What does the new ‘no-fault’ divorce law mean for your finances

On 6th April, the Divorce, Dissolution and Separation Act 2020 came into effect, signalling the first reformation of divorce legislation since 1969. The biggest advantage of this long-awaited change is the introduction of the ‘no blame’ divorce, making it possible for couples to obtain a divorce on a more amicable footing. But what will be the financial implications of the new laws? We have compiled a brief overview of the main points, but recommend seeking out professional advice for more in-depth information.

Time is money

One of the biggest positive changes in the new legislation is that it will save time and potentially money. This should encourage couples to stay as amicable as possible when resolving financial issues. It will also mean that applications for divorce will be easier, with no need to provide grounds for dissolving the marriage. This reduction in time should realise savings on legal representation, however, it is still a good idea to engage the services of a reputable solicitor to ensure that you are getting a fair settlement.

Getting rid of the ‘Blame Game’

The animosity between estranged couples throughout the divorce process can be emotionally and financially costly. The ‘no fault’ divorce seeks to alleviate some of that by removing the need to attribute blame when applying for a divorce. This option was previously attractive to those who were seeking to end a marriage without having to wait for two years, on top of the approximate six months that the process itself then takes. Legal professionals have argued that this condition has contributed to the further souring of the relationship and can be obstructive in developing an agreed financial outcome.

Simplification

The previous system for divorce proceedings meant that at least one party had to establish either adultery, desertion or unreasonable behaviour as a reason. In the absence of this, a separation period of two years applied. In the event that one of the parties did not agree to the divorce, the separation period had to be five years. 

Under the new legislation, irretrievable breakdown will still be the only grounds for divorce, however, one party will no longer be able to contest the divorce. Also, instead of having to cite unreasonable behaviour or one of the other options, you will simply have to provide a statement of irretrievable breakdown. Once accepted, the two stages of the current process (decree nisi and decree absolute) will continue in the same way as before, taking around six months.

Financial impact

There will be no reduction in the fee payable for a divorce, which currently stands at £593. The Act also makes no attempt to simplify or clarify the area of asset division either, although there has been moves for reform. The current regime, where there is no fixed formula for splitting assets, gives judges a great deal of discretion, which can make it difficult to know what shape a final court order might take. Suggestions by Baroness Deech within her Divorce (Financial Provision) Bill include having a 50/50 split as a legally fixed starting point for the division of assets acquired during the marriage. Courts could then consider a number of pertinent factors such as the needs of any children.

In conclusion

It is estimated that around half of divorcing couples would have made use of a ‘no fault divorce had it been an option for them at the time, and over a quarter believe that it would have made the process less acrimonious. It stands to reason that the new simpler, and speedier divorce process will have a beneficial impact on the cost of obtaining a divorce, but it doesn’t go as far as simplifying the financial settlement system, which may take a while longer.