Report of Study Group on Pre-nuptial Agreements Published
The Tánaiste and Minister for Justice, Equality and Law Reform, Michael McDowell, T.D., has today published the Report of the Study Group on Pre-nuptial Agreements.
The Study Group was established by the Tánaiste in December 2006. Its terms of reference were to study and report on the operation of the law since the introduction of divorce in 1996 with respect to pre-nuptial agreements, taking into account constitutional requirements. The Group was asked to make recommendations for change as it considered necessary. The Study Group was chaired by Ms Inge Clissmann, S.C. and included legal practitioners and academics as well as representatives of the Attorney General's Office and the Department of Justice, Equality and Law Reform.
The Tánaiste thanked the members of the Group for the speedy conclusion of their work. "The report is a comprehensive analysis of the law in this area and the recommendations it makes are well considered and deserve implementation. This report will now form the basis for the formulation of legislative proposals that will be developed in consultation with the Attorney General" he said.
The report examines pre-nuptial agreements in the context of the constitutional protection accorded to marriage and the right to marry, and the overriding constitutional imperative of proper provision on divorce. The legal status of pre-nuptial agreements in Ireland and in other jurisdictions is examined. Public policy and common good considerations are examined as well as benefits deriving from the private ordering of financial affairs by the use of pre-nuptial agreements. The report also considers arguments against pre-nuptial agreements.
The Study Group's core recommendation is that separate provision be made in both the Family Law Act 1995 and Family Law (Divorce) Act 1996 to provide that the courts be required to have regard to existing pre-nuptial agreements when making ancillary relief orders in judicial separation and divorce proceedings. The report makes recommendations on the formalities necessary for the proper making of pre-nuptial agreements so that parties making such agreements would be both fully informed and protected. The report also recommends the introduction of a statutory basis upon which a court may make financial provision for a surviving spouse who may be unfairly affected by the provisions of a pre-nuptial agreement on the death of the other spouse in certain circumstances, e.g. as a result of the passage of time or other intervening events.
The report is available on the Department's website at www.justice.ie. For ease of reference the executive summary is attached below.
25 April 2007
Note for Editors
Composition of the Working Group
Chairperson: Inge Clissmann, Senior Counsel
Ross Aylward, LL.B
Marie Baker, Senior Counsel
Margaret Bannon, Advisory Counsel, Office of the Attorney General
Stephanie Coggans, Managing Solicitor, Law Centre, Legal Aid Board, Monaghan
Louise Crowley, Solicitor and Lecturer, Faculty of Law, UCC
John Kenny, Principal Officer, Department of Justice, Equality and Law Reform
Secretariat: Michael Flynn, Assistant Principal Officer, Department of Justice, Equality and Law Reform
Executive Summary
Constitutional Considerations
The Group concludes that pre-nuptial agreements do not offend against the constitutional protection accorded to the institution of marriage and the right to marry. Nonetheless, the constitutional requirement of proper provision and the date of the assessment of such, prevent pre-nuptial agreements from being automatically enforceable in any given case. Instead, a degree of recognition should be afforded to such agreements, to be considered in light of various other relevant factors in ancillary relief proceedings.
The Current Legal Status of Pre-nuptial Agreements in Ireland
The Group is of the view that pre-nuptial agreements are enforceable and capable of variation under existing Irish statute law. The weight to be attached to an agreement would be determined by the courts in the light of the requirement for proper provision and the relevant statutory criteria.
Legal Status of Pre-nuptial Agreements in Other Jurisdictions
Pre-nuptial agreements have been considered and legislatively regulated in many other jurisdictions. The experiences of other jurisdictions are instructive and assist in the identification and consideration of the issues to be considered in addressing and possibly reforming this area of law. Whilst few jurisdictions will rigidly enforce pre-nuptial agreements where to do so would cause grave injustice, the varying approaches to the issues of formalities and fairness suggest that these issues will require legislative and/or judicial consideration under Irish law. Certainly it appears that legislative provisions which outline the circumstances where a pre-nuptial agreement will not be enforceable is a favoured approach which can serve to eliminate doubt in respect of formal requirements surrounding the execution of a pre-nuptial agreement. Broader concepts of unconscionability and inequitable outcomes unavoidably rely upon the exercise of judicial discretion which focuses on the particular circumstances of a case.
Public Policy Considerations
Public policy objections to pre-nuptial agreements have been diminished through the introduction of divorce in Ireland and may no longer be valid in view of socio-economic and population changes.
The Common Good
A legislative rule of universal application seeking to prohibit pre-nuptial agreements on the basis that they offend the common good would probably be deemed unconstitutional. Instead the common good would be better served if the validity and effect of a pre-nuptial agreement be determined by the courts in each individual case.
Private Ordering of Financial Affairs
In considering the case in favour of the enforceability of pre-nuptial agreements, it is arguable that clarity in the law would result in increased predictability and reduced costs. This argument does not invariably withstand scrutiny as couples may embark on litigation on the preliminary issue contesting the enforceability of a pre-nuptial agreement in advance of seeking ancillary relief orders. In fact, it is possible that there could be an increase in costs.
Arguments against Pre-nuptial Agreements
There exist arguments against pre-nuptial agreements which must be considered. They may not always provide a fair solution to marital break-up, they may prompt litigation and drain marital resources, and they may be viewed as offending public policy to a degree. However, on balance it is difficult to conclude that they should universally be excluded from consideration.
Recommendations
The Study Group recommends that express statutory provision be made for pre-nuptial agreements by way of introducing a new section 16 (2) A of the Family Law Act 1995 and new section 20 (3) A of the Family Law (Divorce) Act 1996 (Chapter 9)
Provision should be made for pre-nuptial agreements to be scrutinised by the court in separation and divorce proceedings in much the same way as separation agreements are currently dealt with under section 20 (3) of the Family Law (Divorce) Act 1996.
Pre-nuptial agreements are subject to different considerations than separation agreements and therefore a discrete provision should be inserted into each Act to require a court to have regard to these agreements. This could be achieved by inserting a new section 16 (2) A into the 1995 Act and section 20 (3) A into the 1996 Act.
The Study Group recommends that no amendment be made to section 16(2) of the Family Law Act 1995 and section 20(2) of the Family Law (Divorce) Act 1996 (Chapter 10)
The inclusion of the execution of a pre-nuptial agreement as one of the factors listed in section 16(2) of the 1995 Act and section 20(2) of the 1996 Act would not represent a sufficiently transparent way of showing whether or what weight had been attached to the agreement.
The Study Group recommends that pre-nuptial agreements be reviewable on death (Chapter 11)
It runs contrary to our succession law to allow interference with the freedom of testation on broad discretionary grounds. It is likely that in certain circumstances a surviving spouse may be unfairly affected by the provisions of a pre-nuptial agreement, e.g. as a result of the passage of time or other intervening events. Therefore, the Study Group recommends the introduction of a statutory basis upon which a court may make financial provision for such a spouse notwithstanding the existence of a pre-nuptial agreement.
The Study Group recommends that procedural safeguards be imposed as a matter of law and that these should be expressed in clear terms so that parties making a pre-nuptial agreement would be both informed and protected (Chapter 12)
The Group recommends that the Family Law Act 1995 and the Family Law (Divorce) Act 1996 should be amended to include a definition of a pre-nuptial agreement such that an enforceable agreement must be: in writing, signed and witnessed; made after each party has received separate legal advice; made with disclosure of financial information; and made not less than 28 days before the intended marriage