The value of a family business or business interest is treated as an asset and therefore part of the matrimonial pot to be distributed when it comes to negotiating a financial settlement on divorce or...
When meeting with clients to discuss their succession planning, many cannot recall whether their property is held jointly as joint tenants or jointly as tenants in common. The distinction is that with...
When the 1973 Matrimonial Causes Act was enacted Judges were required by statute to ensure that they exercised their powers to make financial provision on divorce that "...place[d] the parties [...] in the financial position in which they would have been if the marriage had not broken down..."
This was simply unworkable and in 1984 Parliament abolished this statutory requirement; but substituted no alternative in its place.
In a democracy, changes to social policy are a matter for debate by elected Members of Parliament, not adjudication by an unaccountable Judiciary. With successive Governments disinclined to enter the fray, the review of our 40 year old matrimonial finance legislation has been delegated to the Judiciary.
Radmacher v Granatino is the latest confirmation that the legal regulation of the family has become a matter for the Judiciary and not Parliament. Interestingly enough, the only dissenting voice came from Lady Hale, the sole family lawyer amongst the Supreme Court Justices.
With White andthen Miller; McFarlane the Judiciary imposed a de facto community of property regime that had never previously been the basis of English matrimonial law. Radmacher v Granatino now enables a couple to contract out of that judicially created regime.
Leaving to one side these jurisprudential niceties, where are we left following Radmacher?
Imposing contractual terms on personal relationships is now fine from a legal perspective; but it is less likely to be so from an emotional perspective.
As a nation we're culturally uncomfortable talking about money. But negotiating the terms of a pre-nup necessitates frank and difficult financial discussions in advance of a marriage about what should happen if the event of a divorce.
Pre-nups certainly aren't for everyone and many people are likely to be put off by the thought of negotiating their divorce settlement before they've even got married.
And even for couples who enter into a pre-nup, the story may not end there.
The Supreme Court has said that the Court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless it would not be fair to hold them to their agreement.
The Justices declined to lay down any guidelines regarding when exactly it would not be fair to hold the parties to their agreement other than:
- A nuptial agreement cannot be allowed to prejudice the reasonable requirements of any children of the family;
- Where the duration of the marriage renders what was once a fair contract unfair; and / or
- Where the terms of the pre nuptial agreement fail to meet the needs of the receiving party or properly compensate him / her for any financial disadvantage caused by the relationship.
The introduction of new legislation by Parliament often leads to a decade or so of litigation. The same is bound to be true of Judicial legislation.
White introduced fairness in place of "reasonable requirements". Radmacher now recognises the personal autonomy to contract into reasonable requirements and out of fairness.
Expect case after case to appear before the Courts with the financially disadvantaged trying to extricate themselves from "unfair" contract terms.
Sandra Davis is a Partner and Head of Family at Mishcon de Reya. She is a member of the firm's management board, a Fellow of the International Academy of Matrimonial Lawyers, the author of International Child Abduction (Sweet & Maxwell, 1993) and a member of the Lord Chancellor's Child Abduction Panel. In 2009 she was shortlisted in the Citywealth Magic Circle Awards as a Leading Lawyer.
The views expressed by contributing authors are not necessarily those of Family Law or Jordan Publishing and should not be considered as legal advice.