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Is reform on the horizon for cohabitating couples?

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More people cohabit than ever before. In fact, over the last ten years cohabitating couples were the fastest-growing family type, more than doubling from 1.5 million families to 3.3 million families. Despite the surge in numbers, as the law currently stands, cohabitees don’t have the same legal protection as married couples or civil partners on separation or death.

Currently when a cohabiting couple separates, a cohabitee has no right to apply to the court for a financial order. In contrast, a spouse or civil partner may apply to the court for a vast array of financial orders including lump sum payment orders, maintenance payment orders, pension sharing orders and property adjustment orders.

On death, a surviving cohabiting partner has no right to inherit from their deceased partner’s estate under the intestacy rules. In contrast, a surviving spouse or civil partner will automatically inherit a share of the deceased’s estate.

Many argue that cohabitees should be afforded the same legal rights as spouses or civil partners on separation or death. Is change in the air?

Last month, the Supreme Court handed down its judgment in an application by Denise Brewster for Judicial Review (Northern Ireland) [2017] UKSC 8.

Here’s what happened:

Denise Brewster lived with her partner, William Leonard, McMullan for 10 years in a property they owned jointly in County Derry, Northern Ireland. On 24 December 2009, the couple became engaged. Tragically, William died suddenly just two days later.

At the time of his death, William was employed by Translink, the company which provides Northern Ireland’s public transport services. William had been employed by Translink for 15 years. Throughout his employment, William had paid into the Local Government Pension Scheme.

In order for Denise to be entitled to a survivor’s pension, the pension scheme rules provided that she would have to meet certain qualifying conditions and be nominated in a signed declaration. There was no such nomination requirement for married couples or civil partners.

Denise met the qualifying conditions; however there was no record of William having made a nomination in her favour, although she maintained that he had. The statutory body responsible for administering the pension scheme decided she was not eligible for a survivor’s pension in the absence of a written nomination.

Denise appealed the decision in the High Court arguing that the decision was unlawful discrimination contrary to Article 14 of the European Convention on Human Rights and Fundamental Freedoms (“ECHR”) (which prohibits discrimination) when read together with Article 1 Protocol 1 of the ECHR (which provides that every person is entitled to the peaceful enjoyment of his/her possessions).

The High Court held that the nomination requirement was incompatible with the ECHR provisions. This decision was overturned in the Court of Appeal. Denise then appealed to the Supreme Court, which unanimously declared that the nomination requirement should be disapplied, and that Denise was entitled to receive a survivor’s pension under the scheme.

Denise’s case is ground-breaking in that the Supreme Court’s decision granted her the same right to claim a survivor’s pension as a spouse or civil partner.

While a cohabitating partner does not currently have the right to apply for a financial order on separation, or a right to inherit from their partner’s estate in the event of their death, how long will it be before the law considers this difference in treatment discriminatory?

Change is looming. A new bill is going through Parliament which provides cohabitating couples who have lived together for a continuous period of three years or more, with a right to apply for a financial order on separation. The Cohabitation Right Bill had its first reading in the House of Lords on 13 June 2016.

The bill provides that cohabiting couples may execute an opt-out agreement preventing the parties from applying for a financial order on separation. However, the court would retain the power to revoke an opt-out agreement should it deem it to be manifestly unfair. The bill also seeks to amend the intestacy rules to give cohabitees a right to inherit a share of their deceased partner’s estate on death.

The date for the bill’s second reading is yet to be announced.

It is clear that both the Judiciary and Parliament are moving towards equal rights for cohabitees. Many cohabitating couples choose to enter cohabitation agreements which set out their rights and financial arrangements when they live together. For those prudent couples who wish to be clear on their rights and finances, and given the changes anticipated, cohabitation agreements are now more important than ever.

Natalie Carolan