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7 July 2014

House of Lords backs bill to make pre-nups binding

Peers have given their backing to a law making it easier for divorcing couples to resolve financial issues and make pre-nuptial agreements binding, reports The Law Society Gazette.


The Divorce (Financial Provisions) Bill, introduced by Lady Deech in February, received its second reading in the Lords on Friday.

It amends the Matrimonial Causes Act 1973 with a provision to make pre- and post-nuptial agreements binding.

The bill would also share the net value of matrimonial property equally between the parties and limit to three years the length of maintenance payments.

Deech said the area ‘desperately needs public and parliamentary input’ as the law has been developed by judges creating ‘uncertainty in application’.

It will, she said, reintroduce ‘transparency, democracy and understandability’ to the law when marriages end.
Deech said the removal of legal aid for most family cases makes the bill ‘urgent’, as ‘hundreds of thousands’ of litigants in person are turning up at court with no clear law to guide them.

‘Divorce itself is not much more than an administrative process, over quite swiftly, but the division of property and assets between spouses is often contentious, drawn out and expensive,’ she said.
She said the leading judgments in the field arise from ‘big money’ cases that are not necessarily helpful for low-income families.

Under her bill, Deech said there ought to be ‘far less need for lawyers’, at least until the point of court appearance, and far fewer court hearings.

‘It has the potential to save millions in litigation costs, whether met privately or by the state. It will give a sensible basis for starting mediation and negotiation. It will restore some dignity, certainty, economy and clarity to family law,’ she said.

Peers including the former lord chancellor Lord Mackay of Clashfern, the former deputy president of the Supreme Court, Lord Hope of Craighead, and broadcaster Lady Bakewell spoke in support of the bill.
High-profile divorce lawyer Lady Shackleton also gave her support, stating that the law is ‘overdue for review’ because it relies too heavily on discretion. ‘This creates uncertainty; and uncertainty creates litigation,’ said Shackleton.

Former justice minister Lord McNally gave ‘qualified’ support to the bill, but said the government is currently considering its response to the Law Commission’s proposals in this area.

Justice minister Lord Faulks expressed concerns on behalf of the government with some aspects of the bill.
The current law on financial provision on divorce, he said, provides a number of important safeguards. Section 25 of the MCA states that the first consideration is the welfare of any child of the family. This section would be repealed by Deech’s bill.

Faulks said the bill may therefore weaken the protection given to children when their parents divorce.
He said the provision to divide property equally may be ‘potentially unfair and could cause hardship’, particularly for poorer families with children and the three-year limit for maintenance may also cause hardship and be ‘inappropriate for many couples’.

The bill will now be considered by the committee of the whole house.