Courts, Cohabitation and Confusion

10/11/2011 12:45 GMT | Updated 23/01/2014 23:58 GMT

The changing face of British family life has meant that, sadly, break-up is a common occurrence.

Whether couples are married or not, they frequently involve legal proceedings to tie up the loose ends of relationships - dividing what joint assets which might have been built up during a marriage, for instance, and providing for the future of any children involved.

Few such cases, though, are heralded as having the potential to impact on far more individuals than those directly involved. However, this week's Supreme Court ruling on the financial terms by which a former ice cream salesman and his hairdresser partner separated may have changed this.

In 2008, Leonard Kernott demanded a 50% share in the home he had shared with Patricia Jones and their two children before they broke up. Even though both their names were on the deeds of the Essex bungalow where they lived, he had made no contribution to the mortgage or household bills in the intervening years.

Ms Jones initially succeeded in rebutting his claim but the Court of Appeal last year decided in his favour, paving the way for five judges in the Supreme Court - the highest in the land - to consider the matter.

The result of their deliberations was not only eagerly anticipated by the legal profession but by many cohabiting couples up and down the country, conscious that the judgement could potentially have a bearing on their own domestic arrangements.

Ultimately, though, it left the situations of people in unmarried, live-in relationships no further forward or clear-cut. If anything, the manner in which Ms Jones won out - reinstating the 10% award which a County Court decided her former partner should be entitled to - illustrated the legal uncertainty which surrounds cohabitation.

All the Supreme Court justices who took part in the case agreed that their conclusion was correct but differed on the legal reasoning by which they arrived at their decision. Arguably the most important theme which came out of the judgement was that it was the duty of the courts to interpret the intentions of Mr Kernott and Ms Jones both during and after their relationship.

Such confusion is perhaps understandable given the absence of legislation enshrining the rights of unmarried couples. Only last month, the Justice Minister, Jonathan Djanogly, rejected recommendations from the Law Commission dating back to 2007 that there be such a law.

Without such a specific piece of statute, courts required to mediate on the break-up of unmarried couples have to apply property law to fit a family scenario. It makes for unpredictable outcomes.

I and my colleagues at Pannone last year reported on how some individuals were seeking to take advantage of the situation by making so-called 'nuisance payment' claims. In such action, they might argue that even though their names do not appear on property deeds, they made some contribution which gives them a 'beneficial interest' in the value of the home a couple might have shared together.

They understand that former partners might be intimidated by the prospect, uncertainty and cost of legal action which may take up to 18 months, and pay up quickly to put an end to the dispute.

We tracked a 40% increase in such cases over five years and saw individuals frequently willing to pay tens of thousands of pounds to bring such claims to a close.

The possibility of such claims and the necessity for Leonard Kernott and Patricia Jones to spend what, under normal circumstances, might have been six figures on legal fees to navigate their complaint through four separate courts could be overcome relatively simply, even if Government doesn't revisit the idea of a law for unmarried couples.

Cohabitation agreements were in place before the recent ruling. Recording your intentions and those of your partner might seem unromantic, just as prenuptial agreement might seem cold and contractual to some. However, they have the potential to assist the often unpleasant picking apart of a relationship that can inflame already raw emotions.

Reinforcing such a document with a Deed of Trust, if property is involved, and updating both if circumstances change is a practical way to save individuals many thousands of pounds. It would also allow them to get one with their lives in a way which Mr Kernott and Ms Jones can only begin to do now, almost 20 years after they thought they had gone their separate ways.

Given that the end of their dispute provides no binding solution for others in a similar position and the likelihood that the recession may fuel more 'nuisance payment' claims, it is advice worth perhaps considering.