Select Committee on Social Security Fifth Report


Memorandum submitted by the Family Law Bar Association (PS 17)


  1. The Lord Chancellor should have power, by statutory instrument, to extend the application of pension sharing to:

    —  small self-administered pension schemes;

    —  agreements between spouses.

  2. Whilst the Bill clearly (and rightly) states that its provisions are not retrospective, there are two exceptions that need to be spelt out clearly, namely:

    (1)  variation of pre-existing maintenance orders; and

    (2)  applications for financial relief after a previous foreign divorce.

  3. Section 25 of the Matrimonial Causes Act 1973 should be amended to give judges guidance on how to apply pension-sharing.

  4. The powers, contained in this Bill and the Family Law Act 1996, to vary an order for financial provision, property adjustment or pension sharing after the order has been made but before it has come into effect, are inordinately complex and difficult to apply. They require radical simplification.

  5. There is no need to provide a special channel of appeals from pension sharing orders and to do so will only create confusion.

  6. The courts should not be confined to making percentage orders for pension shares.


  This Association consists of over 1,700 practising barristers in England and Wales, besides associate members drawn from the ranks of the judiciary at every level. It is a specialist Bar association whose members appear regularly in family courts all over the country. It enjoys close links with the Solicitors' Family Law Association. Through its functions, seminars, publications and by other means, it acts as spokesman for its members, keeps pace with changes in family law and contributes to the legislative process.


1. The ambit of pension sharing

  1.1 Agreements. The draft legislation and consultation paper published in June 1996 proposed that married couples should be able to effect a pension share by one of two means:

    —  by order made under Part II of the Matrimonial Causes Act 1973 or the Family Law (Scotland) Act 1985;

    —  by agreement made in the course of marital proceedings.

  1.2 In our representations to the Committee, we pointed out the need for such agreements to be in a prescribed form. We understand that the same observation was made by other consultees.

  1.3 Whilst we appreciate that the focus of current concern is that the court should possess the necessary powers to achieve pension-splitting, we recommend that the door is kept open by giving the Secretary of State power to extend the ambit of pension sharing to agreements between spouses.

  2.1 Small self-administered schemes. These are omitted from the definition of "pension arrangement" in the new s 25D(3) Matrimonial Causes Act 1973.[40] By implication therefore the court will have power under the Bill to apportion rights under common types of pension contracts, but self-administered schemes will have to be varied, if at all, under the Brooks v Brooks doctrine. This could generate confusion and inequality.

  2.2 We recommend that the Secretary of State has power, by statutory instrument, to extend the definition of "pension arrangement" in section 25D(3).

3. Retrospectively

  3.1 In our Response paper of August 1998, we identified one situation where the Bill should look backwards, namely where the court wishes to commute, and thereby discharge, a wife's maintenance order. Sections 31(7A) to (7F) of the Family Law Act 1996 have now been brought into force[41] so that the court is now able, for the first time, to make a lump sum or transfer of property order in commutation of ongoing maintenance. It is consistent with this "clean break" philosophy, and with the wider aims of pension sharing, that the court should also be able to implement a pension sharing order in addition to, or instead of, other kinds of capital orders.

  3.2 It is to be noted that the powers in s 31(7A)-(7F) were and are exercisable in relation to divorces that took place before those subsections came into effect.

  3.3 We therefore recommend that Clause 70(3) of the Bill be amended to omit the words "or 31(7B)."

  3.4 Further, a new addition has been made to the Bill in its present form in that it has been decided to include Part III of the Matrimonial and Family Proceedings Act 1984 (financial relief after foreign divorce) within its scope (Clause 18).

  3.5 The Family Law Bar Association welcomes this development but would point out:

    (1)  in many cases the court is called upon to grant financial provision where the foreign divorce took place some time, perhaps years, ago;

    (2)  there is no reason in principle why the court should not have power to effect a pension share in such a situation;[42]

    (3)  Clause 70 of the Bill is silent on whether a pension share under s 21 of the 1984 Act (as amended by clause 18(4) of the Bill) could take effect in relation to a divorce granted after the commencement of the Act.

  3.6 Accordingly we recommend that the retrospective operation of Clause 18 is clarified in Clause 70 of the Bill.

4. Amendment of s 25 of the Matrimonial Causes Act 1973

  4.1 In our Response to the Consultation Paper, we illustrated a number of injustices that could arise if the courts were given no guidance on how to exercise the new powers. We suggested there were three choices, not necessarily exclusive alternatives:

    (1)  to leave everything to the good sense of the courts;

    (2)  to set up a number of training courses for the judiciary; or

    (3)  to insert some guidance into the statute itself.

  4.2 We maintained then, and repeat now, that it would be a pity to pass over the opportunity presented by this legislation of setting out at least some guiding principles by which the new powers should be exercised. A suggested draft is annexed.

5. Variation of pension orders: a complex and confusing area

  5.1 We are concerned that Schedule 3 paragraph 6 of the Bill, together with the amendments to s 31 Matrimonial Causes Act 1973 effected by Schedule 8 to the Family Law Act 1996, form an almost unworkable code for the courts to apply when hearing variation applications by one or both spouses.

  5.2 In the law as it stands at present, a typical divorce case tends to demonstrate the following sequence.

    (1)  if required, the dependent spouse applies for interim periodical payments (or "maintenance pending suit") under s 22 of the 1973 Act;

    (2)  following decree nisi, the court hears the substantive application for financial relief and makes a final order under ss 23, 24 and 25B-D. The order may be made after decree nisi but does not come into effect until decree absolute. That apart, it may be made "on decree or at any time thereafter";

    (3)  some time later (perhaps years later) one spouse or the other applies for a variation of maintenance under s 31.

  5.3 The Family Law Act 1996 enacts a new regime in that all financial decision-making should, as far as possible, take place before the divorce order is made. In accordance with this philosophy, orders of a capital nature may be made at any time after a statement of marital breakdown has been received by the court,[43] but will not come into effect until the divorce order is made. Clearly, the intention is that the parties should not "cross the Rubicon" until the divorce order is finally granted, so that they can retract their hostilities and embark on a reconciliation if so desired.

  5.4 We follow the desire for flexibility implicit in this Bill and the 1996 Act, in that the parties or the court should be free to change the financial arrangements at any time up to the divorce order. That aim can be achieved very much more simply by providing either:

    (a)  that no order made under sections 23 to 25D shall be regarded as "final" until a divorce order or separation order is made;[44]


    (b)  that any order made under those sections is variable under s 31 at any time until the making of a divorce or a separation order; thereafter a more restricted regime (corresponding to the present s 31) will come into force.

  This Association prefers the first alternative, for the reasons advanced in our last paper.

  5.5 Besides, we are concerned at the implications of varying a pensions order when the pension share has already been implemented by the trustees or managers of the pension scheme. It may be impossible, or difficult, to restore the position to what it was, or to change it to something else.[45] We think is far preferable that no pension provider should be under obligation to implement the pension sharing order until the divorce order has been made. If that proposition is accepted, then it is unnecessary to give the court any strict variation powers under s 31 since the order remains, at this stage, purely provisional or "executory" and, making amendments is simply a matter of changing the wording.

  5.6 We therefore recommend as a matter of urgency that the whole structure of pre- and post-divorce financial orders under the Family Law Act 1996, and in particular the power to vary, is looked at with a view to rationalisation and simplification.

6. Appeals

  6.1 Section 40A (Schedule 1, paragraph 9). This section, which attempts to lay down a detailed code for appeals against pension orders that have taken effect, is in our view both confusing and unnecessary.

  6.2 It is confusing for two reasons:

    (1)  because there is no meaningful sense in which the pension provider or Secretary of State can be said to "act to his detriment in reliance on the taking effect of the order". Assuming the pension provider implements the order in the way envisaged by the court, he is at liberty to recoup his administrative charges from the parties and therefore suffers no "detriment". Similar considerations apply to the Secretary of State who merely acts in a ministerial fashion and incurs no personal harm or expense;

    (2)  because there is no clear definition of when a "decision of the appeal court can itself be the subject of an appeal". Most appeals in family matters lie to a High Court or county court judge, and no further appeal lies without the leave of that judge or the Court of Appeal. It is unclear therefore whether such a decision "can" be the subject of an appeal in this sense.

  6.3 It is unnecessary, in our view, because appeals from pension orders will fit quite satisfactorily into the existing law and practice, namely:

    (1)  any appeal should be commenced within certain time limits (14 days in the case of an appeal from district judge to judge, 28 days in other cases);[46]

    (2)  the appeal does not operate as a stay unless asked for;

    (3)  leave to appeal may be granted out of time provided:

      (i)  the delay is not too long;

      (ii)  it is satisfactorily explained;

      (iii)  the appeal has merit; and

      (iv)  the respondent will not be unduly prejudiced;[47]

    (4)  the appeal is not likely to succeed where the order below has been carried into effect and it would be difficult to restore the statu quo ante.

  6.4 These principles will apply with ample force to appeals against pension orders. It is the responsibility of the appellant to press on with the appeal and, if necessary to apply for a stay. If he fails to do so and allows an intractable position to arise, he has only himself to blame.

  6.5 We therefore recommend that the proposed s 40A is omitted from the Bill.

7. Percentage orders

  7.1 A new provision inserted in Schedule 4, paragraph 1(6) of the Bill by way of amendment of section 25B of the Matrimonial Causes Act 1973 requires the court to express its order in terms of a percentage of the payment which becomes due to the party with pension rights.

  7.2 We think this is unduly restrictive and will prove difficult to operate in practice, for two reasons.

  7.3 First, courts operate on the rough basis of valuing, and apportioning accrued pension rights to the date of the divorce or (in Scotland) the date of separation. In this way, overall fairness is preserved because the party with pension rights can go on making further contributions to his scheme knowing that in principle they will be for his own (or perhaps his new wife and family's) benefit rather than his former wife's. If now the court is obliged to stipulate a percentage pension share, the former wife will stand to share in the enhanced value of the pension caused by his further contributions, which many people would regard as unjust.

  7.4 Secondly, we are concerned that if the courts attempt to discount the position between divorce and retirement, as described in the preceding paragraph, by awarding the wife a lower percentage of the pension, they will have no accurate information on which to do so since no-one (not even an actuary) will be able to forecast with confidence what the value of the pension—which must be subject to many contingencies such as redundancy, early retirement, etc—will be worth in future. The courts will perforce have to resort to guesswork.

  7.5 We therefore recommend that Schedule 4 paragraph 1(6) is omitted from the Bill.

March 1999

40   As substituted by Schedule 4, para 3(5) of the Bill. Back

41   With effect from 1 November 1998: SI 1998/2572. Back

42   In a case that is currently pending in the Court of Appeal (Jordan v Jordan), a court in San Diego made an order in 1993 that the husband's pension arising from his UK employers should be divided equally "if permitted by the laws of Great Britain". The limited retrospection proposed would enable the US court's intention to be fulfilled under pension sharing. Back

43   S 22A(2), 23A(1) Matrimonial Causes Act 1973, as inserted by Schedule 2 to Family Law Act 1996. Back

44   With the implication (which can be spelt out in the legislation) that a court of first instance has jurisdiction to alter or vary its terms as long as it remains "provisional". Back

45   A concern obviously reflected in the proposed s 40A Matrimonial Causes Act 1973 (inserted by Schedule 3 para 9 to the Bill). Back

46   Family Proceedings Rules 1991, r 8.1(4); RSC Order 59. Back

47   Van Stillevoldt v EL Carriers [1983] 1 WLR 207. Plainly this can be interpreted in context to equate to the "detriment" envisaged by the draftsman of para 9, Schedule 3 to the Bill as it stands. Back

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