Matrimonial Property, Needs and Agreements (PRINT FILE) - Gov.uk

234 Pages·2014·1.55 MB·English

Matrimonial Property, Needs and Agreements

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The Law Commission
(LAW COM No 343)

MATRIMONIAL PROPERTY, NEEDS AND
AGREEMENTS

Presented to Parliament pursuant to section 3(2) of the Law
Commissions Act 1965

Ordered by the House of Commons to be printed on
26 February 2014

HC 1089
© Crown copyright 2014
You may re-use this information (excluding logos) free of charge in any format or
medium, under the terms of the Open Government Licence v.2. To view this licence
visit www.nationalarchives.gov.uk/doc/open-government-licence/version/2/ or email
[email protected]
This publication is available at www.gov.uk/government/publications
Print ISBN 9781474100168
Web ISBN 9781474100175

Printed in the UK by the Williams Lea Group on behalf of the Controller of Her
Majesty’s Stationery Office

ID 2625255 02/14 37356 19585

Printed on paper containing 75% recycled fibre content minimum

ii
THE LAW COMMISSION
The Law Commission was set up by the Law Commissions Act 1965 for the purpose of
promoting the reform of the law.
The Law Commissioners are:
The Right Honourable Lord Justice Lloyd Jones, Chairman
Professor Elizabeth Cooke
David Hertzell
Professor David Ormerod QC
Nicholas Paines QC
The Chief Executive of the Law Commission is Elaine Lorimer.
The Law Commission is located at 1st Floor, Tower, 52 Queen Anne’s Gate, London
SW1H 9AG.
The terms of this report were agreed on 5 February 2014.
The text of this report is available on the Law Commission’s website at
http://lawcommission.justice.gov.uk/areas/marital-property-agreements.htm.
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THE LAW COMMISSION
MATRIMONIAL PROPERTY, NEEDS AND
AGREEMENTS
CONTENTS
Paragraph Page
GLOSSARY ix

CHAPTER 1: INTRODUCTION 1
Matrimonial property, needs and agreements 1.1 1
The development of our project 1.9 2
Our conclusions 1.15 4
Financial needs 1.16 4
Marital property agreements 1.32 7
Non-matrimonial property 1.39 9
The structure of this report 1.41 9

Acknowledgements 1.44 10

CHAPTER 2: OVERVIEW OF THE CURRENT LAW 12
Introduction 2.1 12
The long road from 1969: the statutory foundation and evolved discretion 2.2 12
Matrimonial Causes Act 1973 2.2 12
Discretion pre-White v White 2.6 13
The White v White decision and its aftermath 2.10 14
The limits of sharing 2.19 16
The limits of financial needs 2.32 20
Our consultation and conclusions 2.56 27

CHAPTER 3: FINANCIAL NEEDS 28
Introduction 3.1 28
Consultation on needs in the 2012 Supplementary Consultation Paper 3.9 30
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Paragraph Page
Principled reform (Part 4 of the 2012 SCP): the options explained 3.9 30
Our consultation questions on principled reform 3.24 33
Consultees’ responses to our questions on principled reform 3.27 34

Compensation or merger over time? 3.27 34

Enforcing independence 3.46 38

Our conclusions following consultation 3.59 40

Our policy conclusion 3.60 40

Implementing our policy 3.69 42

Our recommendation 3.86 45

Content of the guidance 3.92 46

What are needs? 3.94 46

At what level should needs be met? 3.96 47

The duration of provision for needs and the transition to independence 3.105 48

The place of compensation alongside provision for needs 3.116 51

In conclusion 3.120 52

Looking to the future: could a formula be feasible? 3.121 52

The use of formulae in other jurisdictions 3.121 52

Formulae in family law in England and Wales 3.128 54

Consultation responses 3.132 55

The consultation events held in December 2012 3.148 59

Conclusions about formulae 3.151 60

CHAPTER 4: MARITAL PROPERTY AGREEMENTS 63
AND THE PUBLIC POLICY RULES

Introduction 4.1 63

The development of the current law 4.3 63

Contracts between spouses 4.3 63

Pre-nuptial and post-nuptial agreements and the common law 4.5 64
rule of invalidity

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Paragraph Page

Separation agreements and section 34 of the Matrimonial Causes 4.7 64
Act 1973

The public policy rules and the modern law 4.16 66

Our consultation question 4.21 68

Our recommendations 4.28 69

Abolition of public policy rule 1 4.28 69

Statutory provisions about maintenance agreements 4.36 70

CHAPTER 5: QUALIFYING NUPTIAL AGREEMENTS 73

Introduction 5.1 73

Qualifying nuptial agreements: in principle 5.8 74

Our consultation question and the responses 5.8 74

The empirical research 5.21 78

Discussion 5.25 79

The scope of qualifying nuptial agreements 5.42 83

The consultation responses 5.44 83

Our recommendation 5.68 90

Why a limitation on scope is necessary at all 5.69 90

The limit on scope: a prohibition on contracting out of needs 5.77 92

The draft Nuptial Agreements Bill 5.85 94

Qualifying nuptial agreements and the Inheritance (Provision for 5.93 95
Family and Dependants) Act 1975

Claims by a former spouse 5.96 96

Claims by a surviving spouse 5.100 97

CHAPTER 6: REQUIREMENTS FOR QUALIFYING 104
NUPTIAL AGREEMENTS

Introduction 6.1 104

The requirements for qualifying nuptial agreements 6.6 105

(1) Contractual validity 6.6 105

(2) Execution 6.32 109

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Paragraph Page

(3) Timing 6.42 111

(4) Disclosure 6.69 116

(5) Legal advice 6.105 123

Further requirements for the formation and content of qualifying 6.160 134
nuptial agreements?

A requirement of fair process 6.161 134

The content of the agreement 6.166 135

Conclusions on the form and content of the agreement 6.177 137

Variation of qualifying nuptial agreements 6.181 137

Revocation of qualifying nuptial agreements 6.188 138

Identifying property over time 6.192 139

Consultation questions and views expressed by consultees 6.197 140

Conclusion 6.210 143

CHAPTER 7: QUALIFYING NUPTIAL AGREEMENTS IN PRACTICE 144

Introduction 7.1 144

The uses of qualifying nuptial agreements 7.8 145

Jurisdiction and applicable law clauses 7.34 149

Review clauses 7.37 150

Qualifying nuptial agreements, ADR and family law arbitration 7.38 150

Arbitration agreements 7.38 150

What is family law arbitration? 7.39 150

Qualifying nuptial agreements as arbitration agreements 7.41 151

Inclusion of ADR provisions in a qualifying nuptial agreement 7.44 152

How is a qualifying nuptial agreement made? 7.45 152

The requirements for qualifying nuptial agreements 7.45 152

Contractual validity and execution 7.46 152

Timing 7.48 153

Disclosure 7.50 153

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Paragraph Page

Legal advice 7.59 155

What happens at the end of the marriage? 7.64 156

Tax considerations 7.66 156

CHAPTER 8: NON-MATRIMONIAL PROPERTY 157

Introduction 8.1 157

The case for reform relating to non-matrimonial property 8.11 159

The definition of non-matrimonial property 8.15 160

Consultation responses to our proposed definition 8.16 160

The family home as an exception? 8.27 162

Property acquired during cohabitation 8.37 164

Non-matrimonial property that changes over time 8.47 166

Can non-matrimonial property become matrimonial? 8.47 166

Property that changes 8.57 168

Moving forward 8.73 172

CHAPTER 9: SUMMARY OF RECOMMENDATIONS 175

APPENDIX A: DRAFT NUPTIAL AGREEMENTS BILL AND 180
EXPLANATORY NOTES

APPENDIX B: RESPONSES TO CONSULTATION QUESTIONS 207
NOT DEALT WITH IN THE REPORT

APPENDIX C: CASE STUDY QUESTIONS FROM THE 2012 SCP 214

APPENDIX D: SECTION 25, MATRIMONIAL CAUSES ACT 1973 217

APPENDIX E: RESPONDENTS TO THE 2011 CP AND 2012 SCP 219

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