Law Commission issues report on enforcement of family financial orders

Family analysis: The Law Commission has issued a report recommending wide-ranging reform of the law of enforcement of family financial orders with the aim of making this area of law more effective, efficient and accessible, and to strike a fairer balance between the interests of both parties. The recommendations include consolidation of the rules regarding enforcement, the introduction of a new Practice Direction, guidance for litigants in person, and the extension of existing methods of enforcement.

Original news

Enforcement of Family Financial Orders (Law Com 370)

What is the background to the report?

The project was recommended to the Law Commission by the Family Law Bar Association in 2010 in its response to the consultation on the Law Commission’s 11th Programme of Law Reform. The start of the project was delayed until the completion of the project on Matrimonial Property, Needs and Agreements, and work began on the enforcement project in April 2014. The consultation paper was published in March 2015 and the consultation closed in July 2015 (see here). The report setting out the Law Commission's recommendations was issued on 15 December 2016.

The Law Commission's recommendations seek to address four key problems:

  • the complexity of the rules regrading the enforcement of financial orders
  • lack of information about debtors
  • cases where some of the debtor’s assets are beyond existing enforcement powers, and
  • the lack of means to apply pressure to debtors who can, but will not, pay

The Law Commission states that non-compliance with family financial orders is a significant problem, and estimates that on average there are 4,200 enforcement cases in relation to family financial orders each year. Although data on the total amount of money that goes unpaid each year through non-compliance with family financial orders is not routinely collected, the Law Commission estimates that it is approximately £15 - 20m. Further, that those figures are likely to be an underestimate as they do not account for individuals who are not receiving what they are owed under a family financial order, but who may not take action due to:

  • a lack of understanding of the system
  • a feeling that they need legal representation that they cannot afford
  • concerns about their relationship with the debtor, or
  • simply a lack of faith that action will achieve compliance

The Law Commission suggests that the lack of an effective system for enforcing family financial orders impacts most directly on the debtor and their dependents, but also affects the State, the courts, the family justice system and society as a whole.

What are the Law Commission's recommendations?

Key recommendations are in summary:

  • to simplify the law and provide a more accessible route to recovery, and that the procedural rules that apply to the enforcement of family orders (which can be hard to find and difficult to follow) are consolidated
  • that more guidance and information is provided for litigants
  • that the obligations on the debtor to provide honest and early disclosure of their financial circumstances are increased, to improve the likelihood that enforcement proceedings will result in recovery, and that the courts have wider powers to obtain information from third parties
  • in order to make it harder for the debtor to avoid enforcement action by shielding their assets, that existing methods of enforcement are extended to assets that currently cannot be enforced against, for example, against funds held in a joint account or pension assets
  • that the courts should be able to apply pressure to debtors who have the means to pay but refuse to pay what is owed to the creditor—the project recommends that such debtors may be disqualified from driving, or prevented from travelling out of the country until the judgment debt is settled, where it is in the interests of justice to do so, and
  • other miscellaneous recommendations including changes to how enforcement cases are allocated, an increase to the period of time to enforce arrears before the court’s permission is required, and the introduction of a new power for courts to remit arrears

In addition the Law Commission has recommended a new and more efficient procedure for the general enforcement application, which is often used by litigants in person (see pages 43-63 of the report). A general enforcement application is made under the Family Procedure Rules 2010 (FPR 2010), SI 2010/2955, 33.3(2)(b) and involves applying to the court for 'an order for such method of enforcement as the court may consider appropriate'. The Law Commission's recommendations in this regard include:

  • the consolidation of the procedural rules so that the rules dealing with enforcement are comprehensively stated in FPR 2010: the current enforcement regime for family financial orders is found across legislation in a number of Acts and in both the FPR 2010 and the Civil Procedure Rules 1998—the need to consult different sets of procedure rules in enforcement proceedings has been widely criticised by both judges and practitioners, and the relationship between the two sets of rules is not always clear and is especially difficult for a litigant in person to understand
  • the creation of a new enforcement Practice Direction that provides a narrative statement of the procedure for bringing an enforcement application so that it provides a 'route map' for enforcement proceedings— the Law Commission believes that this approach will be particularly helpful for litigants in person who might otherwise be intimidated by the FPR 2010
  • better guidance for litigants in person, as the difficulty of navigating the rules faced by a litigant in person is exacerbated by an absence of authoritative explanatory information and guidance, and
  • the provision of information on methods of enforcement at the time the family financial order is made

Few practitioners will not welcome these recommendations. The myriad of legislation and rules that apply to the enforcement of financial orders is challenging for experienced family lawyers, never mind litigants in person.  A more effective system and consolidated rules are to be welcomed, but it remains to be seen how long this will take to be put in place.

Geraldine Morris is a solicitor and Head of LexisPSL Family.

Twitter: @GeraldineMorris

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

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