The UK Government, as part of its ongoing cost-cutting measures, is recommending some significant changes to the legal aid system, including a £350m reduction in funding. In November 2010 Justice Secretary Kenneth Clarke presented a proposal in which legal aid (with some exceptions) will be cut for cases such as divorce, welfare benefits, clinical negligence and personal injury.
Speaking to the BBC about these proposals Clarke described how they planned to “introduce a more targeted civil and family scheme which will discourage people from resorting to lawyers whenever they face a problem, and instead encourage them to consider more suitable methods of dispute resolution." (i)
However, others have concerns that the changes and cuts to legal aid may reduce access to justice and affect those who can least afford it.
In the case of divorce, couples may be required to go through mediation, represent themselves or find the money to fund their own divorce under the new proposals. This will obviously cause additional stress in an already upsetting situation.
One solution, should the proposals go through, would be to introduce insurance that covers the cost of divorce. In an interview on the BBC Radio 4 show Moneybox, Tony Buss, ARAG’s Managing Director describes how in Germany divorce insurance is well-established and taken out by people alongside their other legal protection insurances. A married couple will pay a premium of approximately €100 a year which if they decide to divorce (after at least 3 years of marriage) will pay out around €30,000 towards the legal costs involved. (ii)
Another avenue to consider is that of pre- and post-nuptial agreements. These are not yet enforceable by law but with the recent publication of the Law Commission’s consultation on marital property agreements (iii) this may change in the future. Therefore it would surely make sense to introduce an accompanying insurance that would cover the cost of litigation for both spouses in the event of divorce.
So is there a place for this type of cover in the UK? As Buss points out, so far insurance companies have “shied away from providing it because it is not yet socially acceptable.” But with the potential removal of legal aid, prospect of either funding or fighting your own divorce and the possibility of legally-binding pre-nuptial agreements, this cover would certainly provide a good alternative.
You can ‘listen again’ to discussions on this topic and interviews with Tony Buss on Moneybox, Radio 5 Lives’ Breakfast Show (2 hrs 50 mins) and Ted Robbin’s show on BBC Radio Lancashire (52 mins 33 secs).
(i) 15/11/2010 BBC, Legal aid reforms are unveiled by Kenneth Clarke: http://www.bbc.co.uk/news/uk-11741289
(ii) 15/01/2010 BBC Radio 4, Moneybox: http://www.bbc.co.uk/iplayer/console/b00xgr11/Money_Box_15_01_2011
(iii) Law Commission, Marital Property Agreements: A Consultation Paper (2011) http://www.lawcom.gov.uk/marital_property.htm