Civil Fraud Quarterly Round-Up: Q1 2021
Although the spike in divorce inquiries on the first working Monday of January is largely media myth, there is no doubt that many couples assess the health of their relationship as the new year dawns.
For those willing to work on their marriage rather than press the destruct button there is a new tool available called a reconciliation contract.
The contracts, which are already popular in the US, are a type of postnuptial agreement that allow couples to codify promises of how they will reform behaviour (for example, a pledge to curb addictive or adulterous behaviour) and at the same time agree financial terms in case the marriage cannot be salvaged (perhaps how property and pension pots would be divided).
So divorce terms are effectively agreed and put in a drawer while the couple make a fresh start and commit to try again. Such a contract would ordinarily contain a review clause in case changes need to be made.
Lawyers in the US report that reconciliation contracts can help parties feel more secure personally, emotionally and financially. They can change the mood music, the financial terms of a marriage or simply take the sting out of a relationship issue.
If reconciliation fails a degree of acrimony and expense can be avoided because most practical details will have been decided when the couple are being magnanimous and constructive.
There is no doubt that the use of pre and postnuptial agreements is on the increase since the 2010 Supreme Court decision of Radmacher v Granatino and there is no reason why reconciliation contracts shouldn’t take off in a similar vein. While clearly only the financial aspects should be enforceable, the relationship parts are important to help the couple define the parameters of what constitutes success for them and where deal-breaking tricky issues lie.
The Times Family Matters campaign calls for various changes to modernise divorce law in the UK, which most family lawyers agree is expensive, outdated and unnecessarily adversarial. Although the Matrimonial Causes Act 1973 contains a provision enabling the court to halt proceedings if it appears that there is a reasonable possibility of reconciliation, this is rarely used. There is a requirement to investigate the option of mediation and before the court will accept a divorce petition, a solicitor must sign a certificate indicating whether reconciliation has been discussed. However these are often tick-box exercises and pulling back from the enormity of divorce is difficult when a polarising process is underway.
While The Times campaign makes legislative headway, reconciliation contracts are an option we can explore now for our clients.
For some couples it may be that reconciliation contracts make sense before divorce is even properly embarked upon or as the result of mediation. For others it may be a way of trying again after a trial separation or even a last resort pause during formal divorce proceedings. There is no one-size-fits-all approach.
So as a profession let’s innovate this January and tell our clients with new year relationship blues that cliff-edge divorce is no longer the only option.
Reconciliation contracts have a positive part to play in the mix of nuptial contracts and as an alternative to divorce.
First published in The Times, January 2018
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