01st May 2013
Financial settlement on separation, the enforeceabiliy of separation agreements
The High Court has recently considered the enforceability of a separation agreement. When married couples separate there are potential financial claims available to pursue in respect of income capital and pension.
Sometimes, the couple do not wish to have a divorce, but they do wish to deal with financial matters. In these cases, a Separation Agreement can be entered into setting out the terms of the financial settlement agreed between the parties. A separation agreement is not 100% binding,and at the time of a future divorce can be open to challenge. If however proper process and procedure has been followed and the terms are fair it is likely to be upheld. The only way to definitively deal with the claims and dispose of them in a binding way is to enter into a consent order within divorce proceedings. Simply put this is asking the court to approve the financial settlement and make it into a court order which will be binding save in exceptional circumstances.
The recent case before the High Court, T .v. T, involved a couple who had separated and entered into a separation agreement some 22 years ago. They had subsequently divorced but for reasons unknown had not asked the court to approve the financial settlement and so did not have a binding court order. The former wife then tried to pursue financial claims against her former husband suggesting that the separation agreement was not binding. She alleged that there were fundamental flaws with the agreement because at the time the separation agreement was entered into her former husband had not given proper financial disclosure, had put pressure on her and she had been bullied by her solicitor. These are amongst some of the factors which could render a separation agreement unenforceable.
The High Court usefully considered the previous case law on the issue of separation agreements and upheld the agreement. The High Court confirmed that the key questions are:
- had the parties reached an accord by which they intended to resolve their matrimonial affairs, and
- how have they conducted themselves?
There are various steps which can be taken when entering into a separation agreement to demonstrate and support that it was intended to be binding. The High Court did not accept the former wife’s position, the agreement was fair, both of them had received advice from competent solicitors, and it stated that it was of magnetic importance that they had intended to resolve matters in that way, and they had implanted that agreement.
This case emphasises the need to obtain expert legal advice when reaching a financial settlement on separation so that this can be formalised in a binding way thus avoiding costly and stressful litigation in the future.
At Cartwright King we have an expert team of family lawyers who can assist with this and all aspects of family law. If you require advice on this or any other legal issue you can contact us on 0845 894 1622.