Law Articles

Separation agreements for couples who are married or in a civil partnership 04/06/2024

Separation agreements are legal documents that outline the arrangements for a couple to live apart while still being married or in a civil partnership. These agreements are not strictly binding in the event of a later divorce or dissolution, but they can be used as persuasive evidence in court and can be enforced if:

• the terms are fair in law;
• the parties have provided full financial disclosure about their financial situation at the time the agreement was made; and
• both parties had the benefit of independent legal advice regarding the agreed terms and their legal rights.

In addition to the above points, the parties should ensure the agreement is in writing, dated, and signed by both in the presence of a third-party independent witness. The agreement should also include an outline of the relationship background, the names of the separating parties, the duration of their marriage/civil partnership, and details about any children of the family. It should clearly state that both parties are entering into the agreement freely and voluntarily and that they have made full disclosure of all assets and responsibilities.

Couples who do not wish to divorce or dissolve their civil partnership at the point of the marriage or civil partnership ending, often opt for a separation agreement to document the financial arrangements and other practical issues during the separation period, with a view to divorcing or dissolving their civil partnership at some point in the future. These agreements typically cover financial matters, such as the distribution of property, capital, pensions, debts, and maintenance. Although separation agreements are not legally binding in themselves, they can be made legally binding by converting them into a consent order within subsequent divorce or dissolution proceedings, assuming both parties wish to proceed in such a manner.

If one party does not wish to proceed with the agreed terms at the point of divorce or dissolution, the parties will need to issue court proceedings in the Family Court for a judge to determine the matter (assuming non-court dispute resolution methods have been explored or are not appropriate). The Family Court will likely give significant weight to the terms of the separation agreement if the parties fully disclosed their finances to each other, had independent legal advice regarding the terms and their legal rights before entering into the agreement, the agreed terms are fair in law, and there are no significant changes to the parties’ circumstances since the agreement was made.

It is worth noting that, even though an agreement about pension sharing is made and recorded in a separation agreement, the pension share can only be implemented after the parties are divorced or have dissolved their civil partnership.

Recent case law suggests that in practice judges generally assess whether a separation agreement was fair when it was made and, if not, adjust it to meet the requirements of fairness. But will it always be appropriate to hold parties to a separation agreement which was fair at the time it was made? The High Court may soon have to consider this in a case reported at an interim stage as HAT v LAT (2023) EWFC 162.

The facts of this case are quite unusual. The parties entered into a separation agreement in 1994, which provided for the husband to pay the wife £702,000 and included a clean break provision. However, the agreement was never converted into a consent/court order. Despite the clean break provision, the husband continued to provide the wife with ongoing financial support for over 20 years after their separation in 1994. This included paying her utility bills, a monthly allowance of £8,500, and helping her buy a property in London in 2009 (albeit with a declaration of trust in place). In July 2022, the husband reduced the wife's monthly allowance from £8,500 to £5,000. Then in December 2022, he ceased making any payments to the wife altogether. When the wife applied to the court for a full financial relief order, interim periodical payments, and a legal services payment order, nearly 30 years after their separation, the husband argued that the 1994 separation agreement should be upheld, and that no further provision was due to the wife.

In awarding interim maintenance, the court said that it did not ‘at this stage regard wife’s claims as doubtful or speculative … although they are likely to be significantly curtailed by reason of the deed of separation and the passage of time … The wife can point to the financial support for at least two decades which, arguably, generated dependency and, on her case, was explicitly on the basis that such support would continue for her lifetime.’

The court ordered the husband to pay the wife £8,500 per month (backdated to the date of the application) as interim periodical payments. This amount was less than the wife’s claimed expenditure of £11,436 per month, but the judge considered that the wife’s expenses could be pared down and she could use her earnings from her job to contribute towards her expenses. The court also made a legal services payment order in favour of the wife in the sum of £200,000 to essentially level the playing field in the financial dispute resolution process.

As far as the delay in bringing a claim for financial remedies is concerned, the court held that the delay was not by itself a jurisdictional or procedural bar to making such a claim. However, it noted that delay would be a factor when weighing up all other relevant factors under Section 25 of the Matrimonial Causes Act 1975 but that the ongoing support provided by the husband strengthened the wife’s claim, reducing the significance of the delay in bringing a claim. The court found that it would be unfair to hold the wife too closely to the terms of the separation agreement, especially considering her minimal liquid resources to meet her needs. The husband is appealing the court’s decision.

For further information and advice on this issue, and other family law issues, please contact us for a free initial consultation on 01992 306 616 or 0207 956 2740 or email us.