Select Committee on Social Security Fifth Report


Letter to the Clerk of the Committee from Mr Nicholas Mostyn QC (PS 4)

  Thank you for your letter of 11 February 1998 inviting me to comment on the provisions of the Welfare Reform and Pensions Bill.


  1. I continue to fail to see why the introduction of this important addition to the court's existing powers should have to wait until the bringing into force of the Family Law Act. The grounds for divorce are not connected to this issue, and the powers are needed now.

  2. I see that the definition of a "pension sharing order" has altered from that in the original draft Bill. I do not know why this is.

  3. I see that for Scotland a pension sharing order is now to be either a percentage or a fixed amount. No such enlargement has been made for England and Wales. I can envisage some cases here where it would be useful to be able to specify an amount rather than a percentage. The enlarged power should be available on both sides of the border.

  4. My experience of ear-marking is that extensive and expensive arguments can arise as to the precise wording of the order. The same will apply a fortiori to pension sharing orders unless the legislation stipulates that the order is to be in a prescribed form. This is very important if costs are to be limited.

  5. There ought to be provisions, in the interests of the parties as well as the members of a pension fund, for the legal costs of the pension fund which is to be the subject of pension sharing to be strictly limited and controlled. Your recommendation 50, and Clause 33, seem to address only the charges incurred in providing values and effecting shares, rather than the costs of the fund in being involved in the litigation process.

  6. The new s40A Matrimonial Causes Act 1973 (page 72 of the Bill)[56] is hopelessly convoluted. It should simply provide that no pension sharing order should take effect until the time for appeal has expired.

  7. I am alarmed by the Government's Paragraph 17 in its response to the Committee's report.[57] This seems to suggest that the weight to be given to a wife's retirement income is of equal weight to the interest's of the children of the family. I do not think that this is reflected in the Bill, but I would want to be reassured that the Government recognises that the interests of children is and remains the first consideration.

  8. As to the improvement to ear-marking in Schedule 4 I would mention a surprising experience I recently underwent. When representing a wife I negotiated a settlement whereby the wife and the children of the family secured a proportion of the husband's death in service benefit. My opponent and I were then surprised to discover that there is no power in ss 25C and D Matrimonial Causes Act 1973 to make ear-marking orders in favour of children! This is absurd. The words "to a child of a family" should therefore be added after the word "party" in s25B(4), 25C(1), 25C(2)(a), 25C(2)(b) and 25C(2)(c) Matrimonial Causes Act 1973.

  In my original note[58] I noted that it was intended that s25(2) should apply untrammelled to the discretion to make pension sharing orders, and stated:

    "This may lead to the wholesale making of such orders in circumstances where the redistribution of the realisable capital might be more appropriate and simple. I wonder if it might not be wise to express in s25(2) by addition somewhere the desirability of making provision in the first instance from the realisable capital, and only insofar as that does achieve a just result exercising the pension sharing powers."

  I remain of this view.

25 February 1999

56   Para 9 of Schedule 3 to the Bill. Back

57   HC 146. Back

58   Memorandum placed in House of Commons Library and made available for public inspection in House of Lords Record Office (see HC 869 page li). Back

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