Financial order reforms set to boost unfairly treated former partners and families

The Government has agreed to improve the enforcement of financial orders, in response to a Law Commission report.

Courts can make these orders, which mean that one spouse or civil partner must pay money or transfer property to the other after a relationship breaks down.

But in 2016 a report by the Law Commission found that the law in this area was too complicated, sometimes ineffective, and that orders fairly awarded by the courts were not always complied with as a result.

Failure to recover money awarded can lead to significant hardship both for former spouses and their children.

Now in a letter to the Commission, Justice Minister Lucy Frazer has said the Government will bring forward non-legislative measures to improve the enforcement system, whilst considering further reform in the future.

Law Commissioner Professor Nick Hopkins said:

“If a court decides that a former partner or children are deserving of financial support, it’s not for a debtor to act or do otherwise.

“These reforms will help to prevent serious hardship that some face when debtors refuse to pay, and I’m pleased Government is taking action to help those most in need.”

The problem with enforcement of financial orders

Each year thousands of separating couples apply to the courts for financial orders. These are payments which a court decides partners must pay to one another, to support an ex-partner for example.

Sometimes these orders are not complied with. The law of enforcement of family financial orders is a complicated area, contained in a range of legislation and court rules.

It can then be difficult for parties, particularly individuals who do not have legal representation, to recover the money they are owed. There are four key problems with the current law in mind:

  • the complexity of the rules
  • a lack of information about the debtor
  • some of the debtor’s assets being beyond existing enforcement powers
  • a lack of means to apply pressure to debtors who can but will not pay

Government action now

Following calls for reform by the Law Commission, the Government has now agreed to explore amendments to the Family Procedure Rules 2010 and operational procedures to:

  • rationalise the rules on enforcement so that the law and procedure can all be found in one place and is easier to understand and use
  • make sure that the general enforcement application – which allows a creditor owed money to ask the court to enforce the order in the way it thinks best – is fit for purpose.
  • new guidance for litigants so they know how to go about enforcing their awards
  • amend or change the court forms so that debtors and creditors understand what is required of them, the financial information necessary for enforcement is provided by debtors and to let debtors know the consequences of lying
  • streamlining the system to cut down on unnecessary hearings where all are in agreement and save money for all involved

Further reform potential

Other reforms suggested by the Law Commission are still under consideration by the government. They include:

  • providing the court with wide powers to obtain information from third parties about a debtor’s assets
  • extending existing methods of enforcement to assets that currently cannot be enforced against, for example pension assets and joint bank accounts
  • that the courts should be able to apply pressure to debtors that have the means to pay but are refusing to pay – by disqualifying them from driving or preventing them from travelling out of the country

More information

The Enforcement of Family Financial Orders report was published on 15 December 2016.

Download the letter from Justice Minister Lucy Frazer.

Download the Law Commission’s reply.