Happy families

Family: unity but some signs of tension

On many issues, the Conservatives and Liberal Democrats are poles apart. They do though have much in common in relation to family law issues.

Divorce and matrimonial finance: despite a general consensus among the judiciary and specialist practitioners that an overhaul of our 40-year-old matrimonial legislation is necessary, it is difficult to predict what policy the new government will adopt. The Conservatives have indicated that they propose making prenuptial agreements binding, while the Lib Dems want to introduce no-fault divorce. Given that the passage of the Family Law Bill almost brought down the last Conservative government, Tory cabinet members may well baulk at the suggestion of new legislation introducing wholesale reform. Expect instead amending provision to reform our divorce laws at the margins rather than a new Matrimonial Causes Bill being tabled.

Legal aid: both parties have indicated they will conduct a legal aid review to explore new funding options and examine ways to relieve pressure on the legal aid fund. The financial constraints under which the family justice system currently operates means that delay, and therefore prejudice to countless children, is now systemic.

Currently, the Legal Services spends £150m on funding private law Children Act disputes. Add the administrative costs of running the family courts and funding CAFCASS, and the figure increases to around £300m. A new focus on alternative dispute resolution is therefore inevitable in an attempt to bring down the cost to the public purse.

Media access: both parties were vocal in their opposition to part 2 of the Children, Schools and Families Bill, with the Tories introducing the requirement of an independent review prior to the implementation of the Act. Senior members of the judiciary, particularly the new president of the Family Division, Sir Nicholas Wall, have been extremely vocal in their criticism of the former government's plans and a policy u-turn is therefore likely.

Same-sex marriage: in their 'Contract for Equalities', published during the election campaign, the Conservatives announced that, if elected, they would consider the case for civil partnerships to be 'called' and 'classified as marriage'. Nick Clegg has already said that he supports 'gay marriage' and is opposed to the existing 'separate but equal' approach of civil partnership that continues to stigmatise same-sex couples. The problem facing the Conservatives will be to persuade the right wing press to support reform.

Cohabitees: two years ago New Labour kicked the Law Commission's recommendations for reform into the long grass. This may remain an area of tension for the coalition government. The Lib Dems propose full legal protection and recognition to unmarried couples, both same and opposite sex. The only commitment from the Conservatives has been that they will conduct a wholesale review of family policy.

Miles Geffin is a legal director in the family department at Mishcon de Reya

Legal aid: less money, more liberty?

As far as civil liberties are concerned, the omens are good. At point ten of the document summarising the deal between the parties, the government commits itself to a 'Freedom or Great Repeal Bill'. What seems to be intended is a veritable bonfire of the New Labour anti-civil liberties measures. This policy has Liberal Democrat fingerprints all over it as the party was touting a draft Freedom Bill to do this at its last conference. Out will go ID cards, the national identity register and biometric passports. Also included is the reform of the libel laws, the Freedom of Information Act, restoration of rights to non-violent protest and greater protections for the DNA database. Let us hope the legislation does not get cut to ribbons by rebellions on the Tory backbenches and political opportunism from the opposition, keen to exploit any divisions in the coalition government.

Part of the reason for swinging behind a more liberal civil liberties agenda is to save cash. Both parties claim savings can be made by scrapping the ID cards '“ described as a 'laminated poll tax' by the Lib Dems. They also claimed in their manifesto that £795m could be saved by cancelling the prison building program and replacing prison sentences of less than six months with community service. Such measures play well with those close to penal policy who know prison is hopeless at rehabilitation. Could this be where the Lib Dem inspired progressive policies of the coalition hit the brick wall of populist opinion which believes 'prison works'? New Labour was too fearful of being perceived as soft on crime to lance this particular boil. A government of the right might have more chance.

No word yet on legal aid policy from the government. It is a sure bet though that there will be legislation to reform the LSC as this has all party support. LAG will be vigilant about the need for protection of the independence of decision making in granting legal aid, and will argue for an independent appeals system in the legislation. LAG would also expect the Conservative's manifesto pledge to have a review of legal aid to go ahead. Such a review would be likely to report in the autumn just as the fine details of a new spending review are being finalised. Some difficult decisions lie ahead on spending and cuts. A struggle is likely over the MoJ's budget which has already been reduced by ten per cent in the last three years.

Steve Hynes is director of the Legal Action Group

Personal injury: Jackson put on hold

At the end of March, Kennedys met with the then shadow minister for justice, Henry Bellingham, to discuss the Conservative party's attitude to the Jackson report and to personal injury claims generally. He clearly welcomed dialogue with interested parties and commented: 'We can and must find ways of controlling civil litigation costs and I hope that we can build on the Jackson report to bring in a more robust system which, at the same time, preserves access to justice.'

Taking into account indications of Conservative policy given before the election, the practical implications of this are likely to be (subject to any change in approach following the appointment of Kenneth Clarke and input from the Liberal Democrats):

• Further consultation is likely before any changes are implemented '“ indications have been given that it is considered that the approach of the Labour government, for example to the implementation of the new MoJ RTA process, has been hasty.
• Ensuring access to justice will be a key focus, which may well impact on continued recoverability of success fees and ATE premiums, and also implementation of one-way costs shifting.
• The operation of the new MoJ RTA process will be reviewed before a decision is taken on whether to retain this and/or extend it to employers' and public liability claims. Such a review is likely to include a review of the fixed costs available under the system, with the suggestion being that the current rates may be too low.
• There will not be a blanket ban on referral fees, the argument being that they are a mechanism brought about by market forces and are just a symptom of a wider problem of controlling costs.

Consultation with all interested parties is of course to be welcomed. However, those keen to see a move towards implementation of the recommendations made by Jackson LJ are likely to have some time to wait, and may well be disappointed by the eventual outcome.

Tracy Head is a partner at Kennedys

Employment: promising overlap

One might think that an amalgamation of the employment law policies of the Liberal Democrat and Conservative parties would create a smorgasbord of chaos. However, a closer inspection shows that they overlap in several key areas.

Before the election, Lord Hunt, from the Conservative party, proposed the creation of an 'enterprise economy' by pursuing the repatriation of employment law to the UK; reviewing the employment tribunal rules of procedure (including raising the limit for deposits/cost awards, and imposing compulsory mediation for specific cases); extending the right to request flexible working; incentivising employers to find alternative suitable employment for potentially redundant workers; and amending the current 'service provisions changes' of TUPE.

For the Lib Dems, Lynne Featherstone set out the employment-related priorities as: name-blank application forms; mandatory equal pay audits for companies with over 100 employees; and a single rate of the national minimum wage.

But there is an overlap between the two parties. Both seek to amend the paternity/maternity regimes, extend flexible working rights, and want to strip the 'gold plating' from some regulations and EU directives. As in any new relationship there are areas which are ripe for conflict, and in the austerity era that approaches this is likely to be magnified as each minister seeks to mark a departure from the Labour politics of old. The new partnership may also seek to rein in the power of the trade unions, if they are perceived as impeding the economic (and possibly legislative) reforms which are inevitably on the horizon.

Philip Henson is a partner at Bargate Murray

Property: sunshine or dark clouds?

The ups and DOWNS of the housing market can be directly affected by government policy, so what will a Con/Lib pact mean for us?

1. Tougher and earlier cuts in the public sector will increase unemployment. This may upset the supply/demand balance as those without employment may have to sell sooner or conversely might sit tight and not move. This will vary geographically so areas with a higher dependency on the public purse '“ for example, the North East '“ may find this more challenging than those less dependent.

2. HIPs. Prior to the election, the shadow housing minister promised to do away with HIPS on day one. The Lib Dems are committed to abolition as well '“ although the manifesto promise is buried so deeply that it was challenging to locate. The new political landscape may change the reality. Will HIPs live to fight another day or will they be in the dustbin before you can say EPC?

3. Referral fees '“ that old chestnut. The LSB has this on their agenda. The former shadow justice secretary, Dominic Grieve, made plain his distain for their payment, but, as Ken Clark now has

that brief and Dominic may be in the Attorney General's office, will the political pressure be greater or less?

If the coalition really does lead to stable government, general levels of confidence in the housing market may be subject to less speculative fluctuation than we have seen in recent times. Sometimes it seems that the press like to write about prices and levels of activity going up and down. When everything stays the same that's just too boring '“ even if it is better for the economy.

Jonathan Smithers is head of residential property at CooperBurnett Solicitors

Tax: take action now

For people banking on the Conservative party's £1m inheritance tax nil rate band as a solution to their inheritance tax liability on death, the scrapping of the proposal will no doubt be a significant blow. However, at least the government's plans for the nil rate band for the next few years now seem clear. Therefore, clients should be encouraged to revisit their inheritance tax mitigation plans as soon as possible. A client's current inheritance tax exposure can now be calculated with comparative certainty and clients should be more receptive to proceed with strategies to reduce their inheritance tax exposure.

Clients should also be put on notice that the rate of capital gains tax will increase substantially and should be encouraged to review their assets to consider whether it may be better to sell, reinvest or gift now. Unfortunately, we do not know when the rate increase will take place. Although it is perhaps unlikely (as capital gains tax is an annual tax) the increase in the capital gains tax rate could coincide with an emergency Budget, which could take place as early as next month.

Any clients considering giving away non-business assets (e.g. second homes, buy-to-lets, investment portfolios) standing at a gain should decide what to do now and take action as quickly as possible while the rate of capital gains tax is relatively low. The window of opportunity to gift at a low capital gains tax rate may not be with us for long.

Ironically, the proposals will be a double whammy for those clients who realise that they now need to make lifetime gifts to reduce their inheritance tax liability and yet face the prospect of a much more significant capital gains tax bill if they make the gift too late.

Helena Luckhurst is a solicitor at Speechly Bircham

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