DR) should be considered to ensure people have access to the option which best suits them and that children are protected from the fallout of acrimonious separation. She also highlighted the importance of any form of DR remaining voluntary, in order to maintain the integrity of the process, and emphasised that reform must include resources for initial legal advice and signposting. She spoke of the importance of broader public education about alternatives to court/some of the pitfalls of court.

This is the fourth time Jo has given evidence to a parliamentary committee about the family justice system. Jo sits on Resolution’s National Committee and is an active campaigner for family law reform. She is also a qualified mediator and collaborative practitioner.

Resolution is a community of family justice professionals who work with families and individuals to resolve issues in a constructive way. They campaign for better laws and better support for families and children undergoing family change.

Divorce-proofing trusts

• 11 May 2023
• News

Structures crave stability. You wouldn’t choose to build in an earthquake zone. If you had no choice but to do so, you would ensure your structure had sufficient flexibility to withstand a powerful shock.

Divorce is a major source of instability for a family wealth-holding structure because it exposes the structure to scrutiny by a powerful and potentially hostile external body – the family court.

Following the earthquake analogy, in an ideal world, wealth-holding structures would be created in such a way that they are outside the reach of the family court. Failing that, they should be created in such a way that they can adapt and, if necessary, absorb a certain amount of damage without compromising their structural integrity.

This article is based on English law, but the points raised are very much applicable to divorce proofing trusts in most common law jurisdictions.

Jurisdiction

• Not all family courts are equal. Some will have little knowledge or understanding of trust structures or will lack powers to compel disclosure or compliance by trustees. Others, particularly those in common law jurisdictions, will be very familiar with trusts structures and will have an arsenal of legislative weapons available.
  As Mr Justice Coleridge famously said in (J v V (Disclosure: Offshore Corporations) ): these sophisticated offshore structures ……..neither impress, intimidate, nor fool anyone”.
• When considering jurisdiction, much thought is given to the “best” jurisdiction for the trust and firewall legislation However, less thought is given to another aspect of jurisdiction: what are the factors that will enable a beneficiary or their spouse to invoke the jurisdiction of a particular family court?
• Each jurisdiction has its own rules setting out the circumstances in which a party can apply to be divorced in that jurisdiction. There is no international convention regulating the question (although EU member states have a common set of rules), so any dispute as to which is the proper forum for a particular divorce is likely to involve litigation in two jurisdictions. The potential jurisdictional net is cast wider than one might expect.
• It is relatively easy for a couple to move in and out of the jurisdiction of the English family court at different stages of their lives. It is also noteworthy that an individual who has an English domicile, but who has spent little or no time in England, can find themselves subject to the English family court if they divorce.
• There is little that trustees can do to prescribe the divorce jurisdiction of their beneficiaries. However, trustees and their advisers should consider:
  1. Reviewing the likely family court jurisdiction that would apply to each of their beneficiaries at the time the trust is established. That information will prove invaluable when considering what protective steps can and should be taken.
  2. Taking advice if a beneficiary is contemplating moving abroad to establish whether they are potentially entering the jurisdiction of a more hostile family court.
  3. If a beneficiary is contemplating marriage, make enquiries as to the intended spouse’s background (nationality, domicile, habitual residence) and take advice as to whether they will potentially “import” the jurisdiction of their home family court.
  4. Generally keeping abreast of the beneficiaries’ marital situations so the trustees are warned as early as possible of any forthcoming difficulties. However, it is vital that the trustees to NOT take peremptory steps (such as excluding a spouse) if the beneficiary’s marriage is faltering. This is like a red rag to a bull so far as the divorce courts are concerned.

The family court’s powers

Family courts often have extensive powers in relation to trustees and trust assets:

1. Power to compel disclosure. Parties to financial remedy proceedings on divorce are subject to a “duty of full and frank disclosure” in relation to their financial affairs. That requires parties not merely to provide information that is in their knowledge or possession. A beneficiary will be expected to request information from trustees regarding the extent of trust assets and the likelihood that a request for assistance will be agreed to.
2. If the court feels a beneficiary is being deliberately obstructive, the court has power to join the trustees as a party to the proceedings and to require them to provide information regarding trust assets. Trustees are then faced with difficult decisions about whether to submit to the court’s jurisdiction or to refuse and risk potentially adverse publicity if the judgment is published. Joinder can also lead to expensive satellite litigation in the trust’s home jurisdiction as guidance is sought from the local court.
3. Power to vary the terms of a trust if that trust is found to be a “nuptial settlement”, which can be defined as “a settlement for the benefit of one or both of the parties or their children, created because of the marriage, or referring to the marriage, whether made before the marriage (ante-nuptial settlement) or after it (post-nuptial settlement)”. The court often has the power to vary such a settlement by, for instance, reinstating a spouse who has been removed from the class of beneficiaries, or requiring the trustees to make a distribution to a beneficiary to pay off his or her spouse.
4. The court sometimes has resorted to “judicious encouragement” in cases where a beneficiary professes that they are unable to receive a benefit from a trust once the divorce has concluded. In such cases, the court would award the beneficiary spouse a smaller proportion of the matrimonial assets on the basis that the court expected that the trustees would make up the shortfall once the case was concluded, either directly or through a “forced” distribution to the beneficiary.
5. The power, in appropriate circumstances to “pierce the corporate veil” as the court seeks to establish the underlying beneficial ownership of assets held in complex structures. (Prest v Petrodel Resources Ltd & Ors ).
6. In the great majority of cases, where adequate disclosure is made, the family court will understand and respect the trustees’ role. However, the court will look beyond the terms of the trust deed and will examine the extent to which the beneficiary has in fact benefited and the extent to which they can expect to do so in future. So established patterns of benefitting can be detrimental in such circumstances.
7. Dynastic Trusts: a trust that is dynastic in nature is far less likely to suffer adverse consequences than a trust which is clearly primarily for a beneficiary who is divorcing. The court is generally reluctant to interfere with the potential benefits of future generations.
8. Reserved Powers: Settlors reserving powers of revocation, and/or other reserved powers, such as the power to determine distributions and certain extensive investment powers, may find that the courts order them to exercise those powers to bring back the assets into their hands for the purposes of the divorce.
9. Letters of Wishes: Courts are very likely to want to see Letters of Wishes, as they often reveal the real intended beneficiaries and how they will benefit. It is essential to draft them carefully, and with this in mind. They should not be changed when a marriage break-up is in prospect.
10. Is it a trust at all? The very recent La Dolce Vita case in Singapore is a timely reminder that if the trust is, in reality, the settlor’s “alter ego”, then divorce courts will look straight through the trust and regards the assets as those of the settlor.

Nuptial agreements – pre- and post

A nuptial agreement can perform a number of useful tasks in an asset-protection context:

1. Fixing jurisdiction. A nuptial agreement will typically contain clauses in which the parties agree to submit to a particular jurisdiction. They provide powerful evidence of the parties’ intentions at the time they signed the agreement and can be helpful if jurisdiction becomes contested.
2. Fixing choice of law. In addition, a nuptial agreement will typically contain a choice of law clause. This will specify the law which is to be applied when interpreting and giving effect to the agreement, regardless of where the divorce takes place.
3. Arbitration. It is common for nuptial agreements to contain an arbitration clause. Arbitration frequently provides a swifter, less costly and more confidential form of dispute resolution, as compared to court proceedings.
4. Punitive costs. Agreements will frequently contain a clause specifying that a party who seeks to challenge a nuptial agreement in court should be required to pay the other party’s costs.
5. Confidentiality. Nuptial agreements will typically contain extensive confidentiality clauses. In addition to the above, the principal purpose of a nuptial agreement is to set out the terms on which the couple agree their financial claims should be resolved in the event of divorce.

For international couples, care should be taken, wherever possible, to ensure the nuptial agreement will be upheld in each state which could potentially have jurisdiction to hear the divorce.

In England, the Supreme Court considered whether nuptial agreements should be upheld in the landmark case of Radmacher v Granatino . Their conclusion was that they should, subject to some important provisos (neither party should be under undue pressure to sign, both should provide a reasonable level of disclosure of assets, each should have independent specialist legal advice, and the agreement should not be unfair).

For those seeking to mitigate the risk of divorce to structures, therefore, the first step is to ensure beneficiaries enter into a nuptial agreement. We often recommend a clause in the trust deed obliging a beneficiary marrying to enter into a pre-nuptial agreement, unless that provision is waived because the trustees are satisfied that it might be disadvantageous. Failure to do so could mean the beneficiary being excluded or receiving less than they otherwise would.

The Family Court always retains oversight. A pre-nuptial agreement cannot therefore be enforced in the same way as a contract, since the court will always retain the ability to decide whether it would be fair to hold the parties to the terms of the agreement. Even if a nuptial agreement is challenged, however, it is likely that it will result in a far more restricted award than if there were no agreement.

Governance considerations:

1. Selecting jurisdiction for structures and investments (there is little point in setting up a Cook Islands structure if the underlying asset is a UK residential property).
2. Considering carefully the class of beneficiaries.
3. Considering carefully whether a new or existing structure risks being considered a “nuptial settlement”.
4. Considering whether to create a separate trust or sub-trust for a beneficiary perceived to be exposed to divorce risk, so as to limit the potential damage to wider structures.
5. As part of wider family governance conversations, consider a requirement that all beneficiaries are expected to enter into nuptial agreements to protect the trusts, and granting trustees the power to treat those who fail to do so less generously (or to exclude them altogether).
6. Focus on making trusts dynastic in nature.
7. Take great care over reserved powers and revocation powers.
8. Draft Letters of Wishes very carefully, and on the assumption that the divorce court will see it.

Modern Families: Dickon Ceadel speaks at Private Client Global Elite Rising Leaders Brunch 2023

• 20 April 2023
• News

Family Partner, Dickon Ceadel, provided a session in London today at the annual Private Client Global Elite Rising Leaders Brunch entitled ‘Modern Families’ alongside Sarah Aughwane of Withersworldwide.

Dickon’s segment covered the cross dimensional elements of modern family cases focussing on issues surrounding surrogacy and cohabiting couples.

Please contact Dickon if you would like further information on either of these topics.

Family Mediation: carrot or stick?

• 19 January 2023
• News

Non-court dispute resolution offers alternatives to separating couples that can reduce the financial, time and emotional burdens often associated with going to court.

Among the many types of non-court dispute resolution in family cases, mediation is particularly effective in a broad range of cases. Because of this and the huge burdens on the courts at present, some are now considering policy options to require couples to mediate, or otherwise more forcibly be required to consider it. There are risks, however, that mandating couples to participate in mediation would undermine a fundamental plank of the process, its voluntary nature, and in doing so lead to outcomes that are less likely to ‘stick’. Is encouraging voluntary participation in mediation the better way forward?

The problem

Everyone agrees that the family courts are overburdened with cases that (in many instances) should be resolved via non-court processes. Policy makers are looking at ever more innovative ways to provide – and perhaps even enforce – the potential for non-court dispute resolution processes to resolve family disputes faster, with less acrimony and lower costs. Although this has been a clarion call for many years in the family justice system, leading to the advent of the MIAM in 2011, the sweeping cuts to Legal Aid 10 years ago as a result of LASPO brought new impetus to the calls for mediation to be brought front and centre in the family justice system. With the traditional gateway to mediation (via funded initial legal advice) gone, mediation stats plummeted and applications to court sky-rocketed. The Family Solutions Group report, ‘What About Me’ (published in November 2020) highlighted the void this has left where there is a lack of public awareness of mediation and poor signposting towards it or any other non-court dispute resolution. Whilst some said recommendations (focused on public education and practitioner training, among other things) were made, the dial hasn’t moved on.

In November 2021 the Justice Minister, Dominic Raab said that “we ought to be much, much better at using ADR, mediation in particular“. In June 2022 he added that he believes that “Mediation protects children, by removing the bitterness of parental disputes from the amplifying court room“. Sir Andrew McFarlane (President of the Family Division), meanwhile, has spoken extensively on this topic, most notably in various speeches in September and October 2022 announcing the ‘Relaunching family mediation’ project. Speaking on BBC Radio 4 in November 2022, he opined that as many as one-fifth of divorce cases are going to court when not required. Family court judges have also contributed to the discourse, most significantly HHJ Wildblood, who has criticised parents vocally for going to court over non-legal parenting decisions and encouraged parents to use mediation instead. It is increasingly common to see family judges voicing their frustration at couples who are over-burdening the court with superfluous applications.

Although there is no ‘one size fits all’ in family law, some leading judges and policy-makers are pinpointing mediation as a process that (almost) all couples should use. A stronger uptake in mediation could ease the demand on the over-stretched Family Court system and lessen the ever-lengthening delays that couples with more complex disputes experience when going through the Family Court.

Over the last decade, some ‘carrots’ have been implemented by policy makers to entice couples to use mediation to resolve their dispute. For example, since 2014 most separating couples who wish to use the court process to resolve their family disputes must show that they attended a MIAM (a Mediation Information and Assessment Meeting). During a MIAM couples will be educated about mediation and assessed for whether it might be suited to their case, with the aim of encouraging awareness and participation. Pursuing mediation following the MIAM is voluntary, and some blockers to couples doing so have been (a) how easy it is for people to circumvent the MIAM requirement, without any checks and (b) how difficult it is to engage the respondent. Another initiative, which has had some success in increasing participation in mediation is the voucher scheme. Any couple who attended their MIAM after March 2021 is offered a ‘mediation voucher’, which pays up to £500 of the couple’s mediation costs, should they pursue this route.

However, despite these ‘carrots’, the number of couples using mediation to resolve family disputes has not risen in the way hoped (the real litmus test being the family courts, which have seen a 5 week increase in private law cases being resolved in the last year alone, and an overall doubling in case length times in only 6 years).

So, how could more ‘sticks’ be deployed to encourage family disputes to be resolved out of court? And is this appropriate?

Recent commentary has suggested that a stricter approach to participate in family non-court dispute resolution could be on the cards. One such option would make attending a mediation session compulsory for all couples before they can even apply to court to resolve their dispute. Another is paving the way for the making of costs orders, to be imposed upon those who (in the view of the court) refuse unreasonably to engage in non-court dispute resolution processes. But both options seek to force couples away from the court without fully guiding them as to what their other options are and what could help them most effectively.

Compulsory mediation

It is clear that compulsory mediation is of great interest to policy makers as an option. This would likely require, as it does in other jurisdictions, couples to attend at least one mediation session before they can make a court application. Exceptions would be built in where there is a serious concern about the individual couple mediating, for example if there was a history of domestic abuse. Such an approach has already been adopted in Australia, where couples in a parenting or child arrangements dispute must attend a one-hour mediation session before they can apply to the court. Sir Andrew McFarlane has openly displayed interest in the Australian system; if it continues to be seen as a success it is possible English legislators could adopt this approach also.

Despite the allure of a mechanism for fast and effective dispute resolution, there are also risks associated with compulsory mediation. Making mediation compulsory may help some couples resolve their dispute sooner, but it also may have a negative impact on others. Many family law commentators agree that mediation is as a process that works best if the parties come to it voluntarily and willing to mediate. In fact, if either party is unwilling to engage, mediation can worsen the situation as parties create harder lines, and anger and resentment is stoked. Secondly, compulsory mediation would delay many couples getting to a conclusion, likely causing unnecessary stress along the way and potentially enabling one party to exploit the process and even benefit from delay (except where used during a natural gap in a court process). Thirdly, to build and maintain a system that can provide high-quality mediation to the thousands of couples who presently pass through the family courts each year will need recruitment and training of additional mediators to build up capacity. To maintain the integrity of the family justice system, extensive checks will need to be in place to ensure that mediators are adequately qualified and are executing their role correctly. How would all that be funded?

Costs orders

The use of costs orders is another route that could force some couples to think more closely about mediation. The court may be given powers to order that a party pay an element of the other party’s costs if the person against whom the costs sanction is imposed refused unreasonably (in the view of the court) to engage in non-court dispute resolution earlier in the process/at all. This practice is commonplace in PI claims where the use of Ungley Orders, which require a party who has been unwilling to use non-court dispute resolution to justify their reasons for doing so at the end of the court process. If the court does not accept their justification as reasonable, they may be ordered to pay a proportion of the other party’s costs. Arguably, there are family cases where this could be done already, for example if there is deemed litigation misconduct. However, this has rarely been exercised. One issue with this deterrent is that it is retrospective, and so doesn’t save the emotional trauma and cost of going through litigation for the parties. For others who really do need the court’s assistance, they may be deterred so much by fear of a costs order against them that they settle prematurely and on the wrong terms. This can be particularly dangerous in relationships where there is an imbalance of power. Another issue it could raise is one of child welfare in cases where making a costs order against one party could have an adverse impact on any children of that party. Further, it could also risk breaching mediation privilege if attitudes to mediation are unpicked and examined by the court (especially where mediation has been attempted by the couple).

Are there more ‘carrots’ that could be used to increase the uptake in non-court solutions?

Early intervention is key. One of the issues with the current MIAM system is that it occurs at a very late stage, when issues have already escalated and positions often hardened. It can be much more difficult to entice parties into effective mediation at this stage, though skilled mediators would say (rightly) that it’s never too late. Early intervention could take the form of access to free or subsidised legal advice at early stages of separation, and/or the option posited by Resolution and the Family Solutions Group of an IAM (Information and Assessment Meeting). An IAM would aim to inform and signpost couples to their court and non-court options as soon as possible post-separation/relationship breakdown when they would likely be more amenable and willing to mediate, and would focus on all forms of non-court dispute resolution. Policy makers must move away from the notion of one size fits all.

Rather than the use of an Ungley Order, which is deployed at the end of court proceedings, earlier mechanisms could be more effective whereby the party refusing to mediate (or use other forms of dispute resolution) has to justify that position before being able to progress through the court system. This requirement could make mediation/other dispute resolution seem more enticing and would encourage the parties to think seriously about non-court resolution before positions are more entrenched.

Additionally, a public awareness campaign that clearly sets out the dispute resolution routes available to couples and how to take those routes could attract more people to use these options. This, coupled with funded initial advice and signposting, may make it even less likely that court is viewed as the default system for resolving family disputes.

Carrot or Stick?

Although encouraging couples to use non-court dispute resolution processes is necessary to help each couple resolve their dispute in the best way that suits them, making it compulsory risks the process losing its effectiveness for some couples. Before the more drastic ‘stick’ approach is taken, which could serve to delay and worsen parties’ positions and relationship, it might be worth policy makers re-thinking their ‘carrots’ to bring more couples to resolve their issues on divorce/separation willingly, rather than being forced into it.

Rosie Schumm to speak at the Private Client Forum Americas 2022

• 6 July 2022
• News

Family partner, Rosie Schumm, will be speaking at the Private Client Forum Americas 2022.

The three day event, taking place in Mexico on 13 – 15 July, will bring together the most senior and elite advisors to high and ultra high net worth individuals to discuss the most timely and concerning issues across the Americas, with an outlook on the rest of the world.

Rosie will be co-presenting the session ‘Alternative Families, Where Are They Now?’ alongside Gretchen Schumann of Schumann and Partners, Gretel Ciniglio de Pérez of Fabrega Molino and Sergio Michelson of Brigard & Urrutia.

Further details about the conference can be found here.

Mind The Step: Understand your rights and obligations as a step-parent

• 6 June 2022
• News

It is now finally accepted that there is no such thing as a “typical” family. Families comprised of step-children, half-siblings and non-biological parents – so-called “blended” families – are the norm for many across the country, including our clients.

Yet despite step-parents being a common feature in modern families, their rights, obligations and legal relationship with the children of the family are often misunderstood. This is, not least, due to the confusing amalgam of legal and cultural language in our lexicon, and the often overlapping roles of biological and non-biological parents.

Who is a “step-parent”?

To be a child’s step-parent, an individual must be married to, or in a civil-partnership with, one of the child’s biological parents. Living with a child or their parent is not sufficient.

However, acquiring step-parent status does not automatically bestow any rights or impose any obligations on an individual in respect of a child. Step-parents have no legal obligation to make financial contributions towards their step-child’s life, nor do they have Parental Responsibility (“PR”) for their step-children. This means that, in legal terms, step-parents do not have the rights, duties, powers or responsibilities that a parent has. In the absence of an agreement or court order to the contrary, therefore, a step-parent is in the same legal position as a parent’s unmarried partner.

Of course, this does not negate the often significant bond between a step-parent and step-child, nor does it mean a step-parent cannot play an important part in their step-child’s upbringing. However, it can pose practical issues; for example, a step-parent has no legal right to be involved in decisions about a child’s schooling and medical treatment.

Can a step-parent acquire Parental Responsibility?

Should parents and their new spouses wish to formalise the role of the step-parent, there are a number of ways in which this can be achieved:

1. Signing a Parental Responsibility Agreement. Entering into a Parental Responsibility Agreement with a child’s parent (or both parents, if more than one has PR) will give a step-parent PR for the child. This means they will have the same rights, responsibilities and authority as the child’s parent, and that they can, for example, be involved in decisions about the child’s health and education. Acquiring PR in this way will not extinguish anyone else’s PR for the child. It will, however, require the consent of both the child’s parents, which is not always easy to obtain.
2. Obtaining a Parental Responsibility Order. If one of the people who already has PR declines to enter into a Parental Responsibility Agreement with a step-parent, the step-parent can apply to the court for PR. When considering an application, the court will consider the step-parent’s commitment to the child (including to their welfare and their maintenance), as well as the step-parent’s attachment to the child and their reasons for applying. This is a more complex route than signing a Parental Responsibility Agreement, as it will involve going to court. Every person with PR for the child must be named as a respondent to the application and will have an opportunity to oppose it.
3. AdoptionThis is the most drastic route to obtain PR, as it will involve extinguishing the PR of the parent who is not married to, or in a civil partnership with, the applicant step-parent. It is only likely to be appropriate where the other parent has died, or where there is some other reason that they cannot play a meaningful role in the child’s life.

Alternatively, a step-parent may consider that they have sufficient responsibility for their step-child under the powers delegated to them by their spouse. It is common for parents to delegate their PR informally for limited periods. For instance, a parent going abroad on holiday and leaving a child in the care of a step-parent is effectively delegating their PR to the step-parent for the time they are away, so that the step-parent can deal with the child’s school and GP. However, the parent would not expect the step-parent to enrol the child in a new school or arrange for them to have elective surgery without consultation. Such informal and limited delegation of PR is legislated for under sections 2(9) and 3(5) of the Children Act 1989. [1]

Nevertheless, if a step-parent plays an active role in a child’s life, it is important that their spouse makes contingency plans to ensure the step-parent has their clear authority to make decisions in their absence. It can be sensible, if a step-parent will be left in charge of the child for a significant period, for the parent to write a letter addressed “to whom it may concern”, explaining that they have delegated their PR to the step-parent for a limited period and including their own contact details, and those of the other parent, if appropriate, in case of emergency.

What happens if a parent dies?

If a child’s parent dies, a surviving parent with PR will be assumed to be the person who should care for the child, even if they have not played an active role in the child’s life until that point. This is unless there is a Child Arrangements Order in force at the date of death, naming the deceased parent as the person with whom the child is to live. In this event, or where there is no surviving parent with PR, the child will be cared for by the person who is appointed guardian for the child in the deceased parent’s will.

A parent who is concerned about the ability of the other parent to care for the child on their death should therefore take steps during their lifetime to obtain such a Child Arrangements Order or to formalise the step-parent’s role. If they are unable to do so, it can help for a parent to appoint the step-parent as guardian for the child in their will and prepare a letter of wishes setting out their concerns and their preference that the child is cared for by the step-parent in the event of their death. Whilst this appointment will not automatically take effect on the appointer’s death, and whilst a letter of wishes is not binding, such a letter and appointment can provide powerful evidence in court proceedings if a step-parent seeks to acquire PR after the appointer’s death.

In the event that a guardianship takes effect, the guardian will automatically acquire PR for the child.

What happens when a parent and step-parent separate?

If a step-parent separates from a child’s parent, they will not have an automatic right to spend time with the child, even if they have acquired PR, unless they have adopted the child. PR acquired under a Parental Responsibility Agreement or a Parental Responsibility Order does not give a step-parent any automatic rights to see the child, nor does it make them liable to pay child maintenance.

In this situation, a step-parent may wish to apply for a Child Arrangements Order to be named as the person with whom the child is to live, or a person with whom the child is to spend time. They may do so without the court’s permission if they are a step-parent (i.e., if at the time of the application they are still married to the child’s parent); if they have lived with the child for three years (and such period has not ended more than three months before the date of the application); if they have PR; or if they have the consent of all those with PR. All other persons must ask for the court’s permission to apply.

When considering whether to grant a Child Arrangements Order, the court’s paramount consideration will be the welfare of the child in question. This is determined by the court taking into account a number of factors, including the child’s physical, emotional and educational needs, as well as their ascertainable wishes and feelings.

There is a strong chance that a step-parent who can prove that they have an active, beneficial and long-standing relationship with their step-child will be granted contact under a Child Arrangements Order naming them as someone with whom the child is to spend time. Note that when making such an order, the court may grant a step-parent PR for the child, but this is not always the case. If the court goes further and makes a Child Arrangements Order naming a step-parent as the person with whom the child should live, they will automatically acquire PR.

This is a complex area of law. Every step-parent’s relationship with, and rights in relation to, their step-children will be different. If you are considering formalising your role in your step-child’s life, you should seek specialist advice.

If you would like further information about anything covered in this article, please contact our Family team. For advice on revising your will, appointing a guardian and preparing a letter of wishes, contact our Private Client team.

[1] Under section 2(9) of the Children Act 1989 a person who has PR may arrange for some or all of their PR to be met by someone acting on their behalf. Under section 3(5) of the Children Act 1989 a person who has “care of the child” may do what is reasonable in all the circumstances for the purpose of safeguarding a child or promoting their welfare.