My first client of the New Year contacted me whilst I was in Central London for the New Year celebrations.

On New Year’s Eve, at 11.30 pm I was snug in my fleecy dressing gown, cosily watching the freezing crowds on the Embankment on television when…. we decided on the spur of the moment to dash there ourselves to see in the New Year!  We quickly got into some warm clothes and rushed into the cold. We arrived with our champagne and plastic flutes, just in time, because at midnight the London Eye was lit by the most spectacular firework display,- shortly after which my parents telephoned to say “We’re watching London on the telly but we can’t see you….!” Not unexpected in a crowd of hundreds of thousands of people!

The excitement of that night was sadly at odds with the new client meeting. The lady lives abroad and she too was in London for the New Year. She was about to divorce and, although she and her husband had separated on several occasions during the course of the marriage, this time it was final. She produced an agreement she had signed: a post-nuptial agreement.

Each time the couple had separated previously they talked about a financial settlement. On the last occasion they had decided to do something about it and instructed solicitors who negotiated a deal and drew up an agreement which my client and her husband then signed.

It wasn’t a good deal for the wife, of that there was no doubt. The husband was left with a large percentage of his wealth intact – more than would have been the case had it litigated – but the wife had wished to settle. Subsequently they reconciled again – but sadly they had now decided to permanently call it a day. Her husband had instructed solicitors to issue divorce proceedings. She wanted to know if I thought she was bound by the agreement.

The Privy Council, in a judgment given by the leading family lawyer, Baroness Hale, recently issued a decision on this point, in an Isle of Man case called McLeod. The law is the same as in England and will be binding in England. Although Mrs McLeod had signed such an agreement, she argued she should not be bound by it, as the provision it contained was inadequate. No matter said the 5-Judge Court, she had signed it, she had not been obliged to do so, and in the absence of any compelling reason to the contrary, they held her to it.

This case states the existing law. It does not make new law. A similarly intended document was not upheld by Mrs Justice Baron in the case of NA-v-MA where the Judge found there had been duress by the husband.

Talking to my client however, it seemed pretty clear, that she had been properly advised by her lawyers. There had been full frank and accurate disclosure of his financial position by the husband, and she had signed the agreement because, whilst she was advised and appreciated her settlement was low, she thought it would save her a great deal of money in legal costs and would leave her with a good relationship with her soon to be ex-husband.

She now clearly regretted her decision in the cold light of the New Year.

I advised her not to waste her money contesting the agreement. It is by no means certain that agreements however apparently unjust will be set aside. Indeed in one case involving a Tory grandee and his former wife Lady Anne-Marie Judge, she is appealing against the payout which saw Sir Paul Judge end up with 81 per cent of the assets. Lady Judge argues that as her ex-husband (perfectly legally) avoided making a substantial charitable payment that had been factored in to his part of the settlement she is entitled to a larger sum. So far, notwithstanding the apparent injustice, she has been unable to persuade a court to set aside the original agreement.

Deciding when and how to settle is always difficult, particularly for women who frequently have less negotiation power and are frequently less commercial than their spouse. They often put themselves under greater emotional pressure, not fully understanding that “matrimonial assets” are there for joint and in many cases, equal division, and are not simply doled out by the husband, even if he has been the bread winner and she the home maker.

I would certainly advise a negotiated settlement between spouses, and one which saves money but I have found on too many occasions that people who settle for too little frequently come to regret it.

McLeod is a case which will make contesting a signed agreement even more difficult. So, if you are thinking about settling on less than good terms, and you are advised by your lawyers it is too low, then take your time, and consider whether in 12 months’ time you will be regretting your perhaps too generous decision. If you think you will, make the best New Year’s resolution you will ever make and resolve not to sign it until you are truly happy with the outcome.

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To my mind, the CSJ has jumped firmly onto a conservative (with a small c) bandwagon. I would go so far as to say that its proposals are reminiscent of the mindset of the American politician Sarah Palin, whose extreme opinions may have helped propel Barack Obama to victory.

You can read the CSJ’s report here. When I read Iain Duncan Smith’s comments about family law reform, my heart sank. They are acutely traditional and backward-looking. They indicate a refusal to face up to the overwhelming social changes that have affected millions of people and are here to stay. If this well-meant but unworkable report is really what the Conservatives may inflict on us if they win the next election, heaven help us.

So why do these proposals concern me so? Some are not too bad in theory, but are high falutin’, idealistic and incompatible with the real world. They will never work.

Take for example the idea that marriage should be preceded by “preparation classes”. I must admit that in 1992 I wrote a book suggesting that marriage, not divorce, should be made more difficult. I even trailed the idea of marriage classes in schools. Since then, however, I have become older, wise and much more cynical. Marriage classes are no longer necessary, because marriage is out of fashion. One reason for this is the increasing number of people who know that unmarried couples have no resort to law if a relationship breaks down. Divorced couples do: upon divorce, the law splits marital assets fairly between the couple and their children. For those who do not wish to create legal relationships and are reluctant to part with funds for their families, it’s a no-brainer.

Mr. Duncan Smith and his CSJ do not appear to have understood this. They want marriage to be de rigeur. They are convinced that by legalising prenuptial agreements – at the same time creating further unfairness, because the party most affected by an unfair pre-nup would have to prove that it should not be upheld – they can transform marriage into a more attractive option. Nonsense. Most people cannot afford to pay for a top lawyer to draft a pre-nuptial agreement, let alone have sufficient assets to render the process worthwhile.

No, Mr. Duncan Smith. What is actually needed, and what is blindingly obvious to everyone working in the field, is legislation to regulate relationship breakdowns when couples have been cohabiting but are unmarried. The Law Commission has been savagely criticised in certain newspapers for daring to suggest the need for new law, but its conclusions are right.

Once cohabiting couples are subject to legal obligations, and if there are additional tax breaks for married couples to incentivise marriage, then I am certain that we will begin to see an increase in the number of couples who choose to marry and a reduced number of children growing up within one parent families.

But then what? The CSJ has made alarming mention of reforming divorce procedure and “making divorce more difficult”. That sentiment takes me back to the dark days of 1996 when the last Conservative Government, under its well-meaning Lord Chancellor, actually changed the law. Divorce was intended to take longer, and the procedure was set to become increasingly complex. Ultimately – and to the relief of many- that legislation foundered.

I suspect that the CSJ has allowed its ears to be bent by London lawyers involved in Big Money cases. Generally, they are far more outspoken than their brethren across the country who know that day-in, day-out, the law works well.

There is one of the CSJ’s conclusions with which I agreed whole-heartedly: namely, the prospect of greater rights for non-resident parents and grandparents. At the same time I question how workable these additional rights for grandparents would be, in practice.

The report is well-meant, but behind the times. When, oh when, will we have fearless legislators who and tackle our social problems with workable solutions?

I was interested to read an excellent article called Pre-nuptial agreements – a rethink required in this month’s Family Law journal. By Christopher Sharp QC of St John’s Chambers in Bristol, it contains an interesting review of the law in that area.

He begins with the famous case of Hyman v Hyman in 1929, where the House of Lords ruled that two parties could not agree to exclude the jurisdiction of the court, a position which remains to this day.

It means that in England and Wales, a prenuptial agreement will not be automatically upheld. Instead, an agreement of this kind is a matter for the court to take into account.

Since then various cases have sounded judicial warning bells, with judges questioning this approach, while informed judicial thinking has no doubt helped to shape the recent reference to the Law Commission who are examining whether a change of law is required to make these types of agreement automatically legally binding.

Mr Sharp canters through current law, including some well known cases such as Crossley v Crossley,(2008) 1FLR1467, where predictably the Court of Appeal indicated it was likely they would uphold the agreement, recognising that each party was in their own right a multi-millionaire, several times married and divorced. As I have previously posted, unfortunately the court only had the opportunity to withness intitiall skirmishes, as Mrs Sangster did not wait for the final ruling before abandoning her challenege.

It is clear that parties to a PNA should not assume they are unlikely to be upheld. To the contrary, it seems clear that PNA’s will be upheld – or at least parts of them -provided they are not unreasonable.

For example, In Ella -v- Ella (2007) 2 FLR 35 the PNA stated that in the event of a dispute, Israeli law would apply. Although the couple were resident in England at the time of the divorce, they had married in Tel Aviv and retained close links with Israel. The English court ordered the divorce to be heard in Israel, even though the PNA had been drafted by the husband’s lawyers and the wife had received no independent legal advice.

The issue of fairness in drafting the PNA was at issue in K-v-K (2003) 1FLR120, where the wife was pregnant at the time she signed the PNA. From a religious background and desperate to marry as a consequence of the pregnancy, she entered into the agreement with her future husband, on less than beneficial terms although she was at the time legally advised. When the marriage ended, she was held substantially to the terms of the PNA. Her pregnancy apparently was not regarded as sufficient to nullify the finding “she signed it without pressure.”

Contrasting opinion prevailed in J-v-J (2004) 1FLR1042, where the PNA, which was signed on the eve of his wedding without full legal advice to the future wife, was not upheld. The court felt that the husband’s actions in hiding his assets, and the PNA not having regard for the arrival of children, rendered it without force.

Mr. Sharp advises how best to ensure that if a court has to reach a decision upon such an agreement, how the agreement can be effective. A wide range of factors have been identified as pertinent, ranging from duress, time, disclosure, independent and competent legal advice beforehand, to the provision for regular reviews and equality of bargaining power.

He adds that as there is no certainty that a PNA will be upheld, because they are not automatically legally binding people have to resort to litigation to test them. I would argue this is a positive process, as the Court retains its right to consider the terms within the context of an overall s25MCA 1973 exercise, in pursuit of a fair result for both parties.

It is certainly my experience that with very few exceptions indeed, (such as previously divorced parties of equal wealth wishing to protect their respective children’s inheritances) PNA’s are by their very nature manifestly unfair and biased in favour of the paying party, otherwise they become redundant. They are signed at a time when the weaker party is emotionally unfit to act and by then his or her hands are tied;- they don’t want to jeopardize the marriage, especially if the wedding date is almost upon them.

It is becoming commonplace to require at least three weeks before the wedding for a PNA to be signed, as an acceptable time limit. Yet three weeks before a wedding, a great deal of arrangements have already been made – the guest list is complete, the honeymoon is booked, the dress purchased, the flowers, the reception, the food and drink all paid.

In other words, three weeks before the wedding, the not insubstantial costs have already been incurred – it is not is not nearly long enough in advance of the wedding and for the weaker party, worried about the legal consequences of jeopardizing the commercial arrangements for the wedding, it is far easier to concede and sign, than not.

Arguments have been made that the PNA should form a “bridge” between civil and family proceedings with automatic legal recognition of a PNA. However, in commercial transactions both parties are not emotionally tied, they negotiate at arm’s length and importantly, for value;- both stand to gain from the deal. In the case of a PNA, the weaker party stands to lose and would do so twice over if a legal hurdle were put in place.

Furthermore it is argued, we should bring our law in line with other member states of the EU and accept them as a part of our family law framework? I don’t see why we should – we retain our independent thinking in relation the rest of our family law, so why harmonise here?

Finally, should a PNA be legally binding because of social concern that marriage is declining? Does the fact that PNA’s are not automatically binding stop people getting married?

I would say not. Rather I believe it is far better that fairness which is the aim of our family law arising out of our peculiarly English championing of the underdog, stays that way.

An open letter to Rt Hon Gordon Brown MP, Prime Minister.

Dear Prime Minister,

Joshua Rozenberg interviews the Chairman of the Law Commission in today’s Daily Telegraph. Three family law matters are touched upon: reform of ancillary relief law, pre-nuptial agreements and cohabitation law reform.

I note that there will be no reform of the law in relation to the division of a couple’s assets. The courts will continue to apply the Matrimonial Causes Act 1973 and I’m pleased about that. As a family law solicitor, I approve of the discretion given to the judges: it helps couples across the country who don’t have “big money”. I am very much against the equal division of assets as in other countries, because there are occasions when 50:50 cannot be fair. No two cases are the same.

I also note that the Law Commission will be examining the legal status and enforceability of pre-nuptial agreements. I can’t think why valuable public resources are going to be spent helping the very rich to protect their assets.

In other countries, a pre-nup is usually drawn up by the wealthier partner so that his or her legal obligations can be dispensed with. It is a gun to the head at a time when the future spouse is emotionally unfit to negotiate a commercial bargain. Thus pre-nups cannot be compared to commercial contracts, negotiated at a distance by willing parties who each stand to benefit equally from the agreement.

At present, pre-nuptial agreements can be upheld in this country – but importantly, judges aren’t legally bound to do so. Reverse this balance, and it will be for the poorer spouse to mount the challenge. In the US, unscrupulous spouses can insert clauses into these agreements to ensure that if a challenge is made, the payment is immediately reduced to nil. In such circumstances, the poorer spouse can come away with little or nothing.

Here in England and Wales, a pre-nuptial agreement is likely to be upheld if it is properly drafted with full disclosure, with both parties receiving sound legal advice before signing. Legislation isn’t necessary.

So why spend time and money on this review? Beats me – particularly as any proposed changes would not become effective until 2014 at the earliest!

Instead, Prime Minister, why don’t you do the right thing and introduce legislation to help millions of cohabiting couples and their families? The Law Commission put forward its proposals last July; the legislation is ready and waiting for your draftsmen.

This would be a courageous landmark decision on your part and it is desperately needed. Only this week, I had to advise a woman with a family that her remedies in law were almost non-existent. Like other family lawyers, I am encountering such cases with increasing frequency.

Please assist these people. We can’t stop people living together – but with reforms proposed for pre-nuptial agreements, it appears that the Government is only going to help the “haves”. What about the “have-nots”?

Yours sincerely,

Marilyn Stowe

Senior Partner, Stowe Family Law LLP.