Cash claim chance for cohabitants

The door has opened a little wider for unmarried couples to claim financial compensation from one another when they split up.

In a landmark Supreme Court ruling last month, Angus Grant was told he should pay Jessamine Gow £39,500 after the cohabiting pensioners’ relationship ended. The right to compensation for unmarried couples became available under section 28 of the Family Law (Scotland) Act 2006, but had not been tested in the Supreme Court until recently.

As a result, courts can now expect an increased flow of new claims in the months and years ahead.

Family law practitioners are also poised for a big increase in demand for cohabitation agreements from couples setting up home together. Recent government estimates put the number of Scottish adults cohabiting at more than 370,000 and 
rising.

A cohabitation agreement allows the couple to regulate their own affairs and state what they wish to happen should they ever separate, providing some financial certainty in the event of unmarried couples breaking up.

Although the Supreme Court, led by Scottish judge Lord Hope, stressed that the ruling does not legally equate cohabiting couples with married ones, it does allow unmarried couples to seek financial compensation similar to divorcing couples, but without the assumption of an equal division of assets.

The Supreme Court – overturning an earlier Court of Session ruling – heard that the couple met in 2001, when Mr Grant was 58 and Ms Gow was 64.

Within a year he asked her to move into his house in Penicuik. In 2003 Ms Gow sold her flat in Edinburgh, encouraged by Mr Grant. They separated in 2008.

The compensation was largely for the value the flat would have gone up by had she not sold it. The court heard that the proceeds were used “partly for her own purposes and partly for the couple’s living 
expenses”.

The family law team at Lindsays welcomes the clarity brought by this ruling.

This decision has been keenly awaited among family lawyers in Scotland. It has been difficult until now to give clients in cohabitation cases clear legal advice about their rights and potential liabilities. This decision clarifies how such claims should be approached.

The effect will be to widen the scope of possible claims at the end of a cohabitation.

While no floodgates are likely to open, we can predict that there will be many more cohabitation claims in the future – not because more cohabitations are going to break down, but because more claims will be worth making.

Cohabitants in Scotland should now carefully consider a cohabitation agreement specifying who, if anyone, is going to get what, if anything, in the event of a breakdown.

A cohabitation agreement may be about as romantic as a pair of beige polyester bedsocks, but it is more useful.

The other important thing for cohabitants to remember is 
that there is a strict time-bar for making a statutory claim, so if 
you think you may have a claim, 
you need to get the case started within 12 months of the end of the cohabitation.

Lesley Gordon is head of family law at Lindsays