Assessing economic disadvantage between cohabitants

Unmarried couples across the UK do not have equal financial claims against each other following separation. A striking case in the Supreme Court issued in the summer of 2012 has highlighted this inconsistency.

Mrs Gow sold her house for £50,000 and moved in with Mr Grant in 2003. His house was worth £200,000. They never married. The relationship ended in 2008. They had lived in his house near to Edinburgh.

In Scotland “cohabitant’s rights” were established by The Family Law (Scotland) Act 2006. Section 28(3)(b) provides for a former cohabitant to claim payment of a capital sum upon separation where that cohabitant “has suffered economic disadvantage in the interests of the defender”, namely, the other cohabitant.

Mrs Gow was awarded £39,500, which was affirmed in the appeal to the Supreme Court. When the cohabitation ended Mrs Gow did not have a home whereas Mr Grant still had a home which had increased in value. Had she retained her own house it would have increased in value. The court’s conclusion was that Mrs Gow should be compensated for that disadvantage. The overriding principle was fairness rather than precise economic calculation. Indeed Mrs Gow had spent some of the sale proceeds in 2003 to repay debt and make a loan to her son. Only a fraction of it was used to towards joint living expenses with Mr Grant. It was not essential for her to establish that her economic disadvantage had resulted in him gaining economic benefit.

Had Mrs Gow and Mrs Grant been living south of the border she would not have been able to make such a claim. Indeed Lady Hale said that there was a real need for a similar remedy in England and Wales. The 2006 Act had achieved a lot for Scottish cohabitants and their children. English and Welsh cohabitants and their children deserved no less.

Donald Wright
dw@propertywright.com