What are Cohabitants in Scotland?
Under Scots law, cohabitants are defined as mixed sex or same sex couples, who are (or were) living together as if they were spouses or civil partners.
The Family Law (Scotland) Act 2006 provides cohabitants with limited rights to seek an order for financial provision on the breakdown of their relationship during lifetime, and in the event of death where the deceased has no Will in place. This area of the law is currently under review by the Scottish Law Commission.
The golden rule is that a cohabitation claim must be raised in court within one year of separating, or within six months if a claim is being made on death. If you do not raise a court action within the time limit, you have lost your right to pursue such a claim through the court.
The breakdown of a relationship or death of a loved one is an emotional time, and cohabitants’ rights are understandably often overlooked. Solicitors have pointed out that by the time these individuals come to them to seek advice, it is often too late to make a claim.
This is one of the main elements of the legislation which has been criticised and is now being considered for reform. It has been put forward that two years may be a more favourable time limit, when compared to other similar legal protections around the world. Another idea being explored is if extension of the time limit should be possible by agreement between the parties, to allow and promote negotiations to take place, without the threat of imminent court proceedings being raised.
Financial provision for cohabitants on death
A cohabitant can make a claim through the court on the death of their partner, if the deceased has no Will in place. The court may grant a financial award and/or transfer property to the surviving cohabitant from the deceased’s estate. To pursue such a claim, you must be cohabiting with your partner at the time of their death, and as discussed above, a claim must be raised in court within 6 months of the date of death. Claims of this nature are rare, and there is little to no reported case law available. It is therefore difficult to assess likely outcomes, however, the maximum financial award available to a surviving cohabitant is that which a spouse would be entitled to under the law in Scotland.
Financial provision for cohabitants during lifetime
On separation, a cohabitant can make a claim through the court for a capital payment to be made to them by their ex-partner, if they can demonstrate to the court that they have suffered economic disadvantage in the interest of their ex-partner or a relevant child.
In considering such claims, the court will look at whether contributions made by the applicant have resulted in the defending cohabitant deriving an economic advantage.
The court will also carry out an offsetting exercise, considering any economic advantage the applicant has benefitted from as a result of contributions made by their ex-partner.
The court will review the financial position of the parties at the beginning and end of their cohabitation, and seek to rectify imbalances.
The court has wide discretion when considering the level of financial award (if any) to be made.
Further, contributions by the applicant do not necessarily need to be economic in nature.
This makes these types of claims very difficult to quantify.
The cost of pursuing such a claim through the court will need to be balanced against prospects of success and likely financial award.
It is very difficult for solicitors to assess and advise their clients of this under the current legislative framework.
Although Scotland is not in favour of having mirroring regimes for financial provision for spouses/civil partners and cohabitants, inspiration was drawn from the law on divorce in Scotland in that a fair and reasonable test would be applied when the court had a financial claim before it involving cohabitants. Even though courts have ruled the guiding principle is fairness, this was not included in the legislation, and with the courts having such wide discretion in these matters, the purpose of the legislation and test to be applied by the courts remains unclear.
There has been much discussion as to how this area of the law could be improved and clarified. The consultation period has now taken place but we are still to see what changes are to be made. Only time will tell if progression will be made in this area of law, which has been subject to scrutiny over many years.
Cohabitation Agreements in Scotland
Entering into a Cohabitation Agreement may not be romantic but they can dispel fears and remove uncertainty, which may otherwise cause difficulties in a relationship.
Our Family Law Team is experienced in the preparation of Cohabitation Agreements, which are tailored to meet the needs of the individual client.