Proposed changes to matrimonial legislation

On 27 February 2014 the Law Commission produced its long awaited report recommending changes to the law, including legislation to make qualifying nuptial agreements legally binding.

The changes are not limited to nuptial agreements. The commission calls on the government to fund the production of guidance from the Family Justice Council to inform divorcing couples as to how the courts will approach and decide their case based on their financial needs. They believe that this will provide a more certain outcome for people who are separating and address the regional inconsistencies that exist in the courts’ approach to issues relating to financial needs.

This concept of financial needs is relevant to nuptial agreements. If legislation is introduced, couples will be able to enter into qualifying nuptial agreements which will be enforceable as contracts, but will only be enforceable after the parties’ financial needs and any financial responsibilities towards their children have been met. Lawyers will need to ensure that the parties agree what their needs are and record this information in any agreement that is prepared. It may still be an issue that will be the subject of litigation at the time of separation.

The other formal requirements that are recommended are

• a valid agreement entered into without undue influence or misrepresentation
• a statement from each party to confirm they understand they are signing a deed which will partially remove the courts’ powers to make financial orders
• an agreement must be executed at least 28 days before the wedding or civil partnership
• both parties must have fully disclosed their financial situation
• both parties must have received independent legal advice.

The Law Commission has drafted a bill to give effect to their recommendations. It remains to be seen whether the government will act and introduce the legislation they recommend.