Examination of witnesses (Questions 110 - 119)
WEDNESDAY 1 JULY 1998
RT HON
LORD JUSTICE
THORPE
110. Could I ask you to comment on the Scottish
system where I understand that normally only the assets accrued
during the marriage are taken into account, is that correct and
could you make some comments on it if it is correct?
(Lord Justice Thorpe) My knowledge of the Scottish
system is very recently acquired and may not be very profound
because it results from a 24 hour trip to Edinburgh and learning
at a seminar put on for us by Scottish judges, practitioners and
academics. I understand the principal difference between the two
systems is that the Scottish law has never had this principle
of a continuing obligation to maintain the former spouse. The
principle of Scottish law is that divorce operates as though it
were death and so there is no continuing obligation, there is
simply an obligation to make fair division of those assets that
are in being at the divorce stage. For us, one of the most important
quasi assets is the ability of the spouses to generate future
income. As far as the Scottish system is concerned, that is more
or less irrelevant, what you earn after the divorce is yours and
yours to keep and yours to spend. It seems that in Scotland the
earmarking provisions do not bite on income and that seems to
be consistent with the fundamental principle. When it comes to
doing the sums and paying your account at the divorce stage the
system seems to be roughly like this. First of all you calculate
what is the matrimonial property, and there are quite complex
rules which determine what is matrimonial property and what is
not, then you divide the matrimonial property equally, unless
there are circumstances which call, in the exercise of judicial
discretion, for some other division. That seems to be the basic
approach. What they do not seem to have is much recognition of
the financial needs of the primary carer to have a house. Fine
if the division of the matrimonial property on the presumed equal
basis provides her with a house, well and good, but if it is not
enough to provide her with a house the concept of taking something
away from the other spouse which is his on the drawing of the
account in order to provide the home for the children does not
seem to register much. It is said "well, why should the children
take priority over his entitlement?" Those seem to me to
be the principal philosophical differences between the two systems.
There is a lot of evidence to suggest that the Scottish system
works well enough. It seems to be broadly accepted by the judges
and the practitioners as a reasonable tool with which to work,
although we noticed that there were some quite serious criticisms
from the judges and from some of the practitioners that the application
of the principles can work unfairness in individual cases. But
then unfairness in individual cases is the price that you pay
for stated principles.
Mr Wicks: Thank you.
Chairman
111. I want to ask Gisela Stuart to come
in on a supplementary on this section in a moment but can I just
follow that point very briefly. You are right to say that there
is a presumption in Scotland that there is a division of the matrimonial
assets but if the proposed legislation that the Government is
bringing forward builds on the family law in England what would
your comment be about building on the Scottish system north of
the border in a way that would lead you to divide not just the
matrimonial assets 50/50 but actually to decide to do the same
with pension assets?
(Lord Justice Thorpe) Are you asking whether such
a provision would be appropriate for Scotland or for England or
both?
112. Let us start with Scotland. There is
always the danger about importing alien concepts into jurisdictions
which we Scots lawyers sometimes complain about, sometimes with
justification and sometimes not. This is a UK wide proposal. I
am asking if you have any sympathy with the view to follow the
principles and the practices that are established in Scots law
with the transfer of pensions on divorce you would actually be
led to a conclusion of requiring the courts to go 50/50 on the
pension assets as well as the matrimonial property.
(Lord Justice Thorpe) I am very loath to even
attempt an answer to that.
113. Fair enough.
(Lord Justice Thorpe) It is way outside my field.
There are some extraordinarily clever minds in the Scottish system.
Dr Clive of the Scottish Law Commission, who is really the father
of the Scottish 1985 Act, is extraordinarily impressive in his
command of what it was intended to achieve, what it has succeeded
in achieving and how it might be refined. I would feel totally
inadequate to embark on his territory.
Chairman: That is
a helpful suggestion, I might pursue that.
Ms Stuart
114. My supplementary is really prompted
by something you said in the lecture "Dividing The Assets
on Family Breakdown"[3]
and some of the previous discussion in relation to the discretion
and formula debate. You have no problem with presumptions but
there should be rebuttal of presumptions and any system that would
oust the discretion of the court is one that you would feel uncomfortable
with. In that paper you referred to the case Dart v. Dart
and reviewed some of the material and a subsequent case Conran
where there is a statement that says that non-financial aspects
of a wife's contribution to the marriage, such as her special
talent as a housewife and mother, could be taken into account
when assessing some payments and assets. The point that I am trying
to get at here is once we go into such considerations which are
extremely difficult to quantify and at the end of the day we must
quantify them in pounds sterling because that is how the division
will go, and given that the majority of cases along those lines
will be decided by district judges all over the country, are we
now heading for a system where we accept the uniformity of judgments
across the country will be extremely difficult to achieve but
we are prepared to pay that price provided the parties involved
have reached a consensus and feel that the way the judge has divided
things is agreeable to them? I find it very difficult to reconcile
that need that the law as it is applied in one part of the country
should be the same as in another if we introduce such extremely
imponderable aspects of what is ultimately the financial position.
(Lord Justice Thorpe) The only thing I would like
to emphasise is how specialist the family justice system has become
in England and Wales. I do not know whether you appreciate this
and it might just be worth taking a moment to say this. Specialisation
within the family justice system for children's work was made
an absolute requirement when the Children Act 1989 came into effect
but there is also now a clear requirement for specialisation in
the ancillary relief field too. The district judges who are deciding
the majority of the cases have got enormous expertise. As a generalisation
they are an impressive body. They will have had specialist solicitor's
practices in the main doing this work and the competition for
appointment is very stiff. Really the outstanding practitioners
tend to get appointed. They are extremely good at what they are
doing. It is not ordinarily speaking work or responsibility that
is given to people who do not have that level of expertise. We
have also introduced a system whereby the circuit judges in the
county courts are ticketed for this work so that if either by
appeal from the district judge or first instance trial a money
case needs a circuit judge it can only be listed in front of one
of the small band within that court that have acknowledged expertise.
Obviously a high court that has 17 specialist family judges is
something that is a very rare resource. I cannot think of any
other jurisdiction that has that degree of specialisation at such
a level in the justice system. You can say that it is a luxury
for this society to have invested in such specialisation in the
judicial system but I mean we have got it and we should use it
to best advantage and that seems to me giving it the responsibility
of taking these sorts of difficult decisions to do fairness in
the particular case, to produce a bespoke garment that fits the
family rather than an off the peg solution. I do not think that
the introduction of this legislation would result in any overstraining
of the available resource.
Chairman: Can we turn
to the whole question of transfer values and can I ask Chris Pond
to start the questioning.
Mr Pond
115. It is in the context of what you have
just been saying about the ability of the system really to come
to decisions which are going to be fair between the parties. It
is obviously encouraging that you feel that the system can cope
even with this change, quite important change, in the legislation.
My question is specifically in the area of how you value pension
rights themselves. Malcolm Wicks has raised issues about the valuation
of certain different types of property pension versus a house,
for instance, and Gisela Stuart has raised a different issue about
the valuation. The valuation of pension assets themselves are
difficult enough, are they not, and in a number of cases, perhaps
only a small proportion cases but it is significant, we have been
told that the cash equivalent transfer value may not be a fair
way of assessing the value and getting a fair transfer. Are you
also confident that the courts will be able to make a fair division,
especially where the experts disagree about the valuation? How
is a judge in those circumstances going to come to a decision
which both parties will consider to be fair at the end of the
day?
(Lord Justice Thorpe) I think that any new task
that judges are given takes a bit of working in. There will inevitably
be a certain amount of feeling of the way, there will inevitably
be some early reported decisions which will be taken as guideline
decisions. I am not suggesting for a moment that this is not a
considerable task and that it will not need preparation in advance
and then a certain amount of feeling of the way but we have seen
this time and time again. Every time a new power is written into
the legislation there is a sort of settling down period when the
practitioners and judges work out what it means and how it operates.
We saw it with lump sums when they first came in and Settlement
of Property Orders. We all get used to using the new power and
of course in the early stages there will probably be a reliance
on expertise which contributes to the introductory working out
exercise. I am sure in the early cases that there will be a tendency
to bring in experts, particularly if one side or another thinks
that there is any advantage to them to do that. For instance,
in capitalising future periodical payments liabilities, when that
was first being worked out by the judges, the practitioners and
the forensic accountants, it was commonplace to have accountants
in the early cases giving evidence, producing a valuation, a capitalisation
for the individual case but now it is rare to have the experts
because we have all seen how the job can be done without them.
I am not saying that it is going to be immediately and overnight
easy, I am sure that there will be a necessary period of seeing
how it works.
116. Would that learning curve for judges
be steepened somewhat by the provision of special judicial training
in this area? Is there scope for that?
(Lord Justice Thorpe) Certainly. I believe very
strongly in the need for continuing education for judges and there
has been far too little in the past. There has been some recent
improvement in the family law field and the Judicial Studies Board
has now separated the family section from the civil section. So
we have a High Court judge who is responsible for that and he
chairs a Family Law Training Committee and there is even the prospect
of giving individual judges a small budget which they can spend
on acquiring knowledge of their choice. But it is all very much
funding limited. The JSB has only got so much money to spend and
its major current task is preparing judges for the Woolf Reforms.
Hopefully there will be a series of road shows that will concentrate
on this provision.
117. Obviously the job of the courts is
going to be easier if clients are coming forward having been given
appropriate legal advice in this quite complex area in the first
place. That is a challenge obviously for the profession. The first
question is to what extent are you confident that practitioners
will be up to speed by the time the legislation comes in to provide
appropriate advice? The second question is how can clients be
protected by the courts from incompetent legal advisors in this
area?
(Lord Justice Thorpe) There are something like
50,000 solicitors and like any other profession within that huge
number there is great diversity from the excellent to the incompetent.
You can say that of any profession. I do think that the Solicitors'
Family Law Association is a great promoter of quality standards
and excellence in this field. They have had an absolutely tremendous
record of contribution to reform of law and practice over the
years. They are very generous in their response to any request
for help. They are very good at putting on training for their
members. They have a system of compulsory continuing education
and that sort of Association represents about 10 per cent of the
profession overall. If you think of the percentage of those who
do family work at all, I suspect that the SFLA membership would
be quite a high proportion of those who take on family work. In
addition there is the Family Law Committee of the Law Society
which is very good in the same areas. I think that the responsible
and the interested section of the solicitor's profession will
respond appropriately and I think you can have complete confidence
in their ability to give a service. There is no means of excluding
the rogue or the incompetent unless you have a system of accreditation
which is way down the line. As far as the Bar is concerned they
have their Family Law Bar Association, 1,500 members, which is
a high figure when the whole profession is something under 10,000
I think. Although they do not have any compulsory continuing education
except for those who are in their first three years of call, they
are quite good at putting on events. I am sure that they would
prepare themselves appropriately.
118. Perhaps we should consider asking some
of those associations to give evidence to us in addition. Thank
you very much.
(Lord Justice Thorpe) I think that the SFLA are
giving evidence, are they not, to you in the near future? David
Salter is a practitioner who has made a great speciality of pension
law and its effect on ancillary relief, so I suspect you may be
hearing from him. He really knows the nuts and bolts in a way
that I certainly do not.
Mr Pond: I see we
are seeing him in a couple of weeks. Thank you very much.
Chairman
119. To pick up a point before we move on.
This is slightly tangential to the inquiry report. Do you have
views about the rights of audience of solicitors in this very
detailed area of the law? Is this something that you would welcome
and encourage or not?
(Lord Justice Thorpe) The reality is that solicitors
have had rights of audience in family proceedings for years in
the sense that family proceedings are conducted in chambers and
not in open court. Practically speaking the solicitors have preferred
to use the available specialist Bar, certainly in London litigation,
and historically there has always been a tendency for this field
of work to centralise on London in much the same way that Chancery
proceedings centralise on London. There are at any one time, say,
ten or a dozen London firms of solicitors who are recognised as
being pre-eminent in this field. Those solicitor specialists have
never traditionally sought to do the advocacy work themselves,
they have always sub-contracted it to the specialist Bar. I suspect
that they will continue to do so. Their right to appear has always
been there. Certainly there has been some progress towards solicitor
advocates taking cases themselves in recent years in the children's
field at trial in the High Court. Solicitors much more commonly
appear than used to be the case. All that matters, it seems to
me, is quality. It does not matter whether the advocate is labelled
"solicitor" or "barrister" if he can deliver
quality advocacy.
Chairman: I want to
move to the question of pensions as a property right but before
I do so, just for the record, I declare an interest in that I
am a non-practising member of the Law Society of Scotland, in
case Lord Neill comes looking for me. Gisela Stuart has some questions
about the Landau case about which we are obviously interested.
3 Lecture delivered on 21 March 1998 to the Society
of Public Teachers of Law. Back
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