Lawyers who accept independent legal advice (ILA) mandates with respect to domestic contracts should not assume this task lightly and should take the time to analyze all the terms of the proposed marriage contract and ensure that the client fully understands their consequences.
The article quotes LawPRO statistics which indicate that 48% of the money paid out in negligence claims in the past five years went to claims involving attacks on domestic contracts. The article notes that a Family Court judge recently commented “Why, in light of the rather small remuneration involved for these kinds of contracts and the high level of risk of a negligence claim involved, would any of us ever even want to do these kind of contracts?”
An Ontario family lawyer proposes a new procedure to deal with marriage contracts and cohabitation agreements in order to reduce the number of challenges to such agreements. Domestic contracts, and especially marriage contracts and cohabitation agreements are very often challenged in court, and this raises the question as to why parties sign these agreements in the first place.
The article proposes a 7 - step procedure named the “Compact”. The purpose of the Compact is first, to establish a protocol for dealing with this type of file so that the parties and their lawyers understand how the file will proceed; and second, to reduce the likelihood that in the future a court could find that a party failed to disclose significant assets or debts at the time the contract was made, a party did not understand its nature or consequences, or there was some element of unconscionability about how the parties were persuaded to enter into the contract.
These steps are procedural in nature, and do not address the substantive content of the agreement. The steps cover topics like minimum length of time before the wedding; ILA; types of meetings and the sequence in which they should be held; and various reports to be made (and their timing).
Takeaway:
- The failure of lawyers to properly analyze and critique marriage contracts when providing independent legal advice to a client could result in a future challenge to the validity of the marriage contract and a claim for professional negligence against the lawyer.