APPENDIX 4
Letter to the Clerk of the Committee from
Eversheds, Solicitors (PS 9)
1. INTRODUCTION
Thank you for your letter of 11 February inviting
our comments on the divorce aspects of the Welfare Reform and
Pensions Bill.
2. EVERSHEDS
This letter is submitted on behalf of Eversheds,
which is the second largest law firm in Europe, with 1,500 legal
and business advisors based in 19 locations. The Eversheds' national
pensions team comprises of 30 lawyers.
I declare an interest as author, with Maggie
Rae (who is well known to you)[39],
of a book on pensions and divorce published by Butterworths, and
as Chairman of the Divorce Corporation, which provides services
to solicitors and IFAs on the valuation of pension rights in matrimonial
cases.
3. USE IN
PRACTICE
As already mentioned, our view is that pension
sharing is just one amongst several remedies available to the
parties and to the court, and because of the valuation process
involved, will be used in moderation, certainly in comparison
with offsetting and earmarking.
4. RESPONSE
4.1 Apart from some technical comments, which
we are submitting through other organisations, including the National
Association of Pension Funds and the Association of Pension Lawyers,
we have some general observations.
4.2 Size of legislation
We have produced a consolidation of the legislation
relating to pensions and divorce, and in accordance with the proposals
made in the Bill. In "8 point print" this runs to 55
pages; it will be substantially longer once the Regulations and
the Finance Act changes are in place.
4.3 Drafting reform
One cannot but admire the ingenuity and expertise
of parliamentary draftsmen, and the speed with which they work.
However, in practice, this legislation will have to be applied
by solicitors and explained to their clients. Practitioners will
need to explain to clients the pros and cons of each of the options,
the different tax implications, the different legal aid implications,
and the different risks involved. As mentioned in the evidence
given before your Committee, other countries manage to produce
such legislation in much shorter and more readable form, and it
is difficult to believe that the well recognised intellectual
ability of the parliamentary draftsmen could not be directed to
expressing the intentions of Parliament in a more succinct and
understandable form.
4.4 Further complexities
The legislation will have to be further extended
once SERPS begins to be phased out and the new second state pension
introduced. No doubt the NIRS 2 computer will be able to record
any pension sharing arrangements for several generations to come,
but it will be a strain on it. Fortunately it is expected that
relatively few Sharing Orders will be made.
Can I thank you and the Committee for the opportunity
to make, or repeat, these comments on reforms which have made
what ought to be sensible and simple arrangements into a lawyer's
paradise.
24 February 1999
39 Ms Rae acted as specialist adviser to the Committee:
HC 869 para 3. Back
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