Cohabiting Couples - financial provision on separation

Up until Section 28 of the Family Law (Scotland) Act 2006 was enacted there was no proper framework in place to allow separating cohabiting couples to resort to court to determine who should receive what financial provision.

Cohabiting couples in Scotland are people who live together as a couple but who are neither married nor in a civil partnership.

How are assets and liabilities built up?

If a cohabiting couple have lived together for a time, it’s very likely they’ll have built up assets and liabilities. Over the course of the relationship, one or other or both of them may have worked, they may have purchased or sold houses and they may have children. As with any relationship, what goes on between the couple is unique to them. That means should they separate, just as with a traditional marriage or civil partnership separation, there are usually a lot of things to sort out – not least the financial provision issues between the parties.

How are assets and liabilities dealt with on separation?

As with marriage and civil partnerships, the basic proposition is that assets and liabilities should be divided equally between the parties. In theory, that might sound fine, but the reality is almost always very different. One party may want more than the other whilst the other party naturally wishes to resist this.
This is where the provisions of Section 28 come in. This section contains the framework for a fair division of assets – and that division might not be an equal split.
The one-year rule

Before we get into the detail, it’s very important to be aware of the “one-year rule”. When the parties can’t reach agreement on financial provision, court proceedings must be raised by one against the other within one year of the parties ending their cohabitation. If the parties have tried mediation to resolve the financial provision and it hasn’t worked and more than a year has passed since the cohabitation ceased, then the time allowed to claim is 8 weeks after the mediation broke down.

What do the courts take into account?

As you might expect when one of the parties is seeking an uneven division of property and assets in their favour, they’ll need to satisfy the courts that they’re entitled to that higher share. They have to not only show that the other party gained economic advantage from their contribution. They may also have to show that they’ve been economically disadvantaged in the interests of the other party or any child or children of their relationship.
There aren’t any hard and fast rules about who should get what or what percentages the splits should be. A sheriff will decide what he or she views as being fair and reasonable given the circumstances and having heard arguments from each of the parties.

If you would like to hear what the courts have to say about this, the leading case in this area is the Supreme Court case of Gow v Grant from 2012. You can read that case here. There’s also been a recent Sheriff Appeal Court case - Duthie v Findlay. Again, this case considered the claim by one party against the other for an uneven division of the assets and property. 

How are these things best resolved?

We believe that disputes such as this are best resolved through discussion and negotiation. Court, we believe, is almost always a last resort. Cohabiting couples who have separated should consider negotiating a settlement or, perhaps, mediation in an effort to resolve their differences. If they do end up in court, the parties need to be aware that they might not always get what they’re looking for.

If you want to know about your entitlements or what action you can take, please get in touch.