At the beginning of July, the UK Supreme Court issued a decision in the case of Gow v Grant. For family lawyers this is a long awaited decision from the highest court in the UK, which finally gives clients some guidance on how the law approaches the issue of cohabitants' rights.
The background to this case is as follows:
Mrs Gow moved into Mr Grant's house in 2002. At the time she was 64 and he was 58. They became engaged. While living together, Mr Grant encouraged Mrs Gow to sell her home and to give up work. From the proceeds of the sale of her house Mrs Gow paid off some of her debts, but she also used some of the money for the benefit of her and Mr Grant as a couple.
Fast forward to 2009 when the couple separated... Mrs Gow left Mr Grant's home. She had to move into rented accommodation since she no longer had a house of her own. Mrs Gow raised an action under section 28 of the Family Law (Scotland) Act 2006, in which she sought a compensatory payment from Mr Grant for the economic disadvantage she suffered as a result of the cohabitation. The Sheriff who initially dealt with the case awarded her £39,500. This award took account of what her house would have been worth had she kept it and other contributions which she had made.
Mr Grant appealed the decision to the Court of Session, which set aside the order. In reaching that decision the Court held that the law regarding cohabitants' rights was to be applied narrowly.
Following this, Mrs Gow appealed to the UK Supreme Court. The Supreme Court held that the law should be interpreted on a broader basis and reinstated her award of £39,500. The Supreme Court held that section 28 of the Family Law (Scotland) Act 2006 (which provides for claims by former cohabitants) was "intended simply to enable the court to correct any clear and quantifiable economic imbalance that may have resulted from the cohabitation". The court which provided Mrs Gow with the financial award did not need to carry out an in-depth analysis of every item of expenditure incurred during the relationship to ascertain whether it falls within the scope of section 28. Instead, the Supreme Court found that a broader approach had to be taken. Therefore, the Supreme Court held that in making decisions in cohabitation cases, the court should look at the parties' respective financial positions at the start of their period of cohabitation and at the end of it. If it is clear from that appraisal that there has been a quantifiable economic imbalance, a financial award can be made.
What does this Judgment mean for cohabitants in Scotland? It would appear that each cohabitation case will still be determined on its own merits. The judgement allows for a wider interpretation of the contributions referred to in the 2006 Act and for the courts to look at contributions and sacrifices that cannot be valued precisely.
For any clients who intend to cohabit, the advice must remain that a cohabitation agreement is the best way to protect their financial position in the event of