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Financial Agreements – Lawyers Being Sued

Recently, a Husband was granted leave to sue his former wife’s family lawyer for damages resulting from misleading and deceptive conduct under the Competition and Consumer Act. The claim is that the wife’s lawyer failed to properly advise her about the consequences of signing a ‘pre-nup’.

We don’t call them ‘pre-nups’ in Australia. The agreement being referred to is a Financial Agreement under section 90C of the Family Law Act, 1975, entered into in contemplation of marriage. These Agreements are designed to afford protection and certainty to parties entering into a marriage by setting out how the division of assets will occur in the event of a separation.

In order for a Financial Agreement to be considered binding, both parties must have received independent legal advice about the advantages and disadvantages of entering into the agreement, before the agreement is signed. The lawyers providing that advice are required to sign a certificate which is annexed to the Agreement.

In this case, the couple were in a de facto relationship for 11 years and entered into a financial agreement in 2015 prior to getting married. Following their separation, the Wife sought to set aside the Financial Agreement on the basis that her family lawyer did not properly advise her prior to entering into it.

It is not uncommon in family law practice to receive enquires from prospective clients, wanting to attend for a brief consultation solely for the purposes of having their ‘certificate of independent legal advice’ signed for their Financial Agreement. I always decline to do so. In order to discharge my obligation under the Act, as I see it, I need to be in a position to provide sound advice as to the advantages and disadvantages that are personal to my client. To do that, I need to obtain detailed instructions from the client about the relationship including the financial position of each party, the contributions that have been made prior to entering into the Agreement, the intentions of the parties moving forward with respect to paid employment, raising a family and how assets are to be acquired/held. I also need to be satisfied that my client has not only received, but understood the advice that I am providing to them. I can’t do all of that in a brief consultation.

In my opinion, solicitors who are proposing to sign a certificate of independent legal advice should, at the very least, provide written advice to the client followed by a face to face conference to discuss the advice and ensure that there is a thorough understanding of it before the Agreement is executed.

If you require assistance in relation to financial agreement, please don’t hesitate to contact one of our experienced family lawyers.

Image Credit – Brian Jackson ©

Written by Amelia Trotman on October 22, 2018

Experienced in all aspects of Family Law, Amelia has a particular interest in complex parenting and property matters, international relocation matters and surrogacy. Amelia's down to earth approach and empathetic nature allows her to develop trusting relationships with clients and work towards achieving the best possible outcomes. View Amelia's profile

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