Legally Binding Pre-Nuptial Agreements, Equal Share of Matrimonial Assets and Maintenance for Only Five Years! - Is this the Dawn of a New Era in Divorces?

With Brexit dominating the political arena, one could be forgiven for failing to notice that in December 2018 the Divorce (Financial Provision) Bill had its third reading in the House of Lords and is continuing to make its way through Parliament.  

Such is the concern within the family law community that the Law Society Gazette reported earlier this month that Lady Hale, the President of the Supreme Court, had taken the highly unusual step of criticising the bill (https://www.lawgazette.co.uk/news/hale-risks-political-storm-by-questioning-legislation-before-parliament/5070911.article).

So what is it all about?

The bill, if it passes through parliament and becomes law, proposes to radicalise the way financial settlements are made on divorce. It seeks, in some respects, to pull the rug from beneath the discretionary feet upon which the family courts presently make decisions, potentially removing the uncertainty as to a spouse’s entitlement on a divorce.  

The family courts have a wide discretion to interpret current matrimonial law. Different judges will make different orders on the same set of facts. Indeed it has not been unusual even to find that different courts in different regions have different attitudes to certain aspects of matrimonial claims.  I confess that I have advised clients in the past to issue applications (for example where we are seeking maintenance) in a particular court because this may be more advantageous.

It may sound like I am making a case for the bill. I am not. Whilst superficially attractive, it does not bear proper examination. It is extremely dangerous to apply arbitrary rules to bespoke family circumstances. The fluid and flexible nature of financial awards enables fairness to be achieved for both spouses, ensuring that all contributions are recognised, whether that be the business owner that has created the matrimonial wealth or the home maker that has sacrificed their career prospects.

 

The bill seeks to include the following key changes:

• That pre-nuptial agreements, if meeting various conditions, should be legally binding. This really reflects the trend in the case law, such that if, amongst other criteria, you have entered into the agreement with full appreciation of its implications , you should be held to the agreement.
   
• That all matrimonial property should be automatically divided equally. Whilst at first blush this seems fair, in the words of Lady Hale it simply will not do justice to most cases.
   
• The (perhaps) most controversial aspect is the proposal to limit  spousal maintenance to five years. Spousal maintenance can be claimed in addition to child maintenance where child maintenance is insufficient to meet the needs of one spouse having in mind the standard of living they enjoyed during the marriage. It is often required to ensure that the children’s needs are met and that they do not end up with one ‘poor’ parent and one ‘rich’ parent.  There is a caveat to suggest that this would not apply if there were serious financial hardship – which is not too dissimilar to the current application of the law.  It is relevant that attitudes to spousal maintenance have already hardened over the past 5 years and with a proper strategy and good legal advice, a spouse should not now face a ‘meal ticket for life’ scenario. Those days are almost gone with the times.

On closer inspection of the bill, one might argue that the courts are already interpreting the law in a very similar way to the changes proposed by the bill. The courts already draw a distinction between matrimonial and non matrimonial property (eg gifts, inheritance and assets acquired before spouses have started living together – see my separate blog on the treatment of a family home purchased before marriage) and spouses are often held to pre nuptial agreements.

But there is a world of difference between enshrining these approaches into law and giving the court discretion in each and every case – because no one family is the same. So how can fairness and justice properly be achieved by imposing a single solution?


I am a specialist family lawyer and advise across the full spectrum of financial issues on divorce and/or separation. Please feel free to comment and to contact me should you have any further queries.