Scottish cohabitation ruling has “lessons” for England and Wales, Lady Hale says

A ruling this morning by the UK Supreme Court in a Scottish cohabitation case has lessons for the way the law should be reformed in England and Wales, Lady Hale has said.

Under Section 28 of the Family Law (Scotland) Act 2006, cohabitants in Scotland can apply to the court for financial provision when the cohabitation has ended otherwise than by death.

Giving the leading judgment this morning in Gow v Grant [2012] UKSC 29, the Supreme Court unanimously allowed an appeal by a 64 year-old woman, Mrs Gow, who moved in with Mr Grant, a 58 year-old man she met at a singles’ club.

They lived together in his house for just over five years. Six months into their cohabitation, Gow sold her flat in Edinburgh for £50,000, and the proceeds were used partly for their living expenses.

Lord Hope, who gave the leading judgment, said that by the time the flat was sold in 2009, it was worth a further £38,000. The sheriff awarded Gow £38,000 plus £1,500 she had spent on a timeshare.

Mr Grant appealed against the sheriff’s decision to the Inner House of the Court of Session, which allowed Grant’s appeal and rejected his former partner’s application for a capital payment.

The UK Supreme Court, made of Lord Hope, Lady Hale and Lords Wilson, Reed and Carnwath, unanimously allowed her appeal and reinstated the ruling awarding Gow £39,500.

In an additional, concurring judgment, Lady Hale said there were “lessons to be learned” from the Scottish case in England and Wales.

She said the first lesson was that there was a need for “some such remedy” as that provided by Scottish law and she supported calls by Law Commissioner Professor Elizabeth Cooke that reform should not be delayed before the “early days” of the next parliament.

“The second lesson is that reform needs to cater for a wide variety of cohabiting relationships which may result in advantage or, more commonly, disadvantage to one of the parties,” Lady Hale said.

“There is a tendency to concentrate upon the younger couples who have children, where one of them suffers financial disadvantage as a result of having to look after the children both during and after the relationship.

“It may be very difficult to say that the other party has derived any economic advantage from those sacrifices, but it is entirely fair that he should compensate the children’s carer for the disadvantages that she has suffered.”

Lady Hale went on: “This case was an example of such disadvantages arising in a completely different context, but one which is by no means uncommon these days: a mature couple, both of whom have been married before, each of whom has a home and an income from pensions or employment, but where one of them gives up her home and at least some of her income as a result of their living together.

“At the end of the relationship, one of them may be markedly less well off than she was at the beginning, whereas the other may be in much the same position as he was before or even somewhat better off. Such cases should not be forgotten in any scenario-testing of proposed reforms.”

Lady Hale said a third lesson from Scotland was that the lack of any definition of cohabitation, or a qualifying period of cohabitation for couples who do not have children, had not proved a problem.

She said the fourth lesson was that the “compensation principle”, although attractive in theory, could be very difficult to apply in practice because of the problems of identifying and valuing advantages and disadvantages.

Lady Hale concluded by saying that the flexibility of the Scottish law was preferable to the Law Commission’s proposals that losses should be shared, while the Commission’s list of factors to be taken into account could be a “useful addition” to Scottish law.

“The main lesson from this case, as also from the research so far, is that a remedy such as this is both practicable and fair. It does not impose upon unmarried couples the responsibilities of marriage but redresses the gains and losses flowing from their relationship.

“As the researchers comment, ‘The Act has undoubtedly achieved a lot for Scottish cohabitants and their children’. English and Welsh cohabitants and their children deserve no less.”

Lords Wilson and Carnwath agreed with Lady Hale’s concurring judgment.

In a separate development, the Supreme Court has postponed this week's hearing between Bank Mellat and HM Treasury to enable the case to be heard by seven judges instead of five.

A spokesman for Zaiwalla & Co, which acts for Bank Mellat, said the hearing may not take place until the autumn.