Author: Kate Pooler

You may have heard of a pre-nuptial agreement, or “pre-nup”, but you might not have heard of a post-nuptial agreementor “post-nup”. These agreements seek to do the same thing that a pre-nup does – to agree the financial outcome of any future divorce between you and your spouse – but the difference is that the agreement is entered into after marriage rather than before it.

A post-nuptial agreement has the same legal effect as a pre-nuptial agreement: provided that it has been done properly (both parties have had independent legal advice, they are entering into it freely, and are fully aware of its implications), and it would not be unduly unfair to apply its terms at the time of divorce, then it will be upheld in the event of any future divorce. The court tend to give them more weight than a pre-nup because the fact they have been entered into demonstrates an even clearer intention to be held to it (i.e. there is no impending wedding day which does place pressure on parties to sign pre-nups)

Some post-nuptial agreements are entered into very soon after the marriage, because the couple had been engaged in discussions regarding a pre-nup but had not managed to sign the pre-nup before the wedding.  If a pre-nup is signed very close in time to the wedding, it is best practice to reinforce and confirm the parties’ agreement with a brief post-nup in exactly the same terms, so that neither party can claim later that the pre-nup should not be relied upon due to it being signed late.

If you already have a pre-nup, you might choose to review the terms of your pre-nup years into the marriage, and your revised agreement would be a post-nuptial agreement. A review might be conducted to ensure that the terms of your pre-nup are still appropriate and fair, in the context of your married life now. If your financial or personal circumstances change considerably, for example you have moved country, or your health or your children’s health has become a factor to consider, you should take legal advice to “sense-check” the terms of your pre-nup.

Many couples enter into a post-nuptial agreement without ever having had a pre-nup. Scenarios in which a post-nup might be the best approach include:

• you are due to receive a large inheritance or gift, and you want to make sure that it would remain ring-fenced in the event of your divorce in future;
• you have set up a business during the marriage, or a business that you already owned prior to the marriage has increased significantly in value, and you do not want the future and continuity of that business to be affected by any divorce;
• you are about to buy a property, and you and your spouse are contributing unevenly to its purchase price, and you wish to record that in a divorce your respective interests in that property would be reflective of your contributions rather than 50% each; or
• you are being named as the beneficiary of a trust, or you intend to set up a trust, and you want to be clear about how that trust (or your beneficial interest in that trust) should be treated in the event of a divorce.  

The only difficulty with post-nuptial agreements is that there can be limited incentive for the financially weaker party to enter into them. Therefore their negotiation needs to be handled sensitively. Of course, in order for the post-nup to be fair at the time of the divorce, and therefore for it to be upheld, it will need to ensure that the fundamental financial needs of the financially weaker party are met. You can therefore assure your spouse that the agreement will not leave them “high and dry” and instead it is being entered into for a specific reason. Your lawyers can guide you through how best to discuss the post-nup with your spouse and will ensure that the messaging between solicitors aligns with that.    

Are you going through a divorce in a foreign country but you or your spouse has an English pension? This area has potential trips and pitfalls so it is important you think about it early, and take early advice – read on!

You might now be living in another jurisdiction, but have spent considerable time in England, during which period you built up an English pension. Your English pension might even be the only asset that you still have in England, and all the rest of the assets relevant to your divorce are located in the other country where you are divorcing. This might mean that you forget about the English pension, when it’s important not to do so!

An English pension cannot be shared without an English court pension sharing order, or “PSO”. A foreign court order that says that all pensions should be shared will not be applicable to or enforceable against an English pension. If your divorce is completed abroad and you have a foreign court order dealing with the finances associated with your divorce, it is therefore required that you also get an English PSO. The only way to do this is to make an application to the English courts under Part III of the Matrimonial and Family Proceedings Act 1984, commonly known as a “Part III claim”. This law enables the English court to review a foreign financial order associated with divorce, and possibly provide further financial provision to the applicant above and beyond the foreign order.

The criteria to qualify for a Part III claim is that your divorce in the other country was legally valid; you have not remarried since that divorce; and that you have a “sufficient connection” with England. You will have a “sufficient connection” if either you or your spouse are domiciled in England and Wales (and were/was at the time of the foreign divorce), or if either of you have been habitually resident in England and Wales for a year before making the Part III claim.

Prior to Brexit, there was an additional limb of the “sufficient connection” test that was called the “forum Necessitatis’” limb. Essentially this allowed for England to secure jurisdiction for a Part III claim if no court of any other EU country has jurisdiction on any other ground. This was very helpful for making a Part III claim for a PSO because you would only have to prove that you are not domiciled or habitually resident in any EU country (other than the country you divorced in, if relevant). This made applications under Part III for an English PSO by parties who are both resident and domiciled abroad possible.

This “forum Necessitatis’” jurisdiction option was removed by post Brexit legislation. This means that, if neither of you are domiciled or habitually resident in England or Wales, you will not be able to secure an English PSO, and the English pension will remain with the person whose name it is in. You do not want to have gone through your whole divorce settlement negotiation acting on the assumption that the English pension would be shared, only to discover that will not be possible. Therefore, if you are entering a divorce abroad but you know that you or your spouse have an English pension, take advice at the outset on whether or not you will be able to get an English PSO and ideally before you even issue the initial proceedings, if possible. If a lawyer confirms this will be difficult for you, you can consider “off-setting”, whereby you account for the fact that the English pension is out of scope of any financial order by granting a higher share of other assets to the non-pension holding spouse. It is best that this forms part of the settlement negotiation from the outset and will likely require specialist actuarial advice to determine the value of the pension to the party who is retaining it.

Longstanding practices in the Family Court that restrict reporting of cases and protect litigants’ anonymity may be coming to an end, as Kate Pooler of Edwards Family Law discusses.

Mr Justice Mostyn’s Campaign for Greater Transparency

Senior judges in the Financial Remedy Court (FRC) are not in agreement as to how to strike the right balance between transparency and privacy in matters such as who can attend hearings, what documents should be provided to reporters, and retaining parties’ anonymity. Mr Justice Mostyn has made waves by unequivocally asserting in a series of judgments since late 2021 that the FRC has been getting the law wrong for decades. Mostyn J’s position is that, whilst Family Court proceedings sit in “private” (as opposed to “open” court, like the majority of court divisions), that does not in and of itself require reporting restrictions or that the parties be anonymised when the judgment is published on a public database. He has made statements such as:

• “Had a member of the press or a legal blogger attended I consider that they could have reported everything that they heard during the proceedings” (Aylward-Davies v Chesterman [2022]);
• “The correct question is not: ‘Why is it in the public interest that the parties should be named?’ but rather: ‘Why is it in the public interest that the parties should be anonymous?’” (Xanthopoulos v Rakshina [2022]); and
• “if very rich businessmen are in court fighting at vast expense with their ex-spouses over millions, then the public has the right to know who they are and what they are fighting about. The judgment should therefore name names. Redactions can be made of commercially sensitive information, but…the redactions should never obscure the way the court has decided the case” (Gallagher v Gallagher (No. 1) (Reporting Restrictions) [2022]).

“Is it fair that one party’s poor behaviour could result in the other party’s identification?”

You might notice something that the above three cases have in common: you can read the names of the parties. That is because Mostyn J did not anonymise his judgments. The vast majority of financial remedy judgments heard by judges other than Mostyn J, however, continue to be anonymised. The lead FRC judge, Mr Justice Peel, has been the most prolific publisher of judgments since November 2021 and all have been anonymised. Since parties have no control over which judge hears their case, they face a bit of a lottery as to the publication protections they might be afforded.

The TIG Report 

TIG has just reported its findings on all issues of transparency as they relate to the FRC. Acknowledging Mostyn J’s judgments, it states “it is not for this report to set out what we consider the law to be on any particular, controversial, point. That must be a matter for the Court of Appeal. We acknowledge that there are different approaches to certain issues by different judges at High Court level and that this is far from ideal…it will be for others to decide whether the conclusions we reach should be implemented”.

The TIG report’s most critical recommendations can be summarised as follows:

Attendance at hearings

Cases should continue to be heard in private – ie, the only individuals permitted to attend are the parties, their representatives, and accredited journalists. Efforts should be made to better inform practitioners and judges on what to do if a reporter attends their hearing.

Reporting 

Reporters attending hearings currently cannot see any case documents without specific permission of the Court, meaning that the hearing is often impossible for them to follow. The report recommends that, when a reporter attends, a standard Reporting Order be made by the judge which:

• permits reporting of what the reporter witnesses, subject to anonymisation and protection against intrusive and personal identification; and
• entitles the reporter to see the parties’ position statements, together with the “ES1” (a brief case summary document) – reporters cannot publish any information that would breach the Reporting Order, even if it appears in a provided document.

Anonymity in published judgments

This is at the centre of Mostyn J’s standpoint and is arguably the most controversial issue. The report considers that “the default position should be one of anonymity”, but “there will be cases in which the presumption of anonymity will not be upheld”, which is a matter for the judge to decide on a case-by-case basis. Examples might include “situations of poor behaviour, either within the proceedings (by way of litigation conduct) or outside the proceedings in appropriate cases”, or where the public interest in identification outweighs the privacy justifications. The report also strongly encourages judges at all levels, not just High Court, to publish their judgments, to reset the imbalanced focus on “big money” cases heard by the High Court. 

The TIG report’s recommendations, if implemented, would undoubtedly provide greater clarity as to what parties to FRC proceedings can expect from a transparency and privacy perspective. The idea, however, that a party’s conduct could lead to a loss of their anonymity leaves much room for judicial discretion. What sort of behaviour outside of proceedings should this cover, what is the threshold for “poor behaviour”, and is it fair that one party’s poor behaviour could result in the other party’s identification? The question of transparency is by no means answered and we eagerly await a Court of Appeal case on the topic. In the meanwhile we will report back on the extent to which the TIG report recommendations are implemented by the Family Division.