So the dust has started to settle on the newly minted Law Commission report, after last week’s media flurry. There were several themes in the report that particularly caught my eye, but most of all was this concept of “bargaining in the shadow of the law”.
The report describes how the work of a family law solicitor is based on their experience, gathered over the years, on the likely outcome that a court might make in a case, and this experience enables them to provide their client with a likely bracket of settlement, and to guide that client to the safe harbour of settlement within this bracket.
Now that legal aid has been withdrawn and more individuals are self-represented, the difficulty with this traditional approach has been highlighted. There is no formula to apply to determine a right answer in a financial case. The conclusion is either (a) one agreed on by the parties themselves, with or without legal help, which they ask a judge to approve or (b) one imposed on them by a judge or arbitrator. Without the expertise of the solicitor to guide the client towards that anticipated bracket of settlement, that client will not be able to determine the likely outcome in their case if it were to proceed to court.
This issue is labelled as one of “transparency” in the report, which states “The two practical problems we are seeking to solve are the lack of transparency in the law relating to needs (leading to confusion and difficulty when people do not have legal advice), and inconsistency in the application of the law. Both could be resolved, or at least considerably ameliorated, if the Matrimonial Causes Act 1973 set out an objective to be met by provision for needs.”
The Law Commission has identified that the solution to the issue of transparency is guidance for all, setting out in plain English exactly what the objective of the law is when providing for needs on divorce. The issue is ultimately one of uncertainty. Any system which relies on a series of factors interpreted by one individual judge to determine an outcome is defined by discretion. Until the system itself is changed, there is a limited capacity for greater transparency. However, the report did conclude that a statutory recognition of nuptial agreements would be a good idea. Will statutory recognition of nuptial agreements provide greater transparency and take us out of the shadows?
In the recent judgment of Mr Justice Holman in the nuptial agreement case of Luckwell v Limata* he felt that in view of the imminent publication of the Law Commission report that the public needed to see how courts resolve these cases “on a case specific basis.” He also stated that “On the facts of this case there is only one consideration which is capable of having the effect that the agreements should not be applied rigorously and to the letter. That consideration is current and likely future need.”
Needs do not trump a nuptial agreement – but we are told they may outweigh it. The preparation of any nuptial agreement involves a careful analysis, from the shadows, of current and likely future need. It appears that family solicitors will continue to work in the shadows for some time to come.
*[2014] EWHC 536 (Fam)
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