When a relationship ends, the Property (Relationships) Act 1976 says that one partner may need to pay the other partner compensation if there is a big difference between the partners’ income and living standards. But it is hard for a partner to claim compensation.
The partner who claims compensation must show a court that the difference in income and living standards is because of the roles each partner took during the relationship. It is hard to show the link.
Even if the partner proves the link, the court decides how much compensation to award. Sometimes the court will make big discounts because it is not certain how much income the partners will actually earn over the coming years.
In around 40% of cases, the courts have awarded compensation. But the level of compensation has not been high. It is very rare for the court to award more than 10% of the total relationship property.
Because compensation claims are so difficult to prove, a partner can incur big legal costs trying to make the claim.
The law is unclear and does not provide sufficient guidance to the courts. Although the Property (Relationships) Act 1976 says that a court can award compensation, it is not clear what the compensation is for. It could be for one or more of several things:
- the partner’s lost opportunity to develop a career;
- the partner’s unpaid role in the relationship;
- the partner’s loss of income and living standards he or she enjoyed during the relationship;
- the partner’s loss from investing in the other partner’s career through the relationship and then losing the benefits of that investment.
The uncertainty makes it difficult for lawyers to advise people.
We discuss the problems with the law in greater detail in our Issues Paper [LINK].