Marriage and Money
Last week the UK Supreme Court handed down two judgments on the same day, one of which was important.
The unimportant case was the wholly unsurprising decision in Owens v Owens. The Supreme Court confirmed that the Matrimonial Causes Act 1973 does indeed say what it says, and that a divorce is not available simply on the basis that the marriage has broken down.
That no fault divorce is not available without a separation period of two years appears draconian and wrong, but is neither news nor a major social problem. People such as the bloody-minded Mr Owens, who will contest a divorce to the bitter end, are fortunately few in number. Absent a dispute as to assets or child custody, and changing the rules on no fault divorce will not eliminate those, most divorcing couples will nowadays lie on the form, tick the box saying they have been separated for two or more years, and be able to go their separate ways. That the law requires this is silly, but not to the same degree as the pre-war world of requiring one party to be found in flagrante in a hotel in Brighton with a third party.
A far larger social problem is cost, not the silly rule. The divorce court fee is £550. This is in addition to the fees of solicitors (which in a non-contested case may be low if you shop around online.) This fee covers little more administration than the sending of a couple of letters. For the vast majority of people, and especially the poor, this is a far higher barrier to divorce. Many couples must choose to stay married for no better reason than that they cannot afford to pay not to be. As so often, in the real world it is the money that matters, not the rules.
The important ignored decision was Prudential Insurance Company Ltd v HMRC. This was significant for three reasons. First the decision was a surprise and will save the Revenue more than £4 billion (see paragraph 36 , this is probably a conservative figure because of the broad basis of the decision of the court). Second it is important within the technical and boring area of the common law of restitution, changing the position from that which was previously understood. Third the Supreme Court overturned the decision of the House of Lords from ten years previously, Sempra Metals v IRC. This third aspect is the constitutionally significant one.
As is well known, up until 1966 the UK’s ultimate appellate court, until 2009 called the Judicial House of Lords, could not overturn its own decisions. So, however wrong one of its own decisions was, the House of Lords, and lower courts, was bound to follow it. The justification for this position was that it increased certainty, and the legislature could always intervene. However, this was never very satisfactory. The distracted legislature enacts very few laws (although nearly twice as many per annum thirty to forty years ago as now) and does not fulfill this corrective role in any meaningful way. This led to the oddity that is the Practice Statement of 1966. This was surprising not for what it did, it had long been thought by many that the House of Lords should be free to overrule itself, but because the change was made not through the decision in a case, where it could form part of its ratio and hence the law, but by the court simply announcing it. Since then our ultimate appellate court has overturned its own earlier decisions by relying on the Practice Statement on many occasions (over two dozen times on my count).
However, the Practice Statement makes it clear that the court will remain mindful of the need for certainty and “the danger of disturbing retrospectively the basis on which contracts, settlement of property, and fiscal arrangements have been entered into and also the especial need for certainty as to the criminal law.” So, the House of Lords in Cambridge Water Co Ltd v East Counties Leather Ltd refused to overturn the ‘rule in Rylands v Fletcher’ not because it was correct, but because such a radical change would be, according to Lord Hoffmann, “inconsistent with the judicial function.” In Chartbrook v Persimmon the same judge refused to overturn the rule excluding pre-contractual negotiations for purposes of construction of a contract not on the basis that he thought the rule a good one, but rather because the Practice Statement was only supposed to be invoked in the small number of cases where the court was confident that the earlier decision was “impeding the proper development of the law or to have led to results which were unjust or contrary to public policy.”
What is surprising about Prudential Insurance Company Ltd v HMRC is not that the court overturned a decision of relatively recent vintage, that has happened before. Rather they did so first without having been asked to do so by the successful party, second by adopting an argument that was not made to them (although it might be said to have been a logical extension of an argument that was made), and third without invoking the Practice Statement. (For those interested in the finer points of the dust dry law of restitution, the relevant arguments of counsel for the Revenue are available online temporarily here from 1 hr 44min and here from 1 hr 29 min).
The court sought to justify their departure from the earlier authority on the basis that subsequent decisions had undermined it. So, it has now become clear that the CJEU was not as bothered about what the position was as a matter of UK domestic law as was once thought, it is now clear that the legislature is not going to intervene to correct the mess that is the English law of limitation, and some tangentially related subsequent cases don’t fit happily with the thrust of the reasoning in Sempra (see Prudential at -). However, the reason for overturning the earlier decision is, at root, that it was wrong and always was (see -).
At ultimate appellate court level there is a tension between acting as a law maker, and acting as a court so as to do procedural justice for the parties before them. The court’s role as law maker is constrained by the cases that come before it. It doesn’t matter how appalling and wrong an earlier decision may be, unless a case comes before them where it is challenged it will remain the positive law. So the (apparent) rule that a husband could not rape his wife was only authoritatively overturned in 1991, when a case finally came before the court. It is hard to believe the rule could have survived if ever challenged decades earlier. So, the temptation is to do the just thing, when the opportunity arises even if the litigants don’t ask you to be so bold.
In retrospect, the Revenue were too cautious in failing to challenge the earlier erroneous decision. This must by now have cost the UK a sum of money the mind cannot comfortably contemplate, enough to pay for all divorces for decades. In now overturning the earlier decision, the court has taken another step towards being a subordinate legislature, rather than an ultimate appellate court.