Law Commission insight on the enforcement of family financial orders

Family Analysis: Professor Elizabeth Cooke and Spencer Clarke introduce the Law Commission’s project on the enforcement of family financial orders and ask for responses to the consultation paper.

Original news

The Law Commission has opened a consultation on the enforcement of family financial orders and aims to publish a report with recommendations to the government within 18 months to two years from the close of the consultation in July 2015. The Commission has invited responses to the questions and proposals contained in the paper, which can be downloaded here.

What is the project about?

We explore how the enforcement of family financial orders might be improved, from the perspective of both the creditor and the debtor. We are not, in this project, concerned with the basis for such orders, so the question is ‘How do I get my money?’ rather than ‘What should my ex pay?’ The project covers the enforcement of all court orders that make financial provision for former spouses or partners and children, for example, periodical payment orders, orders for a lump sum and orders that transfer property, such as the matrimonial home. Typically, these orders will be made under the Matrimonial Causes Act 1973, the Civil Partnership Act 2004 and Schedule 1 to the Children Act 1989. The enforcement of child support payable under an assessment by the Child Maintenance Service falls outside the scope of the project.

Why is reform needed?

The law in this area has been criticised by lawyers and the public for being ineffective and difficult to use or understand. We focus on the enforcement of family financial orders, as distinct from civil orders generally, both because such orders will usually be made under the separate jurisdiction of the family court and because we think that family enforcement raises different issues. The non-payment of family financial orders, so often relied on to meet living expenses and housing needs, can cause particular hardship and the nature of such orders means that the debtor’s liability can change over time. The family creditor may also know more about the debtor’s finances than other creditors but, in contrast to most other civil proceedings, the parties’ emotions are likely to have greater significance and effect.

What are the key themes of the consultation paper?

We make proposals that are designed to empower creditors by improving existing methods of enforcement, such as third party debt orders and attachment of earnings orders. We also seek to increase the pressure that can be brought to bear on debtors who do not pay despite having the means to do so, by proposing a range of coercive orders; in doing so we have been very conscious of the need to make a distinction between these debtors and those who cannot afford to pay. The paper therefore addresses how information about the debtor’s financial situation could be more effectively and easily obtained. We also make proposals for improving and making more accessible information and advice about family enforcement for both parties, and for the public.

How do we propose to improve enforcement methods?

There is not the space here to set out in full our proposals, instead we highlight certain key proposals while encouraging readers to take a look at our consultation paper or its executive summary.

  • We propose that powers for information requests and orders already on the statute book, in the Tribunals, Courts and Enforcement Act 2007 (TCEA 2007), be brought into force for family proceedings. Such orders would allow the court to obtain information from both government departments and HM Revenue & Customs (HMRC) (information requests) and third parties, such as banks and financial institutions (information orders) to facilitate enforcement by the creditor of their order. Similarly, we ask whether the provision in TCEA 2007 for the tracking of debtors’ current employment, by requesting details from HMRC, should also be brought into force. Tracking could avoid the failure of attachment of earnings orders when the debtor changes employment. We also ask whether the information gleaned from information requests and orders, or the tracking of employment, should be seen only by the court or disclosed to the creditor.
  • We suggest that debtors be required to file a financial statement, setting out their assets and income, when faced with enforcement proceedings.
  • We propose, in line with previous government thinking, that the current two-stage procedure for both charging orders and third party debt orders be simplified in appropriate cases. We ask whether the scope of third party debt orders might be enlarged so that they can apply periodically, or to joint accounts, and whether the making of such an order should trigger the disclosure of the debtor’s bank statements. We also consider whether the family court’s powers to make orders against pensions should be additionally available for the purpose of enforcement and whether it should be easier for the creditor to pursue older arrears of family financial orders.

What happens when the usual methods don’t work?

We then turn to what we call ‘coercive’ orders against the debtor. Rather than aiming to recover money from a debtor’s assets directly, in the way that, say, a third party debt order might be used to access sums held in a debtor’s bank account, these orders seek to being pressure to bear on the debtor, encouraging him or her to pay. The judgment summons procedure supplies pressure by the threat of imprisonment for the debtor who refuses or neglects to pay despite having the means to do so. However, family lawyers, following the Court of Appeal case of Mubarak v Mubarak [2000] All ER (D) 2302, often take the view that this procedure, in its reformed and human rights compliant form, is too difficult to use effectively.

We have therefore considered what other coercive methods might be used against debtors who will not pay. Such methods should not be used against the debtor who does not have the means to pay: to do so would be punishing that debtor rather than encouraging compliance. We propose that the court should be able to disqualify a debtor from driving or foreign travel, for up to 12 months, or to impose a curfew order on him or her, for up to six months. The court would have the power to make such orders where it is satisfied, on the balance of probabilities, that the debtor has the ability to pay and has not done so and where it believes that to make the order would be in the interests of justice. In deciding whether to make the order, we suggest that the court be directed to take account of all the circumstances of the case including the degree of the debtor’s non-compliance with the financial order and what other methods are available and might work. It should also bear in mind the effect of making a disqualification or curfew order on the debtor’s ability to earn a living, and on their dependants.

What else might help?

We have been told that both lawyers and litigants in person can find it hard to navigate the current family enforcement system. In response we discuss whether there is a need for the consolidation of the enforcement legislation and court rules, and enquire if the need to refer both to the Family Procedure Rules 2010 and the Civil Procedure Rules 1998 causes problems. We also ask whether the court’s existing case management powers are sufficient and could be used more effectively. We have been told that more could be done by the courts at the time of the original financial order being made to prevent enforcement proceedings becoming necessary or, should they happen, to make them easier. We discuss a possible procedural reform to provide judges with greater power to encourage the parties in enforcement proceedings to make use of alternative dispute resolution.

Professor Elizabeth Cooke is the commissioner with responsibility for property, family and trust law at the Law Commission and Spencer Clarke is a lawyer in the property, family and trust law team.

Interviewed by Geraldine Morris, solicitor and head of the LexisPSL Family team.

The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.

This News Analysis was first published in LexisPSL Family. Click here for a free one week trial.

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