Civil partnerships

A civil partnership is a legal relationship recognised under the law of several jurisdictions, including England and Wales

A civil partnership grants couples rights and responsibilities similar to those of marriage. Civil partnerships were introduced in the UK by the Civil Partnership Act 2004. They into effect on 5 December 2005 and were originally designed to provide same-sex couples with a way to gain legal recognition for their relationships, along with the associated legal protections, benefits, and obligations that marriage offers.

However, following a landmark Supreme Court ruling in 2018, civil partnerships were extended to include opposite-sex couples in England and Wales as of 31 December 2019.

Civil partnership dissolution

Civil partnerships, akin to marriages, provide a legally recognised relationship between two individuals. When these partnerships come to an end, just like in divorces, financial settlements are a critical aspect of the dissolution process.

This settlement process is designed to ensure a fair and equitable distribution of the partnership’s financial assets and responsibilities. The legal framework in England and Wales offers a structured approach to resolving these financial matters. It aims to minimise conflicts and provide clarity for both parties moving forward.

The dissolution of a civil partnership and the subsequent financial settlement are governed by the Civil Partnership Act 2004 and the Matrimonial Causes Act 1973, as amended. These laws provide the courts with the authority to make orders regarding the division of assets, maintenance payments, and pension sharing. The primary objective in a civil partnership dissolution financial settlement is to achieve fairness and to consider the welfare of any children involved.

Civil partnership dissolution financial settlement: Initiating the process

The dissolution process begins with an application to the court, detailing the grounds for the dissolution. Once the dissolution is underway, either party can apply for a financial order. This application triggers the financial settlement process. This can be resolved either through mutual agreement between the parties or, failing that, by a court decision.

Key considerations in financial settlements

Needs of both parties:

The court primarily looks at the needs of both individuals. This includes their income, earning capacity, property, and other financial resources both currently and in the foreseeable future.

Standard of living:

The standard of living enjoyed by the civil partners during the partnership is considered. The court often aims to ensure that neither party experiences a drastic change in their standard of living post-dissolution.

Welfare of children:

The needs of any children of the family are paramount. This includes their financial needs, education, and overall wellbeing.

Duration of the partnership:

The length of the relationship can influence the financial settlement, with longer partnerships potentially leading to more significant financial support obligations.

Contributions:

Contributions made by each partner, both financial and non-financial (such as homemaking or parenting), are taken into account.

Assets subject to division

Property and real estate:

This includes the family home and any other real estate owned by the partners, either jointly or individually.

Savings and investments:

Any savings, investments, and other financial assets accumulated before or during the partnership.

Pensions:

Pension sharing is a critical aspect of financial settlements. The value of both partners’ pensions is assessed. A portion may be transferred from one partner’s pension scheme to the other’s to equalise their pension incomes in retirement.

Debts:

Joint and individual debts are considered within a civil partnership dissolution financial settlement. Responsibility for these debts may be allocated as part of the settlement.

The settlement process

Disclosure:

Full and frank financial disclosure by both parties is a prerequisite. This ensures that all assets are known and can be fairly divided.

Negotiation:

Many couples prefer to reach an amicable agreement through negotiation, mediation, or collaborative law, avoiding the need for a court trial. This can be less adversarial and more cost-effective.

Court Proceedings:

If the parties cannot reach an agreement, the financial dispute will proceed to court. A judge will make a final decision based on the evidence and legal arguments presented.

Consent Order:

Once an agreement is reached, either through negotiations or court decision, it is formalised in a court order. This is legally binding once approved by the court.

Challenges and Complications

The process of reaching a civil partnership dissolution financial settlement can be complicated by various factors. These may include the concealment of assets, disputes over the valuation of assets, and disagreements over the needs and contributions of each party. Legal advice from a family lawyer and financial experts is often essential in navigating these complexities.

Civil partnership dissolution financial settlement: FAQs

Are inherited assets or gifts considered in the settlement?

Inherited assets or gifts can be considered, but their treatment varies. Generally, if these assets have been kept separate, they may not be divided in the same way as jointly accrued assets. However, if they have been integrated into the family’s finances or significantly improved the couple’s standard of living, they might be included in the asset pool.

What role do prenuptial agreements or pre-civil partnership agreements play in financial settlements?

While not legally binding in the same way as in some other jurisdictions, such agreements can influence the court’s decisions. If deemed fair and both parties entered into the agreement freely and with full understanding, the court may uphold the terms of these agreements.

What is a separation agreement, and how does it impact the financial settlement in a civil partnership dissolution?

A separation agreement is a legally binding contract between partners who have decided to live apart but are not yet divorced or have not dissolved their civil partnership. This agreement outlines how the partners will manage financial arrangements, asset division, and child care (if applicable) during their separation. It can cover elements such as maintenance payments, the division of property and debts, and arrangements for any children.

How can ARC Costs assist?

If you require assistance with financial remedies following a civil partnership dissolution, ARC Costs can introduce you to a family law solicitor from our network.

Our team of highly skilled Law Costs Draftsmen and Costs Lawyers can however, assist legal representatives in recovering their legal aid fees, or in securing inter-partes costs after any such order has been made. 

Our team regularly assists in all types of costs claims, including divorce legal costs disputes. Our client base ranging from law firms to Litigants in Person, both privately funded and funded by the Legal Aid Agency. In inter-partes disputes, we can assist both paying parties and receiving parties.

If a divorce Costs Order had been made in your favour, we can assist you in recovering the costs owed to you. Equally, if a Costs Order has been made against you, we can assist in disputing legal costs and minimising your costs liability.

We can further assist in recovering costs from the Legal Aid Agency in privately funded cases. Using our expert costing service, we help clients maximise their recovered legal costs whilst providing expert legal advice and minimising the risk of rejected claims from the Legal Aid Agency, to ensure you maintain your KPIs.

We regularly use the CCMS system to submit legal aid costs claims and deal with all the administration on behalf of our clients and to free up the time of fee earners, thereby ensuring you can recover your maximum legal aid fees in an expeditious and efficient manner.

To find out more about how we can provide you with assistance, please contact us at 01204 397302 or email our team of experts at info@arccosts.co.uk. Alternatively, please use our free chat facility to speak to an expert directly.

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