Marital Agreements and Private Autonomy in Comparative Perspective

Jens M Scherpe, Jens M Scherpe

• Verlag: Hart Publishing
• Jahr: 2012
• ISBN:
  9781847318862
• Auflage: 1
• Thema: Derecho
• Thema: Derecho de familia

This book deals with a subject that has recently been the focus of debate and law reform in many jurisdictions: how much scope should spouses have to conclude agreements concerning their financial affairs - and under what circumstances should such agreements be binding and enforceable? These marital agreements include pre-nuptial, post-nuptial and separation agreements. The book is the result of a British Academy-funded research project which investigated and compared the relevant law of England and Wales, Australia, Austria, Belgium, France, Germany, Ireland, the Netherlands, New Zealand, Scotland, Singapore, Spain, Sweden and the jurisdictions of the United States. In addition to chapters on these jurisdictions, the book includes a chapter on the 'English practitioner's view'. It also provides a comparative analysis of the different matrimonial property regimes and the rules on marital agreements that explores underlying themes and principlesand makes recommendations for regulating marital agreements. A key theme is the function and effect of marital agreements in the different jurisdictions. Thus, each chapter first explains the underlying 'default' rules for ancillary relief/matrimonial property and maintenance. It then analyses the current rules for marital agreements, and gives a brief account of the private international law rules. The book provides a comprehensive source of reference on ancillary relief/matrimonial property and maintenance and the rules on pre-nuptial, post-nuptial and separation agreements in 14 jurisdictions. It offers guidance for academics and practitioners dealing with international matters, and a basis for discussions on law reform. 'I applaud the vision and perseverance of Jens Scherpe in having conceived this book and, with so much distinguished help, in now bringing it to birth. I will be using it for many years and I warmly invite my fellow family lawyers across the world to do likewise.'
Foreword by The Rt Hon Lord Wilson of Culworth, Justice of the Supreme Court of the United Kingdom This title is included in Bloomsbury Professional's Family Law online service.

Marital Agreements and Private Autonomy in Comparative Perspective

JENS M SCHERPE

CONTENTS

I. Introduction

II. Financial Relief on Divorce—The Default Systems

A. Overview

B. Community of Property

i. Universal Community of Property

ii. Community of Acquests

iii. Summary

C. Participation Systems

i. Deferred Community of Property

ii. Statutory Compensation Systems

D. Jurisdictions with Primarily Discretionary Financial Relief Upon Divorce

i. Full Discretion Jurisdictions

ii. ‘Rule-Based Discretion’ Jurisdictions

E. Brief Comparison

i. Community vs Separation

ii. Rules vs Discretion—Does This Actually Mean Certainty vs. Fairness?

iii. Of ‘Pillars’ and ‘Packages’

iv. A Common View on Sharing?

v. A Common View on Needs and Compensation?

vi. Excursus: Towards Rule-Based Discretion in Ancillary Relief in England and Wales?

III. Pre-nuptial and Post-nuptial Agreements

A. Some General Points on Pre- and Post-Nuptial Agreements

i. Are They Marital Agreements or Divorce Agreements?

ii. Public Policy Objections—‘Planning to Fail’?

iii. Are Pre-Nuptial Agreements Different from Post-Nuptial Agreements?

iv. Binding Effect of a Pre- or Post-Nuptial Agreement

B. Safeguards Applying at the Time of the Conclusion of the Pre- or Post-Nuptial Agreement

i. Form and Legal Advice

ii. Disclosure

iii. Time Factors

iv. Consequences of Failing to Comply with Formal/Procedural Requirements

C. Safeguards Applying at the Time the Pre- or Post-Nuptial Agreement is Invoked

i. Distinctions Based on the Substance or Function of the Financial Claim

ii. A General Yardstick of Fairness?

iii. Common Criteria for Fairness

iv. Consequences of Failing to Meet Substantive Requirements

IV. Separation Agreements

V. Conclusion

i. Protection of Autonomy and Procedural Fairness: Unconscionability of Dealings

ii. Protection from Autonomy and Substantive Fairness: Unconscionability of Outcomes

I. INTRODUCTION

In an ongoing marriage, the financial relations of the spouses are often of little importance; it does not matter very much which of the spouses owns which asset, who earns more etc. But when one of the spouses dies or the marriage ends in divorce, these issues matter greatly.

This book focuses on the financial relief available upon divorce, in England generally referred to as ‘ancillary relief’, and, in particular, on the question of whether and to what extent the spouses themselves can agree on what their financial relations are going to be—in other words, how much autonomy the spouses have to regulate their own financial affairs. As a marriage (at least in most legal systems, and certainly in all those considered in this book) requires the consent of both parties involved, it is not unreasonable to assume that the spouses should, in principle, also be free to come to an agreement regarding the financial consequences of the marriage—but the matter is, of course, much more complicated than that, as the comparative view taken in this chapter shows.

Historically, contracts about persons to be married were much more relevant than contracts between them, not least because, for a long time, women in many jurisdictions did not have the full legal capacity to conclude contracts at all. For example, in early Rome, the pater familias had a position of considerable authority and legal power in the family. The wife through marriage became part of the husband’s family and subject to his authority (conventio in manum). The manus-free marriage only became common much later. In the Germanic munt marriage, which was the typical form of marriage for freemen (and -women), a contract was concluded between clans. The person having the muntwalt over the bride or the clan in the marriage contract pledged to transfer the munt (literally: protection, authority) to the groom. In the so-called Friedel marriage, on the other hand, the marriage was concluded by the consent of the spouses and the husband did not acquire the munt over the wife.

The underlying policies and the nature of marriage as understood by the respective jurisdictions continue to have an enormous impact on the legal rules concerning marital agreements to the present day. In European laws a strong Christian influence can still be seen, and this has had (and to a certain extent still has) an impact on marital agreements. By contrast, in Jewish or Islamic law, marriage itself is considered a contract.¹ In Islam, marriage always includes the payment of a dower (mahr) by the husband to the wife, either at the time of marriage or in the event of the dissolution of the marriage. The spouses may negotiate the terms of the dower with regard to content, amount and time of payment, but may not exclude the dower. The Jewish ketubah is payable should the marriage end in divorce. Both mahr and ketubah have a protective function for the wife. These agreements are not only generally accepted, but a (traditional religious) marriage cannot be concluded without them.

In contrast, as the Christian understanding of marriage comprises its principal indissolubility, agreements contemplating the dissolution of a marriage (other than by death) were virtually unheard of before the introduction of divorce and, in any event, were not considered to have any legal effect. However, agreements concluded to regulate the formal separation (separation a mensa et thoro) of the couple gradually became accepted.

Even after the introduction of divorce, agreeing on or planning the consequences of the end of the marriage was generally seen as contrary to public policy,² as the couple apparently were ‘planning to fail’. Today we can see a shift towards a different attitude to marital agreements, namely that in this day and age, with a high number of marriages ending in divorce, not having at least considered the consequences of that happening is seen as ‘failing to plan’.³ In a way, therefore, marital agreements can be seen as something akin to car insurance: one does not plan to have an accident, but is aware of the risk and therefore is taking precautions and insuring oneself against that risk so that financial consequences become manageable and predictable. But marital agreements can have a function that extends well beyond ‘insurance’, and may be based on other considerations, such as wanting to ring-fence property owned before the marriage, making sure children from a previous marriage receive a fair share of one’s property, tax reasons, protecting the other spouse from one’s creditors etc—and, of course, generally seeking one’s own financial advantage.

As already explained in the introductory chapter of this book, none of the legal rules regarding marital agreements can be understood without the legal and social context in which they apply. In the case of a comparative study, this means looking at a great number of different contexts, although a full exploration of these contexts for all the jurisdictions involved in this comparative project is virtually impossible and this chapter does not claim to undertake a ‘complete’ comparison. The focus will be on identifying the underlying structures, rather than on the details of the legal rules in the respective jurisdictions, but in order to have at least a basic understanding of the function and purpose of marital agreements, it is essential to know what the rules are that apply in the absences of such an agreement; the ‘default system’. It must be assumed that the agreement was concluded because the couple wanted rules other than the default ones to apply to their relationship, otherwise the marital agreement would be rather pointless. This comparative chapter will, therefore, begin by describing in brief the default regimes that apply to the financial relations of the spouses in case of divorce and then undertake a comparison of these regimes (see section II below),⁴ before pre- and postnuptial agreements (see section III below) and separation agreements (see section IV below) are looked at in the same way. The chapter ends with a comparative analysis and some conclusions regarding marital agreements (see section V below).

II. FINANCIAL RELIEF ON DIVORCE—THE DEFAULT SYSTEMS

A. Overview

As a starting point, it can be observed that in the jurisdictions considered in this book there are two basic approaches to the default matrimonial property regime: either some form of community of property is formed through the act of marriage⁵ or the marriage as such does not change the ownership of the assets of the spouses, so during marriage there is a separation of property.⁶ In the former case the communal property will be divided at divorce. In the latter case there are a variety of different approaches taken in case of divorce in order to allow a spouse to gain a share of the other’s property, to ‘participate’ in the other’s property.

In addition, there are two different ways in which the division of/participation in the property is achieved: the division/participation is either primarily based on rules by providing a matrimonial property regime⁷ or, in principle, left to the discretion of the court, so there is no matrimonial property regime as such.⁸ That said, in some of the jurisdictions where the division of property is primarily rule-based, there is an element of discretion, just like in some of the jurisdictions where the division of property is left to the discretion of the court, rules are provided in statute or case law to guide the exercise of that discretion. Nevertheless, the fundamental distinction remains.

Looking at the jurisdictions where the division/participation is primarily rule-based, we can group the jurisdictions based on the first observation above.

In the first group we find jurisdictions where there is some form of community of property from the day of marriage (see section II.B below).

In the second group are jurisdictions where the marriage as such does not affect the ownership of the assets (whether acquired before or during the marriage) of the spouses, so during marriage there is a separation of property, but upon divorce the spouses partake in the assets of the other in some form; Pintens⁹ has referred to these as ‘participation systems’, and this term shall be used in this chapter (see section II.C below).

Then looking at the jurisdictions where the division of property in case of divorce is based on the discretion of the court, we can distinguish between those where the discretion is still largely unfettered (third group, see section II.D.i below) and those where the guidance (or even presumptions) provided by statute and/or case law has solidified to such a degree that they now have what can be called a ‘rule-based discretionary approach’ and the respective jurisdiction can almost be said to have a matrimonial property regime (fourth group, see section II.D.ii below).

Because the division of property is central to financial relief upon divorce and the approaches to this division in each of the groups are so distinctive, this chapter will follow the grouping just set out for the comparison of financial relief upon divorce in general, despite the fact that, of course, financial relief upon divorce comprises much more than just a division of property.

Without wanting to pre-empt the comparative analysis, the key difference between the primarily rule-based approach and the discretion-based approach to the division of property in case of divorce is the primary aim of that division. In the former the aim is to provide certainty as to who owns what (as is generally the aim of property law) or at least who can claim what, whereas in the latter the overarching aim is to achieve ‘fairness’ (as in England and Wales), or ‘proper provision’ for the spouses and the children (as in Ireland), or a ‘just result’ (as in Australia). That said, of course the jurisdictions where the division of property is primarily rule-based also generally aim to achieve an overall ‘fair’ result for the parties and ‘proper provision’ upon divorce, but they go about this in a rather different way—by separating the various issues (and remedies) arising. This approach has fittingly been called a multi-pillar approach by Dutta,¹⁰ and this term will be used in this chapter to describe this separation of issues. In these jurisdictions matrimonial property, maintenance and sometimes pensions and allocation of the use of the matrimonial home and household goods are considered separately and, in principle, independently of each other.¹¹ Hence the financial relief upon divorce rests on several independent ‘pillars’ which, nevertheless, jointly seek to achieve the overall policy aims. But the policies behind the various pillars may (and do) differ—and, as noted, the primary aim for the matrimonial property pillar is certainty. By contrast, the systems primarily based on discretion do no...