With marriage rates in the UK falling steadily in recent years, there has in turn been a significant increase in the number of couples ‘cohabiting’. A couple are deemed to be ‘cohabiting’ for the purpose of the Family Law (Scotland) Act 2006 if they are living together as if they were husband and wife or if two persons of the same sex are living together as if they were civil partners.
The length of time the parties have lived together, the nature of their relationship and any financial arrangements between the parties during their relationship will be taken into account in determining whether a couple are ‘cohabitating’ and when either party makes a claim against the other under sections 26 to 29 of the 2006 Act.
The concept of cohabitation is important as cohabitants are afforded legal safeguards by the 2006 Act.
Section 28 of the Act provides a statutory footing for a former cohabitant to make a financial claim against their ex-partner if the relationship has ended otherwise than by death. When pursuing a claim of this nature, the Court has the ability to make an order requiring the other cohabitant (the Defender) to make payment of a capital sum and to make an interim order that they deem appropriate.
In considering whether to do so, the Court will assess the extent to which the Defender has derived economic advantage from contributions made by the Pursuer, as well as the extent to which the Pursuer has suffered economic disadvantage.
For example, if a cohabitant has utilised their funds to carry out renovations to their partner’s property during their relationship, and the title to the property is held in the sole name of their partner, upon separation their partner may have derived an economic advantage as a result of their contributions towards renovating the property as the value of the property will likely have increased as a result of their contributions. In turn, the cohabitant who made the financial contribution will have suffered an economic disadvantage.
If a former cohabitant is looking to make a claim under Section 28, it is crucial that the claim is made within one year of the day on which the parties ceased to cohabit and that the Court papers are also served on the Defender within this timeframe. This date may be abundantly clear from the circumstances of the separation, however, if it is in dispute, the Court will make a determination based on the evidence presented.
Recent case law has shown that the Courts have a lack of discretion to accept late applications. Although common law remedies under the law of unjustified enrichment may be available, this is a contentious area of the law.
The Scottish Law Commission released its Report on Cohabitation at the end of last year. In acknowledgement of the need to strengthen protections for the growing number of cohabitants, the Report recommends legislative changes to Section 28 including simplifying the test for making awards and increasing the number of orders available to the Court.
Mostly notably, the Report also recommends the introduction of a discretion for the Court to accept a late claim on special cause shown, provided that the claim is no more than one year late. A new two year deadline would therefore be absolute. Whether the Report’s recommendations are implemented remains to be seen.