Homemade separation agreements are a bad idea
By:3 commentsSeptember 28, 2017
I recall when I was practising occasionally coming across cases where, prior to consulting solicitors, the husband and wife had drawn up a written agreement purporting to set out an agreed financial/property settlement between them. Naturally, the parties (or at least one of them), would believe that the agreement was enforceable, setting in stone the financial arrangements following their separation/impending divorce. Sadly, they were usually quite mistaken, as such agreements are rarely worth the paper they are written on.
This was brought to mind by the case LFL v LSL, which I have already written about here on two occasions (there really was a lot going on in that case!). On Friday I referred to the problems that the district judge had with the husband’s McKenzie friend, after he refused to allow her rights of audience, and on Tuesday I wrote about the husband’s appalling litigation misconduct. In addition to these matters the judgment referred to a written agreement that the parties signed shortly before their final separation, setting out arrangements for money and property, including division of the husband’s pensions and a provision for the husband to pay maintenance for the wife at the rate of 300 euros a month.
In the event both parties argued that the agreement was of no effect, albeit for differing reasons. The husband, somewhat bizarrely, relied upon the document as a reason for not completing a form E financial statement, but at the same time claimed that he had signed it under duress from the wife, at a time that he was vulnerable (a claim not accepted by the district judge – “He did not strike me as the sort of person who would succumb to any coercion by the wife”). The wife, on the other hand, argued through her counsel that the document was of no effect because the signatures had not been witnessed, neither party had received any legal advice before signing it, there had not been any financial disclosure, and it did not take into account the wife’s pre-marital contributions to the marriage.
The district judge agreed that the document was of no effect, but it does still illustrate some of the problems that can arise when the parties try to draw up such an agreement themselves.
The following spring immediately to mind:
1) The issue of duress or undue influence. It is often the case that one party to a marriage occupies a dominant position over the other, or that for some reason one party is in a vulnerable position, for example through ill-health or perhaps financial difficulties. Without lawyers to protect and advise them, the ‘weaker’ party may be forced into agreeing a settlement that is clearly to their detriment.
2) Also mentioned above, there is the issue of financial disclosure. As any family lawyer will advise, no separation/divorce agreement should be entered into without full knowledge of the other party’s finances, and the value of all assets. Accordingly, both parties should make full financial disclosure before agreeing terms. It is highly unlikely that such disclosure will have been made without lawyers.
3) And then there is the third point raised by the case: the lack of legal advice prior to signing the agreement. Without such advice any court is almost certain to say that the agreement is of no effect, because the parties did not fully understand their legal rights before entering into it.
4) There are other problems, though, two of which I will mention. The first is the obvious one that the agreement will very likely not be clearly worded. Obviously, it is the duty of any lawyer instructed to draw up an agreement to ensure that it is clearly worded, so that everyone (including the court in any future proceedings) understands exactly what was agreed.
5) The other problem, in a similar vein, is that there is a very good chance that, without legal input, the agreement will be incomplete, for example omitting to deal with certain assets, or failing to mention an essential point, such as the dismissal of all other financial claims by either party against the other.
The moral is clear: if you and your spouse want to enter into a separation agreement, take legal advice and get it properly drawn up by lawyers!
The full report of LFL v LSL can be found here.
Photo by Leandro Martinez via Flickr under a Creative Commons licence.
September 28, 2017
Categories: Family Law