Pre-nuptial agreements are now being seen as "unexploded time bombs" in the US with some leading family lawyers refusing to draw them up anymore, the Law Society's family law conference in Dublin heard yesterday.
Family law solicitor Audrey Byrne of McCann FitzGerald told the conference the agreements were a useful tool and Irish solicitors were receiving an increasing number of inquiries about them. However, they were "fraught with difficulties", she said.
The agreements were longer established in the US where some lawyers were now finding that the financial returns were low, while the exposure to negligence suits was "enormous".
In the case of a divorce, one of the parties was likely to challenge the agreement and the lawyer could then be called as a witness. In addition, neither party was likely to return to the lawyer who drew up the agreement.
She said the agreements had been described as "an unexploded time bomb ticking away in your strongroom".
Last month, a Government- commissioned report found in favour of pre-nuptial agreements being used as a guide when a court was deciding on the division of assets.
Ms Byrne said "express statutory provision" was needed to clarify the legal standing of such agreements.
While pre-nups were usually associated with the rich and famous, they were also in demand from people who were entering second marriages and wanted to ensure that their children's property and inheritance rights were protected.
She said it was international best practice that agreements should not be drawn up within six weeks of the wedding date, to ensure that people were not being pressurised.
Family law solicitor Hilary Coveney of Matheson, Ormsby Prentice said unprecedented economic growth had led to more and more "ample resources" or "big money" family law cases coming before the Irish courts.
In 2005, there was a 23 per cent increase in the number of High Court family law cases, she said, and people's financial arrangements were getting increasingly complex. She quoted High Court judge Mr Justice Liam McKechnie who recently said that family law practitioners were almost unanimous in their view that a case with an asset base of less than €5 million did not qualify as a "big money" case.
Ms Coveney said the current "hot topic" was the "second bite of the cherry" cases, where a party to divorce proceedings sought more money than previously agreed in the full and final settlement made at the time of separation.
She said it was impossible to generalise on the outcome of such cases, but courts had departed from the terms of previous agreements where it was felt that "proper provision" was not made for one spouse.
However, they were less likely to intervene if there had been little change in financial circumstances since the separation. They were also less likely to intervene if generous provision had been made for the less wealthy spouse and where that spouse had not managed these funds wisely in the intervening period.
A separation agreement could also be reviewed if it was felt that one party did not make a full disclosure at the time of the separation, she said.
