Introduction
16.1 In our discussion paper on The Effects of Cohabitation in Private Law 1 we noted that the incidence of cohabitation 2 had increased greatly in recent years 3 and sought views on various preliminary proposals and questions relating to the legal effects which cohabitation should have in private law. The results of our consultation on this subject, and of the public opinion survey and public meetings on it 4 have confirmed us in our view that there is a strong case for some limited reform of Scottish private law to enable certain legal difficulties faced by cohabiting couples to be overcome and to enable certain anomalies to be remedied. However, we are also confirmed in our impression that this is a subject on which widely differing views are held. There is, in particular, a respectable view that it would be unwise to impose marriage-like legal consequences on couples who may have deliberately chosen not to marry. It was argued by some of those who commented on the discussion paper that the best approach would be to leave those who opt out of marriage to make their own legal arrangements by means, for example, of cohabitation contracts, insurance Policies and wills. Although we have considerable sympathy with this view, we doubt whether it is realistic to expect all cohabiting couples to make adequate private legal arrangements. We accept, however, that legal intervention in this area ought to be limited and that it requires to be justified in each situation in which it is recommended. It should neither undermine marriage, nor undermine the freedom of those who have deliberately opted out of marriage. It should be confined to the easing of certain legal difficulties and the remedying of certain situations which are widely perceived as being harsh and unfair. Cohabitants who do not wish to be governed by any of the new rules proposed should, in general, be able to opt out of them-for example by entering into a contract whereby they make their own legal arrangements and renounce other rights or claims in advance. 5
16.2 Scottish private law already makes some provision for cohabitants. A cohabitant can claim damages for the wrongful death of the other cohabitant under the Damages (Scotland) Act 1976, 6 and can apply to a court for occupancy rights under the Matrimonial Homes (Family Protection) (Scotland) Act 1981. 7 Cohabitation is also recognised for various purposes in the legislation on social security, tenants' rights, housing and Mental health. 8 The question therefore is not whether the law should recognise cohabitation for certain legal purposes. It already does so, and only one consultee suggested that this recognition should be withdrawn. The question is whether the existing legal response is adequate.
16.3 We recognised in the discussion paper that similar arguments for legal recognition could also be made in relation to other types of couples, such as two men living together, or two women living together. We received submissions pointing out that there was an even stronger argument for some legal intervention in the case of such couples because they did not have the option of marrying each other. We can see the force of these arguments and we are grateful for the carefully reasoned comments submitted to us on this issue. Nonetheless we consider, on pragmatic grounds, that it is likely to be more productive to concentrate on cohabitation as we have defined it above. It is this type of cohabitation which is statistically more important and in relation to which there is currently the greater demand for reform.
16.4 Some consultees expressed concern about the difficulty of applying any definition of cohabitation to the very variable types of living arrangements which couples can adopt. Others were uneasy about the arbitrariness of requiring fixed periods of cohabitation for certain purposes. We have taken these concerns into account and have avoided fixed rules and arbitrary time limits. The rules which we recommend would either be self-limiting (in the sense that a short cohabitation or one involving little mutual commitment would be likely to give rise to minimal legal consequences) or would involve sufficient discretion to enable a court to take account of all the relevant circumstances of the case.
16.5 Spouses are bound to aliment each other. 9 Cohabitants are not. We suggested in the discussion paper that this should continue to be the case and that it was difficult to justify the imposition of a potentially onerous obligation of support by the mere fact that a couple were cohabiting. So long as the relationship continued, a legal obligation would be largely irrelevant. Once it broke down a legal obligation based on the fact of former cohabitation would be objectionable, particularly as there would be no prospect of terminating it by divorce. Almost all of those who commented agreed with this view. We therefore do not recommend that there should be any obligation of aliment between cohabitants.
16.6 Where there is a child of the relationship, and the cohabitation has come to an end, the provisions of the Child Support Act 1991 ensure that the absent parent's liability for child support includes an element for the maintenance of the parent with care of the child. 10 The absent parent's liability in this case arises not from the fact of former cohabitation, but from the liability to the child. It would be the same even if the two parents had never cohabited.
16.7 In the case of a married couple there is a presumption that each spouse has an equal share in any household goods obtained in prospect of or during the marriage other than by gift or succession from a third party. 11 The presumption be rebutted by proving only that while the parties were married and living together the goods in question were purchased from a third party by either party alone or by both in unequal shares . 12 "Household goods" are defined as any goods (including decorative or ornamental goods) kept or used at any time during the marriage in any matrimonial home for the joint domestic purposes of the parties to the marriage. They do not, however, include money or securities; cars, caravans or other road vehicles; or domestic animals. 13 In the discussion paper we asked whether a presumption of this type should be applied, with the necessary modifications, to cohabitants. 14 Most respondents thought that it should. The public opinion survey produced a similar response. 15
16.8 In spite of this support, we have decided to recommend a more cautious approach. One of the difficulties in applying the presumption to cohabitants lies in deciding on a suitable qualifying period of cohabitation. The presumption would be inappropriate in the case of a short cohabitation, where there might not be any long-term commitment and where each partner may well buy household goods in the expectation that he or she would own them and would keep them if or when the relationship ended. In the discussion paper we suggested a three-year qualifying period of cohabitation. Some consultees were content with that suggestion. Others favoured a longer period. Some, as we have noted, pointed out that any qualifying period would be arbitrary and could be very difficult to apply. We see the force in these submissions and have sought to find a way of accommodating them.
16.9 The answer, we think, lies in the dual role of the presumption in section 25 of the Family Law (Scotland) Act 1985. It is designed, first, to resolve disputes where proof of actual ownership is lacking, as it often is when household goods have been bought many years ago and when neither party can remember, far less prove, who bought them. This role of the presumption seems to us to be appropriate for cohabitants. A qualifying period would be unnecessary. In the case of short cohabitations there would be every likelihood that the parties would remember, and would be able to prove if necessary, who had bought a particular item. The second role of the presumption, in the case of married couples, is to make it irrelevant who actually bought a particular item. This goes beyond the mere resolution of factual disputes and, in effect, introduces an element of common property. The relevant provision is section 25(2) which provides that the presumption of equal shares is not to be rebutted
"by reason only that while the parties were married and living together the goods in question were purchased from a third party by either party alone or by both in unequal shares".
This role seems to us to be inappropriate for cohabitants. It risks imposing co-ownership on them contrary to their wishes.
16. 10 The presumption in section 25 applies to goods "obtained in prospect of or during the marriage other than by gift or succession from a third party". The Law Society of Scotland suggested that the application to goods obtained "in prospect of" a relationship was unsuitable for cohabitants because of the different nature of the commencement of cohabitation and because of the evidential problems to which it could give rise. We agree with this submission. We also think that the wording would be more natural if it referred to "goods acquired during the cohabitation otherwise than by gift or succession from a third party". The draft Bill adopts this formula.
16.11 We recommend that
80.(a) The presumption of equal shares in household goods in section 25 of the Family Law (Scotland) Act 1985 should be applied, with modifications, to cohabitants.
(b) The presumption should apply only to goods acquired during the cohabitation, and not to goods bought "in prospect of" cohabitation.
(c) The presumption should be, rebuttable by proving that the goods belong to one party alone or to both in unequal shares and subsection (2) of section 25 (which restricts such proof in certain cases) should not be applied to cohabitants.
(Draft Bill, clause 34.)
Savings from housekeeping allowance
16.12 Section 26 of the Family Law (Scotland) Act 1985 provides that certain savings from housekeeping allowances, and other similar allowances, are to be treated as owned in equal shares. It is in the following terms.
"26. If any question arises (whether during or after a marriage) as to the right of a party to a marriage to money derived from any allowance made by either party for their joint household expenses or for similar purposes, or, to any property acquired out of such money, the money or property shall, in the absence of any agreement between them to the contrary, be treated as belonging to each party in equal shares."
This is an updated version of a similar provision, applying only to an allowance made by a husband, which was enacted in 1964. 16 It was designed to remedy the type of situation which arose in the case of Preston v Preston. 17
A husband provided his wife with an allowance for the upkeep of the household. She used her own earnings for this purpose and put the sums received from her husband in the bank. A question arose as to the ownership of these savings and it was held that they remained the property of the husband. The wife was regarded as only a stewardess of the funds remitted to her. In the absence of any evidence of donation or special agreement the money which was originally the husband's remained his.
In the case of cohabitants the legal theory which led to the decision in Preston v Preston would apply if in fact an allowance was made by one cohabitant to the other as a housekeeping allowance, to be used by the recipient as a housekeeper. Any savings would belong to the person making the allowance.
16.13 In the discussion paper we expressed the provisional view that the equitable considerations behind the presumption of equal shares in savings from a housekeeping allowance applied to cohabitants as well as to spouses. 18 We doubted whether any qualifying period was required but invited views. Almost all consultees agreed with our provisional view and, of these, about half thought that no qualifying period would be necessary. The rest favoured some qualifying period but the periods suggested by them ranged from 1 month to 3 years. For reasons already explained, we would prefer to avoid arbitrary qualifying periods if at all possible. Here a qualifying period does not seem necessary. We therefore recommend that
81. The presumption of equal shares in money and property derived from a housekeeping or similar allowance in section 26 of the Family Law (Scotland) Act 1985 should be applied, with the necessary modifications, to cohabitants.
(Draft Bill, clause 35.)
The existing provision in section 26 of the 1985 Act does not make it clear that the allowance must be made by one spouse to the other. This is perhaps implicit but we think that it should be made clear in relation to both spouses and cohabitants. The draft Bill does this in clause 35 (for cohabitants) and by an appropriate provision in the schedule of amendments (for spouses).
Financial adjustment on termination o cohabitation
16.14 We are concerned in this section with termination of a cohabitation otherwise than by death. The obvious approach is to consider the law on financial provision on divorce and ask how far the principles found there might be applied on the termination of cohabitation. The principles to be applied by a court in deciding what order for financial provision to make on divorce are that:
(a) the net value of the matrimonial property should be shared fairly between the parties to the marriage;
(b) fair account should be taken of any economic advantage derived by either party from contributions by the other, and of any economic disadvantage suffered by either party in the interests of the other party or of the family;
(c) any economic burden of caring, after divorce, for a child of the marriage under the age of 16 years should be shared fairly between the parties;
(d) a party who has been * dependent to a substantial degree on the financial support of the other party should be awarded such financial provision as is reasonable to enable him to adjust, over a period of not more than three years from the date of the decree of divorce, to the loss of that support on divorce;
(e) a party who at the time of the divorce seems likely to suffer serious financial hardship as a result of the divorce should be awarded such financial provision as is reasonable to relieve him of hardship over a reasonable period. " 19
These principles are supplemented by various rules and definitions. The most important in the present context is that fair sharing of the net value of matrimonial property (which means roughly property acquired by the parties during the marriage and before their final separation otherwise than by gift or inheritance) 20 means equal sharing unless there are special circumstances justifying a departure from this norm. 21
16.15 We do not favour a comprehensive system of financial provision on termination of a cohabitation comparable to the system of financial provision on divorce in the Family Law (Scotland) Act 1985. That would be to impose a regime of property sharing, and in some cases continuing financial support, on couples who may well have opted for cohabitation in order to avoid such consequences. Almost all consultees agreed with our provisional view that there was no adequate justification for applying to cohabitants the principle of equal sharing of property in section 9(1)(a) of the Family Law (Scotland) Act 1985. 22 There was also general support for our provisional view that one cohabitant should not be ordered, on the termination of the cohabitation, to make financial provision for the other on principles analogous to those in section 9(1)(d) or 9(1)(e) of the Family Law (Scotland) Act 1985. Section 9(1)(d) relates to an award of short-term financial support to enable one party to adjust, over a period of not more than three years from the date of the divorce, to the loss of financial support from the other. Almost all consultees considered that this would be inappropriate on the termination of a cohabitation, given that there would be no obligation of support during the cohabitation and that cases involving child care or compensation for contributions or sacrifices in the interests of the family could be otherwise covered. 23 Section 9(1)(e) is concerned with the relief of long-term financial hardship which is likely as a result of the divorce. Again, this is linked to the loss of the obligation of support which exists during a marriage and almost all consultees agreed with our provisional view that it would be inappropriate to apply it on the termination of a cohabitation. In the public opinion survey, respondents were shown a card saying
"Suppose that a couple cohabited for 5 years and then separated. They have no child. Should the one who is better off financially be bound to pay aliment (or maintenance) to the other?"
Over three-quarters (76%) of all respondents thought that the one who was better off should not be bound to pay aliment to the other. Although this question was not tied to the criteria in sections 9(1)(d) or (e) of the 1985 Act, the response does suggest a rejection of the idea of a maintenance obligation after the end of a cohabitation. This is particularly interesting in the light of the widespread support by respondents to the public opinion survey for other rights for cohabitants. It was the only question in the survey which resulted in a negative response in relation to improved rights for cohabitants. We therefore do not recommend the introduction of principles for property-sharing or financial provision, on or after the end of a cohabitation, corresponding to the principles in section 9(1)(a), (d) or (e) of the Family Law (Scotland) Act 1985.
16.16 In the discussion paper we favoured the introduction of a principle designed to share the economic burden of child-care after the end of a cohabitation. 24 There was support for this on consultation and from respondents to the public opinion survey, but the view was also expressed that both parents ought to share the economic burden of child care whether or not they has been cohabiting. In the event, this question has been overtaken by the provisions in the Child Support Act 1991 which make an absent parent liable not only for maintenance of his or her children but also for an element of support for the person having care of the child. 25 The liability will exist whether or not the parents were cohabiting. This makes it unnecessary for us to make any recommendation on this question.
16.17 We asked in the discussion paper whether, on the termination of cohabitation, a cohabitant should be able to apply to a court for an order for financial provision based on the principle in section 9(1)(b) of the Family Law (Scotland) Act 1985. 26 This provides that
"fair account should be taken of any economic advantage derived by either party from contributions by the other, and of any economic disadvantage suffered by either party in the interests of the other party or of the family".
If this principle were applied to cohabitants it would enable some provision to be made for
cases where, for example, one party has worked unpaid for years helping to build up the other's business or one party has given up a good pensionable career in order to look after the children of the relationship. The existing common law on unjustified enrichment does not provide a clear or certain remedy in such cases, 27 not being designed for intimate relationships where parties may well incur disadvantages as a result of contributions made out of love and affection 28 and partly for their own benefit. 29 Moreover, the Scottish courts have not yet developed remedies for cohabitants based on implied contracts or trusts, as has been done by courts in some other countries, 30 and it probably would not be easy for them to do so at this stage. In any event remedies based on common-law principles of uncertain application would seem to be less satisfactory in this area than specific statutory remedies. 31
16.18 The principle in section 9(1)(b) could be applied, quite readily and appropriately, to cohabitants. The argument for applying it is that it would be unfair to let economic gains and losses arising out of contributions or sacrifices made in the course of a relationship of cohabitation simply lie where they fall. To allow a remedy for the type of situation covered by section 9(1)(b) would not be to impose on cohabitants a solution based on a particular view of marriage. It would merely be to give them the benefit of a principle designed to correct imbalances arising out of the circumstances of a non-commercial relationship where the parties are quite likely to make contributions and sacrifices without counting the cost or bargaining for a return. Indeed the potential applicability of the principle to cohabitation is recognised in the 1985 Act which includes pre-marital advantages, disadvantages and contributions within the scope of section 9(1)(b). 32 It might be thought anomalous to provide a remedy for economic contributions and sacrifices made during a cohabitation which is followed by a short marriage and then divorce 33 but not for those made during a cohabitation of equal length and similar nature which ends without a marriage. 34 An argument against extending section 9(1)(b) to cohabitants, with any necessary modifications, is that parties who opt for cohabitation rather than marriage ought to know that gains and losses will lie where they fall and that common law remedies may be inadequate or difficult. They ought to make their own arrangements for any necessary adjustments or accept the consequences. 35 This, however, seems unrealistic. Many cohabitants will not know the law and will not make their own legal arrangements. It might also be argued that to provide an adjustive remedy for cohabitants would be to encourage cohabitation and devalue marriage. This, however, depends on the point of view. From the point of view of the unjustly enriched partner an adjustive remedy may make cohabitation less attractive than it would otherwise be. Moreover, even from the other partner's point of view, an adjustive remedy designed merely to mitigate injustice is hardly likely to be seen as a positive encouragement to cohabit rather than marry.
16.19 A majority of those who commented on this question in response to the discussion paper thought that a cohabitant should be able to apply for financial provision on the basis of the principle in section 9(1)(b) of the Family Law (Scotland) Act 1985. There was also strong support from the respondents to the public opinion survey. They were asked the following question.
"Suppose that a couple cohabited for some years. They do not have a child. They have now split up. During the cohabitation one of them worked unpaid to help build up the other's business. Should that person have any financial claim against the other because of this contribution to the other's wealth?"
Over four-fifths (85%) of respondents believed that a person should have such a financial claim, 13% thought that a person should not and 2% were undecided.
16.20 Although a claim based on contributions or sacrifices could often not be valued precisely, it would provide a way of awarding fair compensation, on a rough and ready valuation, in cases where otherwise none could be claimed. We agree with the majority of consultees and survey respondents that such a claim should be possible. We do not think that any qualifying period of cohabitation would be necessary or desirable. The provision would be self-limiting in that in a short cohabitation where there was little or no commitment to a potentially durable relationship there would be likely to be fewer qualifying contributions and sacrifices.
16.21 It seems clear that a claim should have to be made within a certain time after the end of the cohabitation. Any period is arbitrary but we think that, in the interests of discouraging stale claims and allowing parties to a terminated cohabitation to know where they stand, the time limit should be fairly short. We would suggest a period of one year. 36 That should allow adequate time for a former cohabitant to take legal advice and for any action to be raised. The claim would be a pecuniary claim and, on general principles, would transmit to an executor, if the former cohabitant died within the year after termination of the cohabitation in the same way as would a claim based on breach of contract or unjustified enrichment.
16.22 So far as questions of jurisdiction, procedure and the powers of the courts are concerned we think that
(a) a court should have jurisdiction to deal with a claim under the proposed provision if it would have had jurisdiction to entertain an action of divorce between the parties
(b) the procedure should be regulated by rules of court
(c) the court should have power to make an order for the payment of a capital sum, and should have power to make an interim award, an order for the payment of the capital sum by instalments, and an order for a deferred payment.
We do not think it necessary to provide for orders for the transfer of property in this connection. The claim is akin to a claim based on unjustified enrichment and an award of a capital sum ought to be sufficient to enable justice to be done. This also simplifies the legislation. An order for a transfer of property might have been an appropriate remedy if we had been recommending a sharing of the net value of certain property on the ending of a cohabitation, on the lines of section 9(1)(a) of the Family Law (Scotland) Act 1985, but we are not.
16.23 We recommend that
82.(a) Where a cohabitation has terminated otherwise than by death, a former cohabitant should be able to apply to a court, within one year after the end of the cohabitation, for a financial provision on the basis of the principle in section 9(10) of the Family Law (Scotland) Act 1985-namely that fair account should be taken of any economic advantage derived by either party from contributions by the other, and of any economic disadvantage suffered by either party in the interests of the other party or of any child of the family.
(b) The Court of Session and the sheriff courts should have jurisdiction to entertain an application if they would have had jurisdiction to entertain an action for divorce between the parties.
(c) An application should be made by action, any necessary regulation of procedure being by rules of court.
(d) The court hearing an application should have power to award a capital sum (including a deferred capital sum and a capital sum payable by instalments) and to make an interim award.
(Draft Bill, clause 36.)
We have referred, at the end of paragraph (a) above, to the interests of the other party or of any child of the family. This is a slightly narrower formula than that used in section 9(1)(b) of the 1985 Act which refers to "the interests of the other party or of the family". We considered using the 1985 Act formula but came to the conclusion that it was too vague and potentially too wide. Would it cover the wider family of, say, brothers, sisters, uncles.,, aunts and cousins? Should it apply in such cases if there was no benefit to the other partner in the relationship? Why should one partner be liable to the other if the other has, of his or her own volition, incurred costs in looking after an ill brother or parent who lived nearby. Having decided to refer, more precisely, to children of the family in the context of cohabitants we concluded also that the same change ought to be made in the Family Law (Scotland) Act 1985. This is done in the schedule of amendments in the draft Bill. This would not necessarily preclude a claim by, say, a wife who had given up work to look after an old parent of the husband but she would need to show either that her contributions in doing so had been of economic advantage to the husband or that the disadvantage suffered by giving up work had been in his interests, as it very often would be.
Discretionary provision on death
16.24 In the discussion paper we raised the question whether a surviving cohabitant should succeed on intestacy to his or her deceased partner. We examined this question in some' detail, distinguishing between long and short cohabitations, between cases where there had been or had not been a child of the relationship, between cases where there was or was not a surviving spouse, and between cases where the deceased was or was not survived by other relatives. Given the need, in this situation, for some qualifying period of cohabitation and given the various qualifying periods possible, the range of permutations was extensive. Perhaps for this reason the results of our consultation were inconclusive. There was majority support -for intestate succession rights for a cohabitant where the cohabitation had lasted for ten years or more and had been terminated by the death. Most consultees considered that in such cases of long cohabitation, whether or not there had been a child of the union, the cohabitant should succeed on intestacy in preference to all other claimants except a surviving spouse. However, there were those who saw difficulties and dangers in conferring fixed rights of intestate succession on cohabitants even in such cases, including difficulties in proving the duration of the relationship and the danger of spurious claims. On the other hand there were those who argued that a long-standing cohabitant should be preferred to a long-separated spouse. There was less support for rights of intestate succession for the surviving cohabitant where the cohabitation had lasted less than ten years. In relation to such shorter cohabitations opinion was sharply divided even when it was assumed that there had been a child of the union.
16.25 Respondents to the public opinion survey were also asked about possible rights of intestate succession for cohabitants. The first question was as follows.
"A man and a woman have cohabited for more than 10 years and have two children. The man has now died suddenly without leaving a will. He is not survived by a wife or any other relatives. His property is worth £20,000 in all. Should the property go to the cohabitee, to the children or to the cohabitee and the children?"
Over two-thirds of all respondents (68%) believed that the property should go to the cohabitant and the children, 17% thought it should go to the cohabitant and 13% thought it should go to the children. 2% claimed to be undecided. Where the same hypothetical couple had been cohabiting for only 3 years when the man died, 64% of respondents thought that the property should go to the cohabitant and children-not a significantly lower number than when the period of cohabitation was 10 years-15% thought it should go to the cohabitant and 18% thought it should go to the children. Respondents were also asked about a situation involving no children but a surviving spouse.
"A man and a woman have cohabited for more than 10 years. They have no children. The man was married to someone else, when the couple started cohabiting and has never obtained a divorce. The man has now died suddenly without leaving a will. He is survived by his cohabitee and his wife, but not by any other relatives. His property is worth £20,000 in all. Should his property go to the wife, the cohabitee or to the wife and the cohabitee?"
Almost half of all respondents (47%) favoured an even division between the wife and cohabitant, 27% thought the property should go to the cohabitant and 19% thought it should go to the wife. 7% expressed no opinion. A further question dealt with the situation where there was a surviving cohabitant and an adult son of the deceased by a former marriage (now ended by divorce). The preferred solution in this case was for a division between the cohabitant and the adult son. The shorter the period of cohabitation, the more support there was for the property going to the son alone.
16.26 It is clear from the results of our consultation and public opinion survey that there is considerable support for giving cohabitants some succession rights on intestacy. Beyond that, however, no clear pattern emerges. In some common situations the preferred response of members of the public would appear to be that the cohabitant should take a share of the estate along with other claimants, such as a surviving spouse or children, but not the whole of the estate.
16.27 In relation to testate succession our provisional view in the discussion paper was that there was no justification for giving a cohabitant a claim for legal rights (or legal share 37 ) out of the deceased's estate where the deceased's will left the property to someone else. However, this was on the view that the cohabitant might be able to claim financial provision out of the deceased's estate, on a principle analogous to that in section 9(1)(b) of the Family Law (Scotland) Act 1985, to recompense him or her for contributions or sacrifices made to or for the benefit of the deceased. 38 We recognised, however, that different views could reasonably be taken on the question of legal rights for cohabitants, and pointed out that a Scottish public opinion survey some years ago had found that 73% of respondents supported the idea of giving a surviving cohabitant a right to some part of the deceased partner's estate in spite of omission from his or her Will. 39 Most of those who commented on the discussion paper agreed that a cohabitant should not be given a right to claim a legal share of the deceased's estate in opposition to the terms of his or her will. However, the Law Society of Scotland thought that the court should have a discretion to award a share even in opposition to the terms of the will. The Committee of the Scottish Clearing Bankers also favoured a system of discretionary provision, pointing out that one significant factor would be the date of the will in relation to the date of commencement of cohabitation. Two other consultees thought that the cohabitant should not necessarily be denied a claim against the estate merely because he or she was omitted from the deceased's will, one pointing out that the presence of children of the relationship who had also been omitted from the will could be an important factor.
16.28 In our report on Succession we rejected, in the light of consultation, the idea that a discretionary system of family provision might replace a system of fixed legal rights, or legal shares, for spouses and children. 40 We also rejected the idea of allowing other categories of people to claim discretionary provision out of the estate of a deceased person, although we noted that of those who favoured such a system for claimants other than spouses or issue most would have extended it to de facto spouses. 41 In rejecting at that stage the idea of discretionary provision for cohabitants we were strongly influenced by the views of consultees. In our earlier consultation paper on this subject we had expressed the view that there was a clear case for allowing a cohabitant to apply for a provision out of the deceased's estate. 42 It was therefore of interest to us to note that important consultees, including the Law Society of Scotland which had at one stage opposed discretionary provision, now supported it for cohabitants. We do not find this in any way surprising. Public opinion on the question of discretionary provision or fixed rights is very evenly divided. 43 There are good arguments on both sides, which we have fully discussed in earlier papers. 44 In the light of the general support for some provision for a cohabitant out of the estate of the deceased partner in at least some cases, coupled with the inconclusive results of our consultation on fixed rights, we have been driven back to reconsidering the case for a system of discretionary provision for cohabitants. We still think, however, that a system of fixed rights is preferable for spouses.
16.29 The main advantage of a discretionary system for cohabitants is that it can take account of the widely differing circumstances of different cases, including the duration of the cohabitation, the presence of children, the rights or claims of a surviving spouse (if any), the rights of other relatives (if any), the terms of the deceased's will and the date when it was made, the extent of any contributions or sacrifices made by the surviving cohabitant which were to the benefit of the deceased, and so on. This flexibility is probably of more value in cohabitation cases than in any other class of case. One disadvantage is that a court application is necessary. However, where the alternative is no rights at all, that is unlikely to be perceived as a serious disadvantage. In practice, cases will often be settled without the need for court proceedings. Another disadvantage is that a widely framed discretionary provision can be difficult for courts to apply. Again, however, that is the price which has to be paid for a flexible discretionary system. The experience of countries which have had discretionary systems for many years suggests that they work well enough in practice. The tendency has been to expand, rather than restrict, their scope. 45 Where, as in the case of a spouse, there is a choice between a system of fixed rights and a system of discretionary provision the advantages of a system of fixed rights appear to us to outweigh the advantages of a discretionary system. Where, however, the relationship giving rise to the claim is of a less certain character and where, accordingly, the choice may have to be between a system of discretionary provision and no provision at all, we think that the disadvantages of a discretionary system are tolerable. We have therefore concluded that we should now recommend the introduction of a system of discretionary provision for a surviving cohabitant out of the estate of the deceased cohabitant.
16.30 In devising a suitable scheme we have considered the laws of England and Wales, and of various Commonwealth countries. We have not, however, followed any one non-Scottish model in all respects, mainly because we are concerned with one narrow case-the surviving cohabitant-whereas the other systems we have examined are concerned also with spouses and children and other cases. The nature and scope of our recommendations has enabled us to opt for a simpler system than some of those we have examined. In particular, we do not propose to include power to order periodical payments. Such a power is given by the English legislation 46 but we think that it reflects the maintenance based origins of that legislation. We do not think that provision for a surviving cohabitant should be confined to maintenance. In some cases it may be intended to provide recompense for past contributions or sacrifices. In others it may be intended to reflect the view that the deceased, if he had made a will, would in all probability have made provision for the cohabitant. In some such cases (particularly where the only other claimant is the Crown or a remote relative) the appropriate award may be the entire estate. Omitting periodical payments enables the law to be considerably simplified. We have also decided to omit anti-avoidance provisions, because we are not satisfied that there is any need for them in cases where the claim is made by a cohabitant who was living with the deceased immediately before his death. 47 Again this enables the law to be stated in a much simpler way.
16.31 So far as jurisdiction is concerned, the close connection with succession suggests that the domicile of the deceased (which is the normal basis of jurisdiction in succession matters) should be the connecting factor. We suggest that the Court of Session should have jurisdiction if, at the date of death, the deceased was domiciled in Scotland and that a sheriff court should have jurisdiction if, at the date of death, the deceased was domiciled in the sheriffdom. In addition to the Court of Session, the sheriff at Edinburgh should, we suggest, have jurisdiction if the deceased was domiciled in Scotland when he died but cannot be assigned a domicile in a particular sheriffdom. These rules are similar to rules in the Succession (Scotland) Act 1964 48 (prior rights) and in the draft Bill appended to our report on Succession. 49 It is important that the court dealing with general aspects of succession to the deceased's estate should have jurisdiction to deal with a cohabitant's claim.
16.32 Title to apply should be confined to a person who was, immediately before the deceased's death, living with him or her as husband and wife (whether or not pretending to be married) although not actually married to him or her. The criterion should be essentially the same as that in the Damages (Scotland) Act 1976 50 which allows a claim for damages for wrongful death by "any person, not being the spouse of the deceased, who was, immediately before the deceased's death, living with the deceased as husband or wife." We do not think that any qualifying period of cohabitation should be required. This would introduce an element of arbitrariness and, in some cases, difficulties of proof. The duration of the cohabitation should simply be a factor to be taken into account in quantifying a claim. In deciding whether two people were cohabiting immediately before the death of one of them, any absence of either as an in-patient in a hospital or similar institution, and any temporary absence such as absence on a vacation or a work assignment, should be ignored. 51
16.33 The ground of application should, we suggest, be that the disposition of the deceased's estate was not such as to make such financial provision for the applicant as it would be reasonable to expect the applicant to receive having regard to all the circumstances of the case 52 and, in particular, to the following factors
(a) the length of the cohabitation
(b) the existence of any children of the relationship between the applicant and the deceased or of any children treated by them as children of their family
(c) the size and nature of the deceased's net estate
(d) any benefit received, or to be received, by the applicant on, or as a result of, the deceased's death otherwise than out of his net estate
(e) the nature and extent of any other rights against, or claims on, the deceased's net estate 53
(f) the nature and extent of any contributions made by the applicant from which the deceased has derived economic advantage
(g) the nature and extent of any economic disadvantage suffered by the applicant in the interests of the deceased or of their children.
16.34 So far as the powers of the court are concerned we suggest that the court should be given power, if the above ground is established, to make such order, if any, for financial provision for the applicant out of the, deceased's net estate as it considers reasonable. In appropriate cases the award might extend to the whole net estate. The court should have power to order payment of a capital sum or a transfer of property or both. It should have power to order the payment to be in instalments, or the payment or transfer to be deferred, or any combination of these orders. It should also have power to order interim payments, in appropriate cases. It should be possible, on a change of circumstances after the order, to vary the order for payment by instalments or for payment or transfer at a deferred date, but not so as to alter the total amount awarded.
16.35 We think that it is important that claims by cohabitants should not be allowed to delay unduly the administration of estates. For this reason we favour a time limit on applications of six months from the date of death, with power to the court to allow late applications on cause shown, for example, if a later will is discovered after the expiry of the limit which revokes an earlier will in favour of the cohabitant, or if the executor or relatives have led the cohabitant to believe that a reasonable provision would be made and then refuse any payment after the time limit has expired. Executors, however, should not be liable for having distributed any estate without taking account of the possibility of a claim being made, and allowed, later than 6 months after the date of death. 54 If the surviving cohabitant dies before having commenced proceedings his or her right to claim would, as a normal pecuniary claim, transmit to his or her executor. We do not think that any special provision is necessary in order to achieve this result.
16.36 Any award to a cohabitant under these provisions should be paid out of the net estate 55 after debts and funeral expenses have been provided for. We recommend that the court, which will have the relevant facts before it anyway for the purposes of the claim, should have power to say which parts of the estate (e.g. residue, or bequest to a long separated spouse) should bear the cost of the award. For the purposes of inheritance tax any money or property due to the cohabitant by virtue of an order should be treated as if it had been left by the deceased to the cohabitant. 56
16.37 We therefore recommend that
83. Where a cohabitation is terminated by death the surviving cohabitant should not have automatic rights of intestate succession or fixed rights to a legal share of the deceased's estate but should be able to apply to a court for a discretionary provision out of the deceased's estate under a scheme of the type set out in paragraphs 16.31 to 16.36.
(Draft Bill, clauses 37 and 38.)
Occupancy rights and protection from violence
16.38 A cohabitant who is not the owner or tenant has no automatic occupancy rights in the family home under the Matrimonial Homes (Family Protection) (Scotland) Act 1981. However, he or she can apply to a court for a grant of occupancy rights for a period of up to six months, which can be extended for a further period or periods but not by more than six months at a time. 57 In the discussion paper we asked for views on whether cohabitants should be given occupancy rights under the 1981 Act without the need to apply to a court for them. Most respondents were opposed to this idea. They thought that the existing provisions were adequate and that automatic rights would cause difficulties both for owners or tenants who wished to exclude a violent partner and for third parties, such as police officers, who might find it difficult to decide whether or not there was cohabitation which was sufficient to bring. occupancy rights into existence. Opposition was expressed not only by legal organisations, such as the Law Society of Scotland and the Family Law Association, but also by the Building Societies Association, the Committee of Scottish Clearing Bankers.' the Association of Chief Police Officers (Scotland) and the Association of Scottish Police Superintendents. Interestingly, opposition was also expressed at one of the public meetings by a representative of Scottish Women's Aid, on the ground that automatic rights for cohabitants would be against the interests of the many women who were sole tenants of their homes. We do not recommend automatic occupancy rights for cohabitants.
16.39 In the discussion paper we said that we would not be in favour of extending to cohabitants the existing provisions of the 1981 Act relating to dealings but invited views on whether some other form of protection against, say, a sale of the house by the other cohabitant might be provided. 58 At this time we were consulting on other forms of protection for spouses too 59 and considered that some limited forms of protection might be equally suitable for spouses and cohabitants. In the end we have decided not to recommend fundamental changes in the 1981 scheme for spouses and so, although there was some support on consultation for giving cohabitants protection against dealings, we have decided not to pursue this question further. We are not aware that the existing law gives rise to any difficulty in practice.
16.40 The existing position with regard to interdicts against domestic violence to which a power of arrest can be attached ("matrimonial interdicts") is, however, unsatisfactory in relation to cohabitants. The protection of a matrimonial interdict is available only if a cohabitant has obtained a grant of occupancy rights from a court, or if both cohabitants are entitled, or permitted by a third party, to occupy the home. 60 It follows that if a woman who is the owner or tenant of a house cohabits there with a man who is not owner or tenant, and he begins to be violent towards her, she cannot obtain the protection of a matrimonial interdict unless he has applied successfully for occupancy rights. This is unfortunate and, in our view, unjustifiable. In the discussion paper we suggested that matrimonial interdicts, with powers of arrest attachable, should be available to cohabitants, whether or not they had occupancy rights, and without the need for any qualifying period of cohabitation. 61 There was strong support for this on consultation. It was suggested, however, by one consultee that the term "matrimonial interdict" was inappropriate for a remedy available to unmarried persons and that this type of interdict should be called a "domestic" interdict or given some other suitable name. We agree with this suggestion and recommend that
84.(a) Interdicts of the type described in section 14(2) of the Matrimonial Homes (Family Protection) (Scotland) Act 1981, to which a power of arrest can be attached, should be available to cohabitants, whether or not they have occupancy rights, and without the need for any qualifying period of cohabitation.
(b) Such interdicts for cohabitants (currently called "matrimonial interdicts") should be renamed or described in a way which does not suggest that they are confined to married persons.
(Draft Bill, clause 39.)
16.41 Insurable interest. A person effecting a policy of assurance on someone else's life must have an insurable interest in the other person's life. 62 It is accepted that one spouse has an insurable interest in the life of the other. 63 This is not regarded as being merely pecuniary. It is not directly linked to the obligation of aliment but is regarded as the same type of interest as a person has ' in his or her own life. 64 Family protection policies, whereby one spouse insures the
life of the other so as to receive, say, an annuity to cover the period when children are dependent and likely to impair earning potential, are commonplace. It seems to us, and almost all consultees agreed, that it would be unfortunate if any legal barrier were to be placed in the way of a cohabitant wishing to take out a policy of this nature. We were told by the Association of British Insurers that several insurance companies already regard one cohabitant as having an insurable interest in the life of the other, and it may well be that the courts would take the same view. However, a statutory provision would clarify the position. No qualifying period of cohabitation would seem to be necessary for this purpose. A cohabitant would be likely to think of effecting an insurance policy on the life of his or her partner if the relationship was one of some permanence. We therefore recommend that
85.(a) For the avoidance of doubt, it should be made clear by statute that a cohabitant has an insurable interest in the life of his or her partner of the same type as he or she has in his or her own life.
(b) No qualifying period of cohabitation should be required for this purpose.
(Draft Bill, clause 40.)
16.42 The Association of British Insurers was, for administrative reasons, strongly in favour of any reform being on a United Kingdom basis. We do not consider, however, that a clarifying provision, which would enable existing practices to be continued on a more secure basis, need create any difficulty in this respect. We do not think, therefore, that a provision on the lines suggested need await a corresponding provision in English law.
16.43 Married Women's Policies of Assurance (Scotland) Act 1880. Section 2 of this Act, as amended, 65 enables a person to take out a policy of assurance on his or her own life for the benefit of his or her spouse in such a way that the policy is held in trust for the beneficiary as soon as it is effected, without the need for any delivery or intimation. 66 "Spouse" includes a person, named in the policy as a beneficiary, who later becomes the spouse of the person effecting the policy. 67 A cohabitant could take out a policy on his or her own life for the benefit of his or her partner, without the benefit of the Act, and could do so either by naming the partner as the direct beneficiary, 68 or by taking the policy in trust for the cohabitant. In either case, however, there would have to be delivery of the policy, or some sufficient equivalent of delivery (such as intimation, or registration in the Books of Council and Session) before the cohabitant would acquire a vested beneficial right. 69 The 1880 Act is useful because it obviates the need for delivery or intimation and avoids the difficulties which might arise at a later stage if delivery or some equivalent could not be established. It enables a simple family trust to be created in a very easy way. It also contains a provision on the rights of the creditors of the person effecting the policy which is arguably better adapted to the circumstances of this type of transaction than the general rules on gratuitous alienation's. 70 The fact that cohabitants cannot rely on benefits under many superannuation schemes will often make the taking out of private life assurance a very wise precaution. The law should, in our view, do. what it can to make it easier for people to provide for their dependants in this way. If the 1880 Act were to be extended to cohabitants no qualifying period of cohabitation would seem to be necessary. A person can already, as we have seen, take out a policy in favour of a cohabitant (or anyone else) so long as there is the necessary intimation or delivery. There is no great question of policy involved. All that is involved is a simple extension of a facility.
16.44 Our provisional proposal that the benefits of the 1880 Act should be extended to cohabitants was supported by virtually all of those who commented on it. The Association of British Insurers, while supporting the proposal, again suggested that equivalent changes should be made to English law at the same time. However, given that there is already separate Scottish legislation on this subject we do not consider that this useful minor reform of Scots law need await corresponding changes in England.
16.45 We recommend that
86. (a) The benefits of the Married Women's Policies of Assurance (Scotland) Act 1880 (which enables a person to take out a life insurance policy on his or her own life for the benefit of his or her spouse in such a way that the policy is held in trust for the beneficiary as soon as it is effected) should be extended to cohabitants.
(b) No qualifying period of cohabitation should be required for this purpose.
(Draft Bill, clause 41.)
We have taken the opportunity presented by the draft Bill to include a provision repealing section 1 of the 1880 Act, which is now unnecessary. It is based on notions of married women's property and married women's contractual capacity which have long ceased to be reflected in the law. 71
16.46 Where cohabitants have the foresight to attempt to regulate by contract the questions of property and finance arising out of the cohabitation, it might be thought that the policy of the law should be to give effect to their arrangements. There is, however, a possibility that at least some contracts between cohabitants would be held to be illegal and unenforceable. 72 The following passage is taken from Gloag on Contract. 73
"A contract having as its object the furtherance of illicit sexual intercourse is illegal. Thus a bond granted to a woman to induce her to submit to intercourse, or to reward her for having submitted, cannot be enforced. Where a bill was given to induce a man to take back his divorced wife-there being no provision that he should remarry her, and the agreement being in effect that he should live with her as his mistress-opinions were given that this consideration amounted to turpis causa. And neither a bond nor a legacy given or promised as the price of continued illicit intercourse can be enforced. On the other hand, there is no legal objection to a provision made for the woman after the illicit intercourse has ceased. And the fact that A. and B. were living, and continued to live, in adultery, was held not to invalidate a mutual will, so as to deprive a third party of a benefit under it. "
The cases cited in support of these propositions all- date from the 19th century or earlier and it is to be hoped that a court today would not regard a contract between cohabitants relating to aliment, property or other such matters as contrary to public policy. Given that cohabitation is already recognised for various legal purposes (including occupancy rights in the matrimonial home, 74 succession to certain tenancies 75 and damages on death 76 ) such a view would be highly questionable. The typical cohabitation relationship nowadays is not one of female, or male, prostitution but is a reciprocal arrangement for living together, supporting each other and sharing important areas of life, 'Which is often indistinguishable from marriage from the factual point of view. Whether legislation is necessary on this point is open to question 77 but if there is any legal doubt which might deter cohabitants from making effective contractual arrangements relating to property or financial matters then it ought to be removed. The Committee of Ministers of the Council of Europe adopted a recommendation on 7 March 1988 that governments of member states should take the necessary measures
"to ensure that contracts relating to property between persons living together as an unmarried couple, or which regulate matters concerning their property either during their relationship or when their relationship has ceased, should not be considered to be invalid solely because they have been concluded under these conditions.". 78
In the discussion paper we suggested that a contract between cohabitants or prospective cohabitants should not be void or unenforceable on any ground if it would not have been void or unenforceable had they been spouses or prospective spouses. 79 Almost all consultees agreed with this suggestion, although one criticised the technique of using spouses as the criterion and preferred the type of wording in the Council of Europe recommendation. We accept this criticism. There is no need to assimilate cohabitants to spouses in this context and it could produce the wrong results if there were ever to be special restrictions applying to spouses only. We therefore adopt the type of approach used by the Council of Europe and recommend that
87. A contract between cohabitants or prospective cohabitants relating to property or financial matters should not be void or unenforceable solely because it was concluded between parties in, or about to enter, this type of relationship.
(Draft Bill, clause 42.)
16.47 On consultation a' number of people suggested that, if cohabitation were to have certain legal consequences, cohabitants should be able to opt out of them. We have not included any specific provision on opting out in our draft Bill because we do not think that it is necessary given the nature and limited extent of our proposals. Cohabitants could, for example, agree in advance on the division of household goods and thereby, in effect, opt out of the provision on this matter which, in any event, is only a presumption. 80 The provision on savings from housekeeping allowances applies only "in the absence of any agreement between them to the contrary". 81 A claim for financial provision on the termination of a cohabitation could, like any other pecuniary claim 82 be renounced in a prior agreement. Even if an agreement between the cohabitants did not amount to an actual renunciation, which excluded the jurisdiction of the court, it could certainly be taken into account by the court, as part of the circumstances of the case, in deciding what was a fair and reasonable award. We do not think that opting out of the possibility of a domestic interdict ought to be any more permissible than opting out of the possibility of a matrimonial interdict between spouses. These are protective remedies aimed primarily at the prevention of domestic violence, or further domestic violence, and opting out seems inappropriate in relation to them. So far as insurance policies and cohabitation contracts are concerned, any legal consequences are the result of opting in, and there is therefore no need to provide for opting out.