I am no fan of The Centre For Social Justice, but Harry and I share some common ground. We both support marriage. Like him, I also support efforts to save marriage – although by the time I become involved, it is often too late. At the Oxford Union, although I was happy to argue that the institution of marriage was “outdated”, I didn’t argue that there is no point to marriage.

Recently, however, I’ve started to move away from my usual position. Seeing new clients recently, I have noticed that a high proportion of our new instructions are from clients who have already been married at least once before, and who are determined to end a second or a third marriage.

We already know that a second marriage is slightly more likely to fail than a first marriage. Even so, the proportion of instructions is significantly higher than usual.

Is this a coincidence? Or has the recession hit such couples particularly hard? Many of these clients have told me of depleted asset values, higher debts, failed businesses and so on. Perhaps the economic downturn has affected the prospects of marriages which, statistically, have always had a higher failure rate. Perhaps these marriages would have ended anyway.

I have begun to wonder: is a second marriage genuinely worthwhile? Or should couples be advised against second marriages, partly because of the increased probability of divorce, but also because of the potentially serious fallout if the marriage does fail?

In my experience, the recipe for the breakdown of a second marriage is often as follows:

• The parties have children from a first marriage, and perhaps grandchildren too.
• They had not known one another for any great length of time before getting married.
• They have high expectations for the marriage and for their new partner, which remain unfulfilled.
• Within a short time, each party realises that the second marriage was a huge mistake.

In some cases, the breakdown of the marriage is prompted by guilt: at least one of the spouses has left a partner to start again. That guilt, coupled with a desire to be with children who may have rejected them and are now growing up without them, can sound a death knell for a marriage. Too much bad blood. Too much blame. Too much baggage.

Some second marriages break down because the gilt on the gingerbread wears off faster than it did the first time around. Once the courtship is over and the ring is on the finger, spouses stop playing the roles of Sir Lancelot and Queen Guinevere.

It also strikes me that in many cases, the parties are less dedicated to working through their problems than they might have been the first time around.

Perhaps they are bruised by past experiences, and are quicker to accept that leopards don’t change their spots, or that the marriage has indeed broken down irretrievably. Either way, they certainly seem to instruct lawyers more briskly than “first marriage” couples. Hence I am seeing broken second or even third marriages, for which the marriage duration has been that much shorter.

It gets worse.

When a second marriage breaks down, the consequences can be more acute than the parties suppose. After all, if it’s a relatively short marriage, then surely the financial settlement can’t be that bad?

Unfortunately, as I’ve explained previously, it really can be that bad. The parties are older, and their reasonable needs must be fully considered and provided for. Marriage turns two people into a legal partnership. Assets are up for division and, where needs must, assets acquired before the marriage cannot be fully ring fenced. Divorce can often require the wealthier party to make provision for the poorer party, for the rest of that person’s life. This can mean provision of a mortgage-free home and maintenance or a lump sum, sufficient to last a lifetime.

Clients are aghast when they learn that following a short marriage of say, five years, they may have to pay what they consider to be a disproportionately high settlement. In a lot of cases, clients have spent their lives prudently accruing wealth and, until the marriage, almost all had been destined for their children and grandchildren.

In many cases, a second marriage has seemed to me, an objective bystander to be an almost bizarre, and clearly avoidable, mistake.

So would I recommend marriage the second time around… ever?

I’m not so sure that I would. A marriage founded upon guilt, or upon unrealistic expectations, can founder. Once the romance has worn off, what is left?

Taking a detached, legal perspective, it is true that there are tax breaks from which older couples can benefit if they marry. These can include inheritance tax and capital gains tax exemptions. But are these enough to offset the risk?

Some of you will think that a prenuptial agreement is the answer. Again, I am not so sure. Lawyers pitted against prenups will keep getting cleverer and cleverer, no matter how the law may change. It’s their job. Older and wiser, bitten once… Surely it is better to have the freedom to walk away, than to have to test the validity of a prenup, making reasonable provision by will for a former partner to avoid a claim on an estate?

Could it be that older couples, brought up to believe that marriage is the “gold standard”, are now discovering (again) that it isn’t?

We are going to examine the interaction of three recently published cases:

• Schofield v Schofield
• Traversa v Freddi
• Chandler v Chandler

We will also be looking at the Supreme Court’s decision in Agbaje v Agbaje. And if that isn’t enough, we’ll throw in CG v IF, a High Court case involving a divorce in Switzerland, for good measure!

Overseas courts and English pensions: Schofield v Schofield

From little acorns, big oak trees grow. Thus it happened in Schofield v Schofield, which recently made it to the Court of Appeal and was reported at the weekend. I do not doubt that this relatively small money case will have a substantial impact on the outcome of many transnational cases, which will probably involve assets of far greater value. I also believe that it has set out fundamental principles for lawyers to consider when dealing with English pensions, all over the world.

Schofield v Schofield has been reported at the same time as two other Court of Appeal cases, Traversa v Freddi and Chandler v Chandler, and I think it is fair to say that those two cases have contributed to its impact.

On the face of it, Schofield v Schofield involved relatively little in terms of assets or principles. A British Army soldier, serving in Germany, divorced in Germany. He had been married to a German woman, and the couple had three teenage children. The only capital the parties had, some £87,000, was divided equally in Germany. The German court had power only to order an equal capital split.

The wife worked in a chemist shop, earning a modest income. The husband was left with his own income, his share of the capital plus… his Army pension. This had a fund value of £280,000, but the German court acknowledged that it had no legal power to deal with it.

Overseas courts do not generally have jurisdiction over English pensions. This is a big problem for anyone divorcing abroad, where one of the assets is an English pension and potentially the most valuable asset of all, as in this case. It is one of the considerations to take into account when deciding whether to divorce abroad or in England or Wales. Equally it is a problem when the divorce is taking place in England and the pension is elsewhere, so it needs considering very carefully.

In Germany, the husband had thus managed to hold onto his pension. The wife didn’t give up – as the German court clearly intended she should not. However she had to come here to England for her remedy.

At first instance in this country, when the wife applied for leave to proceed for a pension share, her application was unsuccessful.

In another case, CG v IF (2010), Mr Justice Mostyn had already stated that in order for leave to be granted, an application had to be shown likely to succeed:

“In my opinion a solid/substantial ground will be shown where the court can confidently say that the probability is greater than or equal to 50 per cent that the applicant will achieve a substantive order were the matter to be tried.”

In Schofield v Schofield, Mr Justice Mostyn took the view that the income produced if a pension share occurred would be “paltry” and  was unlikely to have affected the original overall settlement in Germany. Accordingly he dismissed the wife’s application for leave to proceed in England, under Part III of the Matrimonial and Family Proceedings Act 1984.

Was Mr Justice Mostyn right? Er… no!

It is worth reading the law in Part III because it sets out, in chronological order, who can apply for a “second bite of the cherry” in England following foreign matrimonial proceedings.

Here is the procedure. Leave of the court is first required and is given ex parte without the other side knowing or being present. In giving leave, the judge must be satisfied that there is a substantial ground for the making of the application for the order. Let’s take a look at how it works in practice.

More than a “good arguable case”: Agbaje v Agbaje

Agbaje v Agbaje is a case about which I have written previously. Heard in the Supreme Court in 2010, it involved a husband and wife who were married for 38 years. They both had British and Nigerian citizenship, and the wife had lived in London since 1999. The couple divorced in Nigeria in 2005 and, out of assets of about £700,000 the wife was awarded about £21,000 and a property in Lagos.  She sought a “second bite of the cherry” in England, and the Supreme Court ruled in her favour.

When Agbaje v Agbaje was heard in the Supreme Court, Lord Justice Collins set out the threshold to be crossed before leave to proceed is granted:

“The principal object of the filter mechanism is to prevent wholly unmeritorious claims being pursued to oppress or blackmail a partner. The threshold is not high, but is higher than ‘serious issue to be tried’ or ‘good arguable case’ found in other contexts. It is perhaps best expressed by saying that in this context ‘substantial’ means ‘solid’.

Note that he made no reference to a “50 per cent” probability of success.

Assuming there is a “solid” claim, the Statute then sets out jurisdictional requirements to be considered, which means that the proposed applicant needs to satisfy the court that the court has jurisdiction based on domicile, or habitual residence or because there is a former matrimonial home in the jurisdiction. Then there is the duty of the court to consider whether England and Wales is indeed the appropriate venue. Section 16 (2) of the Matrimonial and Family Proceedings Act 1984 sets out the considerations for the court to take into account.

If all is well, leave is granted, the case goes to a hearing and the available remedies are those available to divorcing parties in this country.

Once granted, it is very difficult to set aside unless, in the words of Lord Justice Collins, a “knockout blow can be delivered”. In all other cases, an application to set aside will be heard at the same time as the full hearing.

(NB. Important warning to any would-be applicants: don’t remarry before you proceed or you won’t be able to do so!)

Part III is brief and isn’t difficult to understand. If you read it, however, you will not find Mr Justice Mostyn’s approach there. This omission was noted by their eagle-eyed Lordships in the Court of Appeal, led by Lord Justice Thorpe, who cross-compared Mr Justice Mostyn’s approach with the higher authority of Lord Justice Collins and declared it a no contest. So in the case of Schofield v Schofield, leave was granted.

Leave refused, then granted: Traversa v Freddi

The Court of Appeal, again led by Lord Justice Thorpe but sitting with Lord Justice Munby, was coincidentally giving judgement in another, very similar case at the time. Traversa v Freddi was a case involving a wealthy woman and a restaurateur from a relatively modest background who signed a prenuptial agreement in Italy, married there and divided their time between Italy and England. The marriage ended after 20 years and the couple divorced in Italy.  After the husband was ordered by an Italian court to pay his former wife maintenance and vacate the family home in London, he applied to the court in England for leave to vary the settlement.

When the case came before Mr Justice Bodey, he refused leave to the Italian husband to proceed in this country after the Italian case had been decided, even though it involved the husband’s home in England. Mr Justice Bodey did so because the Supreme Court had not yet handed down its judgement in Agbaye v Agbaje. He therefore applied the law as it was, not as it now is.

The Court of Appeal allowed the appeal in Traversa v Freddi and spent a good deal of time rebuking Mr Justice Mostyn for his approach in CG v IF. Lord Justice Munby described that approach as “doubly wrong”.

The Court of Appeal does not mince its words! Instead, in proper English fashion, it delivers caustic rebukes in elegant style! In Schofield v Schofield the Court of Appeal referred to Mr Justice Mostyn’s “gloss” and “trenchantly rejected” his interpretation of the requirements of the law.

Schofield v Schofield: a return and reversal

The Court of Appeal’s reversal of the decision in Traversa v Freddi provided one immediate reason to reverse the decision in Schofield v Schofield. The Court of Appeal also took the view that when compared with the £87,000 capital, the pension was in fact very significant.

So despite Mr Justice Mostyn’s conclusion, Schofield v Schofield eventually passed Lord Justice Collins’ test of “solidity”.

Perhaps more importantly for lawyers who followed the case with interest, Lord Justice Thorpe also made it clear that the case raises an important policy point:

“It does seem to me very important that, where a pension is rooted and funded within jurisdiction A and where the divorce is to be pronounced in jurisdiction B, with all ancillary issues decided according to the law of state B, it is very important that there should be judicial collaboration to ensure that the applicant in state B is not deprived of her entitlement to share in the pension rooted and funded in state A.  This case is a good example of one in which the German court has sought international collaboration and has implicitly called upon the English court to determine any issue of pension equalisation.”

This, it seems to me, is exactly what Lord Justice Thorpe has done throughout his career, particularly as head of the Family Justice Council. He has worked extremely hard to forge relations across the world with other judges and courts so that seemingly barred doors have been opened to obtain swift and, where appropriate, reciprocal justice for litigants.

The limits of cooperation: Chandler v Chandler

In Schofield v Schofield the German courts were looking to the English court for assistance, and we cooperated and provided that assistance. But let’s not get carried away. Cooperation has judicial limits. It does not mean we will ever go so far as to apply another country’s own law and perhaps save everyone the (extremely expensive) need to have two sets of court proceedings in two countries. In England and Wales we are committed to applying only the lex fori: the law of the country in which the case is heard.

The third of our recently published cases is Chandler v Chandler. In this case Lord Justice Thorpe, sitting alone, upheld the decision of Mrs Justice Baron and firmly declined to apply the law of Gibraltar to a divorce case:

“It is a very important feature of our relationship with the developing family law of Europe that we tenaciously uphold our principle that only the lex fori applies in the courts of England and Wales.  We have exercised our right to abstain from developing European family law that would require us to apply the law of some other jurisdiction.”

So Germany applies its law and we will apply ours. England and Wales will cooperate and we expect other courts to cooperate with us. That is as good as it gets. Unlike certain other countries, we do not routinely apply others’ laws to cases heard here. But is this right? That is a question for another post…

This post was selected for the 20^th March 2011 edition of Carnival of Wealth, hosted by Value Stock Guide and Carnival of Money Stories #98 – St Patrick’s Day Edition, hosted by Money Thinking.

Is change in the air? We think so – and would be interested to know if you agree. Stowe Family Law Settlements has already attracted media attention, and was launched in response to a surge in interest from Stowe Family Law clients over the past year.

As Marilyn Stowe has noted previously, the majority of Stowe Family Law cases are resolved outside the courtroom. We felt the time was right to set up a separate practice to focus solely on this area, and we are also hoping to build partnerships between Stowe Family Law Settlements and other law firms.

So what sets Stowe Family Law Settlements apart?

Well, one big difference is the way in which the firm combines mediation with family law expertise. Stowe Family Law Settlements is staffed by a nine-strong team of “lawyer mediators”:  trained family mediators who are also qualified and highly experienced family lawyers.

What do “lawyer mediators” do?

Couples meet in a neutral environment with a neutral lawyer mediator, who will provide a frank assessment and discuss the likely outcome of the case if it went to court. The lawyer mediator will then help the couple to arrive at a solution that suits everyone, and will also assist with drawing up a formal agreement that can be incorporated into an order.

At Stowe Family Law Settlements, our lawyer mediators are able to assist with a range of legal disputes including:

·         divorce and separation agreements

·         cohabitation agreements

·         child residence and contact disputes

·         grandparents’ rights

·         prenuptial agreements.

With decades of collective experience, the Stowe Family Law Settlements team includes members of family lawyers’ association Resolution and specialists in international law, cohabiting couples’ rights and cases involving children. The practice also benefits from the expertise of a forensic accountant, who can provide immediate information about finances and valuations.

Why now?

This innovative form of dispute resolution was once little-known in the UK, but is expected to increase in popularity. This is for two reasons:

1. From 6 April 2011, applicants for a court order in family proceedings will be expected, before making their application, to have considered with a mediator whether the dispute may be capable of being resolved through mediation. The court will expect all applicants to have discussed the case with a mediator before issuing proceedings and (except where exceptional circumstances apply) will expect any respondent to have attended a Mediation Information and Assessment Meeting, if invited to do so.

2. With one lawyer instead of two, the legal fees are often lower. Other benefits include the ability to resolve legal issues without the need for aggressive, stressful and time-consuming court proceedings. Couples are also able to maintain their privacy, because there are no court judgements to be made public.

Many couples split amicably and then find the stress of divorce proceedings drives a wedge between them. Most people don’t want to settle their differences in a courtroom or endure an unpleasant, protracted legal battle. They want to divorce, separate or resolve their legal disputes quickly and with as much dignity as possible, so that they can move on with their lives. Now, with increased pressures upon household finances, many couples are also looking to save money where possible.

More information

Locations: Harrogate, Cheshire and London.

Contact: call our practice manager, Morna Rose, on 0844 854 5421 or visit the Stowe Family Law Settlements website.

Ten good reasons for using Stowe Family Law Settlements

What you leave with

FAQs

James Thornton is a lawyer mediator at Stowe Family Law Settlements and a partner at Stowe Family Law’s Harrogate office. With 14 years’ experience, James’ specialisms include dealing with the financial issues arising from divorce, particularly when substantial personal, business or pension assets are involved. His expertise also extends to cases involving children. A former member of the Law Society’s Family Panel, James is an Accredited Specialist member of lawyers’ organisation Resolution, sits on the North and West Yorkshire Resolution committee and is a member of the West Yorkshire Family Justice Council.

He resembles his mother physically and he has her gift for connecting with people. He is a credit to his family. For me it was seeing Diana’s ring again – given as the greatest token of his love that I suspect Prince William could have given his future bride – that set me off thinking of Diana and the enormous love she had for her boys. That ring, I am certain, has created a deep well of emotion in all those people who are diehard Diana fans. Not forgetting those who simply felt sad for a motherless boy who, despite everything he has, has no mum to be there at such a wonderful time in his life. So he involved her in the best way he could: through her engagement ring, which he gave to Kate.

The story of how he carried Diana’s sapphire and diamond ring in his rucksack in Kenya for three weeks until he popped the question made me laugh. Yes, that’s just the thing a boy would do! (Even though I bet there were one or two bodyguards around to make absolutely certain it never got lost.)

In law, an engagement ring is treated as a gift to the future bride and she is entitled to keep it, unless it is made clear beforehand that it never becomes her property absolutely. Although I suspect that the latter has happened here, I have no worries for this couple. Vultures in the press are already circling, with some commentators suggesting that because of the failure of his parents’ marriage, or because it was his mother’s ring, the ring shouldn’t have been given at all. Nonsense. He loves its symbolism. Kate clearly loves it. Why wouldn’t she love it?

Others, recalling that Charles and Diana divorced acrimoniously, have urged Prince William and Kate to sign a prenuptial agreement, to avoid future marital rancour. Again, nonsense.

Apart from the distasteful nature of such waffle, in my view the existence of a prenup would likely exacerbate any future difficulties. The Prince of Wales clearly provided handsomely for the late Princess of Wales, whose needs were generously met without a prenup. There is no reason to suppose that this wouldn’t be the case for Kate in the future. She couldn’t expect anything more and I doubt Prince William would expect anything less.

I hope that unkind speculation does not put our future Queen under additional and unnecessary stress. As it is, she faces the prospect of an imminent state wedding knowing billions of people from all over the world will be watching her. As Mr Justice Mostyn put it recently in a speech to Parliament – and at that time he had no idea of what was coming – divorce lawyers should definitely not be present at a wedding.

Most lawyers will never put their own money on a racing certainty. But in this case, I am prepared to do so.

I do not doubt that this marriage will work. I think Kate’s parents’ solid marriage and their discreet but solid support for their daughter will help. I hope she always stays as close to them as she is now and doesn’t allow her altered status to affect her family relations. I doubt it, because those parents don’t strike me as the type to give up on her either. They appear to be the souls of discretion.

I watched the television interview in amazement as Kate revealed that, after Prince William had asked her father’s permission to marry his daughter, she didn’t know if her father had told her mother. How could she truly think he hadn’t told his wife such incredible news? The future King of England had proposed, their daughter had become a future Queen-in-waiting… and he hadn’t told her mother?

I tried to imagine myself in that scenario or in fact any scenario affecting my son, and not being told… I found it difficult. Then I suddenly understood that all that discretion, which exists even between family members, helps them to protect Kate in a world that is far removed from the everyday. It may also explain why Kate has never had a “proper” job. She couldn’t afford to risk ending up on the wrong side of any scandalous newspaper story.

So with parents like these, and a husband who is more like “one of us” than any other senior member of the Royal Family, I’d put the odds on a successful marriage at 100%. And if the delicate issue of a prenup is raised by a well-meaning but cautious courtiers, my advice to William and Kate is: bin it – and them – as fast as possible!

This week the Supreme Court is hearing the case of Radmacher v Granatino, with Mr Granatino arguing that the prenuptial agreement that he signed with his former wife, German heiress Katrin Radmacher, should not be upheld. English law does not automatically uphold a prenup. It is a factor to be taken into account in determining an overall settlement. We do not yet have law which automatically recognises pre-nuptial agreements and I, for one, have argued against such agreements becoming automatically legal. I far prefer judicial balance, to be weighted in favour of the underdog. I am content with the current position. Whether that remains the case after the forthcoming election remains to be seen.

What follows is Ashley Murray’s guest post about the case and its likely outcome. Ashley is Recorder and Barrister at Oriel Chambers in Liverpool: the home of the Beatles, Liverpool and Everton FC, the River Mersey, the Walker and Tate Galleries, the Albert Docks, “Scouse” (stew) and its people, famous for their unique sense of humour.

Ashley Murray has a practical, refreshing take on family law, which is why he makes a very good lecturer on the subject. In his post about Radmacher v Granatino, he discusses a different angle. He looks at women’s struggle for emancipation and the equality women have earned, in relation to all the factors to be taken into account in section 25 of the Matrimonial Causes Act. He emphasises the role played by Mrs Justice Baron in the original hearing before it went up to the Court of Appeal, and the pivotal role that will be played by Baroness Hale (above) who, I’m proud to say (because I am one too), is a Yorkshire woman.

Ironically, as he accepts, the Radmacher case is turned on its head because it is brought by a man against a woman.

I would love to be in the Supreme Court, listening to the arguments. I have considerable respect for both Richard Todd QC, who appears for the wife, and for ’Il Maestro’: the peerless Nicholas Mostyn QC, who appears for the husband.  That is not only because of the supremacy of his craftsmanship as a lawyer and advocate, but because he also has that rarest quality: he treats every client with the greatest respect, every instructing solicitor in the same way and every case as his last. He is a giant amongst his superb fellow family barristers. And purely from a personal perspective, I hope he succeeds before the Supreme Court in this case.

Can there really be anything more to be said in advance of the Supreme Court’s ruling in the Radmacher v Granatino appeal? We have had articles, roadshows, podcasts, blogs and no doubt myriad legal tweets on the subject. In fact, in every which way and more that any copy can be squeezed out of the issue of prenuptial agreements, we have seen the great, the good and the not so good have their shot. Now that nothing more is left unturned about the decisions themselves, we have even more column inches about what the Supreme Court’s decision may turn out to be. Is there no end to this?

Does this, actually, tell us something more about our profession than the subject of pre-nuptials?  Is there more than a little anxiety around that the work increase experienced by many ancillary relief practitioners over the last two decades is on the decline? Do all these practitioners writing on the subject really have a burning passion to contribute to the jurisprudence of the subject or is it, in reality, more of a jockeying for position to attract what is seen as the best bet for a new source of revenue since White (2000)?

Buried in the hype, we read the noble-sounding comments that couples considering marriage are being put off by the present absence of the freedom to contract and the perception that we need greater harmony with the Euro zone on this subject. In fact – as I suspect most working practitioners silently recognise – this is complete rubbish, spoken by those with little knowledge of dealing with everyday divorce cases or symptomatic of having spent too much time in ivory legal towers several planets away from the everyday life of most of the population.

I can guess, confidently, that most people had no idea that they had been deprived for years by the fact that they could not enter into a binding legal agreement concerning their married state in advance of the marriage itself. Most of us have little prospect of real asset value for division at the end of a relationship anyway. The unpleasant truth is that prenuptial agreements are, whatever is said to the contrary, a device for the rich to remain rich – and usually the male of the species, at that.

If prenuptial agreements are again encouraged in the Radmacher appeal, then the great British public will have unleashed upon them a frenzy of legal activity to ensure that in every newly married couple’s home, whatever their financial status, somewhere next to the will and the building society book is stored the prenup. The prediction is that most of these agreements will wither on the vine, never to be looked at again unless a divorce occurs. Because they will not be reviewed frequently enough, the experience of many will be soured by the feeling that this was just another con of lawyers and an expensive con at that.

What better way to ensure an argument between two happily married individuals than to have to review a prenup every three years? Who in their right mind wants to be sitting round the kitchen table to debate about how better to divide what they have, just in case things don’t work out in the marriage after the wife announces she’s pregnant? I suppose the answer is, probably, those couples who would up to now, without any encouragement, have raised the issue of the prenup in the first place. And so we turn full circle and arrive back at the rich and wealthy and in most cases, although not in Radmacher’s case, the male.

It is sadly ironic that a device originally used more than a century ago, to protect the married woman’s possessions from the effect of the law of coverture (which gave the husband overall control over her assets), is now typically used by the husband-to-be or his family to protect his possessions from her claims to “fairness” in divorce distribution.

The increased awareness of the prenuptial agreement will, if not checked by strong safeguards, expose many more women to an unfair and, at times, overbearing pressure in the run-up to the wedding ceremony, when their minds may not be focused upon securing a certainty of financial outcome in the event it all goes wrong.

It appears that the woman judge in the first instance decision of Radmacher’s case (Mrs Justice Baron) and Baroness Hale in Macleod’s case (2008) clearly understood this reality. It also appears that the Court of Appeal in Radmacher just did not get it, if their apparently dismissive approach to the need for independent legal advice is anything to go by.

Indeed, it is instructive that for all his commercial experience, the husband in Radmacher’s case surely succumbed to the very pressures of signing up as mentioned above. With his background, he would have been the first to have warned any of his office associates to get the right advice before doing so.

Women have had a long and tortuous struggle in our family law jurisdiction to complete the reforms started in the middle of the 19^th century for the right to stand shoulder to shoulder with men at the start of the 21^st century, in the process of the section 25 statutory exercise in divorce. Of course, reading the Court of Appeal’s judgment in Radmacher, the more cynical may say that we were witnessing a politically motivated decision with a view to forcing the issue in advance of the Law Commission’s report on the same subject.

Fortunately for women, Lady Hale and Mrs Justice Baron may yet have the final say.

Ashley Murray is Barrister-at-Law at Oriel Chambers in Liverpool. One of the limited number of senior Circuit specialists outside London with a recognised big money ancillary relief practice, he is known for his knowledge and ability in this area of the law.

Image credit: The fabulous painting of Lady Hale is by June Mendoza: one of the world’s foremost portrait painters. You can see more of her work here.

This was the subject of my talk on Thursday evening, when Stowe Family Law and Lane-Smith & Shindler, a firm of specialist trusts and estates practitioners based in central Manchester, held a joint seminar (above) at the Marriott Hotel in Hale Barns. The audience comprised of retail and private banks, accountants, investment managers and IFAs.

Speakers from both firms discussed the impact of relationship breakdown on family wealth, and advised on steps to protect family wealth. Marilyn Stowe spoke about the changes in ancillary relief law over the last 10 years, which have led to far larger payouts to spouses in big money cases. Geoffrey Shindler of Lane-Smith & Shindler explored the impact of this change in the law on family trusts, and described how trusts could be vulnerable to different forms of attack from spouses. Paul Davies of Lane-Smith & Shindler explained how different drafting techniques can be used to provide added protection to trusts.

I chose to speak about the rise of prenuptial and postnuptial agreements to their current status, and described the mechanics by which the agreements are constructed. At the time of writing, such agreements are extremely influential on decisions made by our family courts in England and Wales.

Because of the level of interest in this talk, and the question and answers that followed, we are reprinting the accompanying handout here. If you are considering a prenuptial or postnuptial agreement, we hope that this information is useful. This is an area in which Stowe Family Law specialises, so you can always leave a comment or contact us directly with any additional queries.

Prenuptial and postnuptial agreements: are they any good?

A recent seismic shift in the law

Historically, the UK courts, and UK legislation have paid scant, if any, regard to pre-nuptial agreements. However, the UK courts have, over several years, radically changed their views, largely as a result of changing attitudes within society. In particular, there have been three cases during 2008 and 2009 that have changed the landscape.

Where are you without one?

Usually in court! The courts have wide discretionary powers, and they take into account a whole host of factors, so therefore the results are very hard to predict. Delay (18-24 months is not unusual). Very significant legal costs. The starting point is capital split 50:50, but there can be departures from this. There may also need to be a substantial division of future income.

How effective are prenuptial agreements?

Legally: A prenuptial agreement cannot completely exclude any involvement by the family court. However, a properly done agreement will carry substantial weight with the courts. It was said to be: “A factor of magnetic importance” in the 2008 Court of Appeal case of Crossley v Crossley (involving a ‘career divorcee’).

Psychologically: The agreement will manage expectations. Who would risk trying to get out of one?

What makes an effective prenuptial agreement?

1. Independent specialist legal advice – on both sides.

2. Financial disclosure.

3. Reasonable financial provision

4. Not at the altar!

…although there may even be a relaxation of those criteria

In the Court of Appeal case of Radmacher v Granatino in July 2009 the husband (the poorer party) had not received legal advice, there had been no proper financial disclosure, and the financial provision for the husband was not reasonable, yet the court still upheld the prenuptial agreement to a large extent. However, the husband is taking his case to the Supreme Court later this year.

Prenuptial agreements can be linked with the creation of Trusts.

This can add another layer of protection. The trusts can be created at the same time. Their existence would be disclosed during the negotiations for the pre-nuptial agreement. One should choose the legal jurisdiction for the trust carefully. Perhaps a selection? Dynastic trusts are better.

Are prenuptial agreements useful for everyone?

They are of considerable benefit where either or both of the couple are wealthy, or have very high incomes, or where either or both expect to acquire family money at some stage in the future.

Even if the couple are not wealthy and don’t expect to come into money, it may well be useful to have a short, low cost agreement which deals only with issues of principle, e.g. the parties will have shared care of the children.

Limited shelf life?

The value of a prenuptial agreement is likely to fall away after 20+ years of marriage.

Postnuptial agreements are even more influential than prenuptial agreements

Exactly the same concept as a prenuptial agreement,only done after the wedding. This can be done whether the marriage is in trouble or not. If the parties have independent legal advice, if they provide financial disclosure, if there is no duress, and as long as there is reasonable financial provision for any children, the House of Lords decided (in the Privy Council case of MacLeod v MacLeod in December 2008) that a post-nuptial agreement should be upheld: “However lacking in generosity the provision made for the wife…”. However, the family courts do still have power to vary them, so they cannot be seen as a guarantee of a particular result, particularly if they do not even meet the poorer party’s financial needs.

Keep them under review

If the family’s circumstances change considerably, the pre- or postnuptial agreement might need to be reviewed and altered. However a well drafted agreement can normally take account of most potential changes. There could even be a periodic review clause in the original agreement. However, even if the agreement does not properly allow for changes, or is not reviewed, it can still be of persuasive value to the court.

A word on cohabitation.

The government’s plans to change the current unclear and outdated law were shelved in 2008. It is not clear whether a Conservative government would take them off the shelf!

Cohabitation agreements, either before or after the cohabitation has actually started, can be drawn up in a very similar way to pre or post nuptial agreements, and can deal with the same issues. Similar procedures to the creation of pre and post nuptial agreements should be followed

They have not yet been fully tested by the courts, but they are likely to be highly persuasive.

Stowe Family Law is the UK’s largest specialist family law firm, with offices and divorce solicitors in London, Yorkshire and Cheshire.

With an outstanding national and international reputation, the firm provides a full range of private client family law services. Our divorce solicitors are praised by clients, the media and legal guides for their knowledge and expertise.

Marilyn Stowe and members of the Stowe Family Law team

It appears that there has been a huge rise in the number of people entering into prenuptial agreements, and on Thursday the BBC telephoned to ask if I could attend their studios in London for a live chat about prenups on Saturday morning.

However last Saturday was the “holiest” Sabbath Day in the Jewish calendar: the culmination of the penitential High Holy Days, which commenced with Rosh Hashanah (Jewish New Year) the weekend before and was followed by Yom Kippur (The Day of Atonement), which began on Sunday evening and ended last night. It is an intense period for reflection and self awareness. A period to consider what is right and acknowledge, no matter how hard it is, that which is wrong.

Reluctantly and with gritted teeth, after consulting with my conscience (aka my husband) and obtaining the expected response -“It’s up to you” – I regretfully declined the producer’s request. Instead, a cameraman was dispatched to my office, to prerecord an interview. “When?” I asked. “In an hour”, was the reply. It was a frantic afternoon but on Saturday, that recording went out every hour on BBC News and BBC News 24, throughout the day!

My comments were brief but I said I was against automatically legalizing pre-nuptial agreements, and would not marry if entering into one was a pre-condition of marriage. I also said that I thought the emphasis should switch from divorce reform to marriage. I was pleasantly surprised to receive many comments from people who went out of their way to say they fully agreed with what I had to say. It seems to me from the brief snapshot I received that “Middle England” could well be as concerned about the ease with which people enter into marriage as I am, and furthermore, finds the concept of legalizing unfair documentation, burdening still further the weaker party, morally repugnant;- adding more money in the lawyer’s pockets.

So was the decision to uphold Ms Radmacher’s prenuptial agreement morally right? But given recent indications from the present and likely future Governments that these agreements will be given full force of the law in the future, do moral considerations of “Middle England” even matter?

My comments on the BBC attracted some public thought-provoking comments. I entered into an interesting correspondence with Nick Gulliford, who blogs at School and Family Learning, about prenuptial agreements and the recent Every Family Matters report from the Centre for Social Justice. The subject also prompted a blog post from His Grace, Archbishop Cranmer, which has attracted dozens of comments and responses. They are also against the legalization of pre-nuptial agreements, although for different reasons.

I promised to think about the points raised and I have. Nick Gulliford and His Grace say that I am missing the point about prenuptial agreements. They raise the question of marriage within a religious context, of the entry by parties into a covenant, of the sacred nature of marriage and the indissolubility of marriage unless by mutual consent. Their argument does not seem to me too dissimilar from the Jewish religious position on divorce, wherein marriage may only be dissolved by mutual consent. It is a deeply religious perspective.

In The Times, Libby Purves puts forward a different point of view. Like Baroness Deech, these modern career women have deliberately narrowed their gaze to a few high profile cases. Like Baroness Deech, Ms Purves also seems to have missed the wider picture. It is fine to be ‘modern’ i.e. unafraid to criticize members of your own sex, if you are bright, affluent and have fantastic career opportunities in your own right. It is easy in those circumstances to call other women “greedy” and simply dismiss their cases. But what long term impact will their words have on divorce reform for tens of thousands of less wealthy but wholly dependent women who do not have the same career opportunities and never will have, innocently caught up in a hostile climate of media inspired change? Can’t they see the elephant trap they appear to have tumbled headlong into?

***

On Sunday, approaching the start of Yom Kippur, I read a very moving newspaper column written by Chris Woodhead, the former Chief Schools Inspector.  Mr Woodhead, who has motor neurone disease, wrote bravely and objectively about his condition and the likely nature of his death. I noted how, despite the ravages of his cruel illness, he savoured the pleasures that we often take for granted. He described the heightened beauty of the scenery around him and wondered if he will be here next year to enjoy it.

The Yom Kippur fast lasts for 26 hours, during which time no food or drink may be consumed. It is far from easy, and the thought of it coming up makes most people anxious. Can they do it? One friend of mine stops drinking coffee the week beforehand, to try and avoid a headache over a very long day. My preparation is a little different, and draws upon my years of running. I usually work out harder over several exercise sessions before the day. It’s about mental and physical endurance. I do more miles on the Wattbike, at a faster pace and with greater resistance. I reckon that if I can push myself that far, I can do the marathon, 26-hour fast!

This year the fast began at 6.30 pm on Sunday and ended at 7.39 pm on Monday. It always starts off okay but, as the hours slip by slowly and painfully, you do begin to feel rough and your head begins to throb. I don’t miss food, but I do miss drinking as I normally drink a lot of water. I went to visit my mum. It was a five mile walk and after 22 hours without food or drink I don’t recommend it – but I went to make sure she was ok. She was fine. Collapsed on her sofa, I wasn’t!

Later all my family sat down together to eat at my sister’s home. My sister-in-law, who lives on a farm, told everyone how she and two of her grown up children had gone for a walk in the afternoon. Exhausted, they had flopped down together in a field and watched the red kites circling overhead. She said that the countryside had never looked more beautiful to her. We talked about Chris Woodhead and how bravely he is facing his final journey. He has certainly inspired this family.

At the end of this lengthy, thought-filled and exhausting weekend, I have as promised thought about all the arguments. And my opinions about the continuing need to encapsulate fairness in the law? The need to truly temper justice with mercy? The need to protect the weak from the strong? The need to retain discretion? The need to respect but not necessarily to follow other countries legal systems?  No change.

Image credit: RonAlmog.

From the comment pages of The Independent, 03/07/09.

No longer the capital of divorce

By Marilyn Stowe

Yesterday, I thought about placing a bet on the outcome of the Radmacher v Granatino case. I would have backed the outside chance that the Court of Appeal would uphold the pre-nuptial agreement, even with all the odds stacked against me.

English law doesn’t automatically recognise such agreements. It is about needs, obligations and distributing assets and income fairly. Yet, I thought, times have changed. We are living in a European country. English law gives the courts discretion to reinterpret the law. Would the same judges who once pooh-poohed pre-nuptial agreements dare to change their minds? They did. Continue reading >

The spoils of war

By Richard Tomkins

Pre-nuptial agreements may lack romance, but at least they make divorce a less messy business. That’s the theory, at any rate – the problem is that English law is almost unique in refusing to recognise them. Isn’t it time we made breaking up easier to do?

(Extract)   Pre-nups may seem the ideal solution to the vagaries of the English divorce system, and Resolution, which advocates a non-confrontational approach to divorce, is strongly in favour. But not everyone is as enthusiastic. The most common criticism is that pre-nups are “unromantic” because two people who really love each other don’t go into a marriage wondering whether it will last. The Church of England says: “Christians believe that marriage is a gift from God. In the marriage ceremony, the couple make a public declaration of a life-long commitment to love one another, come what may. To anticipate a marriage’s breakdown before it has even begun completely undercuts its Christian basis.”

Marilyn Stowe, a high-profile divorce lawyer with her own firm, Stowe Family Law, says strains may arise where, as is typically the case, the pre-nup is imposed by an economically stronger partner on an economically weaker one. “Personally, I wouldn’t marry a person who wanted to impose one on me,” she says. “If you knew that your spouse, whom you were supposed to trust 100 per cent, had imposed that on you, wouldn’t it affect the marriage from the beginning? And if the agreement was for a period of years before it came up for review, wouldn’t you be thinking about what was going to happen at the end of that period – whether you were going to be chucked out?

In spite of her personal views, Stowe has drawn up many pre-nups for her clients and has no objections to them in principle. She does, however, object to the idea that they should become legally binding. At the moment, she points out, although the courts will look at a pre-nup, they will not be bound by it; instead, the burden of upholding it falls upon the party who stands to gain most from it. “And I think that’s fair, because if the person who wants the pre-nup and stands to benefit from it still has to persuade the court that it’s fair and reasonable, then that strikes the right balance. If you reverse that burden, then it becomes doubly unfair to the recipient.”

Click here to read the feature in full.

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.