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LiPs need protection for unpaid financial orders

LiPs need protection for unpaid financial orders


Enforcement of orders is often overlooked by judges and lawyers, says Law Commission

The rules on enforcement of family financial orders are ‘hard to follow’ – especially for litigants in person – and risk undermining the family justice system, the Law Commission has said.

Following a consultation, the independent body has recommended changes to make the ‘difficult’ and ‘often overlooked’ area of law ‘more effective, accessible, and fair’.

The Law Commission believes the ‘overly complex laws’ are compounded when the parties are LiPs. Cuts to legal aid have seen the number of unrepresented parties in the family courts soar with one in three cases taking place without legal representation of either party.

To ensure greater clarity, the commission highlighted four key problems with the current law that need to be addressed: the complexity of the existing rules; a lack of information about the debtor; some of the debtor’s assets being beyond existing powers; and a lack of means to apply pressure to debtors who can but will not pay.

To address the first of these issues, the commission wants increased obligations on the debtor to provide honest and early disclosure of their financial circumstances and for the court to be given the power to obtain information about the debtor from third parties including government departments, banks and building societies, and pension providers.

A further problem in the existing rules is that a number of assets are beyond the reach of the courts’ enforcement powers with debtors able to shield their assets and avoid enforcement action. The commission wants to extend existing methods of enforcement to funds that are deposited in a jointly held bank account and to make it easier to enforce against the income of self-employed debtors. It also called for enforcement against pension assets to be enabled.

The courts currently lack the power to apply sufficient pressure to debtors who have the means, but not the will, to pay. Although it is possible under a family financial order to send a debtor to prison for failure to pay monies owed, this is often inappropriate, and can be hard to achieve. The commission envisages that such debtors may be disqualified from driving or prevented from travelling out of the country until the debt is settled, where it is in the interests of justice to do so.

The report also made a number of recommendations concerning the allocation of enforcement cases, with a view to making the enforcement process generally more efficient. Greater judicial continuity between the judge who determines the original financial order and who then hears any subsequent application for enforcement was called for.

The commission also wants lay justices to have increased enforcement powers, and the appointment of an enforcement liaison judge. This, it said, will help to build expertise in enforcement and improve the management of proceedings.

In a further move to improve the efficiency of proceedings, the commission wants a revised procedure for general enforcement applications that will help litigants and save court time. To allow for greater fairness, it recommends extending the period of time for enforcing arrears without needing court permission.

Professor Nicholas Hopkins, Law Commissioner for property, family, and trust law said: ‘The current law for the enforcement of family financial orders is unnecessarily complicated and often ineffective. These problems cause real hardship for the individuals involved. Judges need the necessary powers to ensure that those who can pay, but choose not to, comply with court orders.’

Matthew Rogers is a legal reporter at Solicitors Journal | @lex_progress