Following a proposal from the Family Law Bar Association to look into this, the Law Commission has investigated why people don’t comply with financial orders and how it can be improved.  The Commission conservatively estimates that £15 – 20 million goes unpaid each year – and that only relates to those who have taken enforcement action.

Ex spouses suffer when divorcees don’t pay up 

Many people think that once a financial settlement has been agreed, that is the end of the matter, and that its terms are implemented, but there are times when this is not the case and some people simply don’t pay up, or don’t transfer property that they have been ordered to transfer.  The Commission says that, without an effective way of enforcing orders, they become meaningless and the person in whose favour the order is made, as well as their own children, suffer, not only financially but emotionally with the additional burden in having to take steps for enforcement.

Of course there are those who ‘can’t pay’ – and the law accounts for that with the ability to include extra provisions in the order i.e. an ‘either or’ to include sale of the property or to apply for the order to be varied by agreement.  The Commission’s new proposals, however, relate to those people who simply ‘won’t pay’.

Existing rules ‘complicated’

The Law Society has described the law relating to the enforcement of orders as “so complicated that it may well deter creditors from taking action to obtain payment”– indeed even the courts and solicitors find the orders difficult in some circumstances.  So, when it comes to litigants in person, with no legal representation, seeking to enforce an order, it is understandable that they often get nowhere.

Law Commission recommendations

Although the Law Commission’s report is wide ranging, its recommendations deal mainly with the four following issues:

• Complex current rules.
• Not enough information about the debtor on which creditors and courts can identify the most effective enforcement options.
• When some of debtor’s assets that could be used to comply with the order may be beyond existing enforcement powers.
• Insufficient means to coerce debtors who “won’t pay” to comply with court orders.

To counteract these inefficiencies, the Law Commissions suggests:

• Improving the process and management of enforcement cases, including changing the culture so that judges and legal representatives should think ahead and consider whether enforcement terms could be included in any financial order.
• As lack of information can be a barrier to enforcement, judges should prepare a summary of their findings in relation to the debtor’s assets.
• Appointing enforcement liaison judges to each family judge area to build expertise in their area, provide training, improve management of proceedings, be a point of contact for other judges and hear complex enforcement cases.
• Simplifying the enforcement application: helping creditors to ensure applications are correct and saving court time.
• Providing a standalone set of rules within the Family Procedure Rules that cover enforcement so that creditors don’t have to comply with elements of the Civil Procedure Rules too (as is currently the case).
• Requiring the debtor to make financial disclosure before the first hearing so that the creditor and court can consider appropriate enforcement methods.
• Widen the scope of the general enforcement application to give the court greater enforcement powers – including disqualifying the debtor from driving, stopping him or her from travelling abroad and making orders against a pension.
• Offering better guidance to litigants in person with a new Enforcement Practice Direction.

Nicola Cancellara, divorce solicitor

Currently, an unpaid divorcee can take their ex-spouse to court and a judge can pass a jail sentence, although that is rarely enforced as a criminal standard of proof is needed.  Driving licences can be taken away from people who refuse to pay child maintenance – but that is about it.  It is practically impossible to get hold of assets that are held outside the country or in a joint bank account with someone else.  So those who simply won’t pay often get away with it.

It is expected that the next government will consider the proposals and decide whether they should form the basis of new legislation.  We will report when further information is available.

You can find out more about divorce and finances on our web pages.