29 March 2015

Family Law Agreements and Independent Legal Advice

A colleague recently asked a question about the custom of sending people for legal advice before they sign agreements and I realized that, in light of certain provisions of the new Family Law Act, a refresher on the topic might be helpful.

Why it's important to get legal advice before signing an agreement

When people sign agreements about family law matters, lawyers always want those people to get legal advice about the meaning and effect of their agreements. (This is often called "independent legal advice," because each party is getting their own legal advice from their own lawyer, independent of the other party.) In fairness, this oughtn't be just a lawyer thing, it's a damn good idea in general.

Family law agreements, you see, are unusually important, sometimes more so than other kinds of agreement. Family law agreements:
  • are contracts, and, like any other contract, you're stuck with it if you sign it;
  • usually don't have an end-date and are meant to last forever;
  • contain terms that can have life-long impacts, like about the payment of spousal support and the division of property and pensions, 
  • deal with the most important things in people's lives, like how their children are cared for; and,
  • usually represent a compromise of people's legal rights, and sometimes the terms of an agreement are different than what the result might have been at trial.
As well, the agreements family law lawyers draft tend to be long and on the complicated side. Although the meat-and-potatoes stuff about who keeps the car, how the kids will be looked after and how the family home will be sold is all in there, lawyers add a lot of other stuff that is intended to strengthen an agreement against all the different ways an agreement can be attacked in court. This isn't about lawyers being neurotic arseholes, it's about making sure that the agreement stands the test of time and that everyones' interests are protected. Among other things, you'll see clauses that say things like this:
  • the agreement is a final settlement of all legal issues resulting from the relationship, and each person releases the other from all claims they might have as a result of the relationship;
  • each person has received independent legal advice or had the opportunity to get it;
  • each person has read the entire agreement carefully and fully understands what the agreement says and how it limits his or her legal rights;
  • each person has completely disclosed all information relevant to the negotiation of the agreement, and each person is satisfied with the other person's disclosure;
  • each person is signing the agreement voluntarily and hasn't been pressured into signing it by the other person;
  • if a part of the agreement is found to be void, the rest of the agreement remains binding on the parties;
  • a person's failure to insist that other do something as the agreement requires does not mean that he or she has waived that requirement;
  • the written agreement is the entire agreement, and there aren't any oral agreements that go along with it; and,
  • the agreement can be changed in the future, but only in writing.
There are many other clauses that you'll see in agreements prepared by lawyers, but these are the biggies.

As a result, it is really, really important important that you see a lawyer to get advice about any agreement before you sign it. You need to understand not just the nuts and bolts of the agreement, like who has to do what and when it has to be done by, you have to understand all of the legal gobbledegook too.

Do you have to get legal advice?

No, in all honesty, you don't... although getting legal advice is a really good idea.

In general, each person has an interest in making sure that the other person gets legal advice about the agreement. It sounds strange, I know, that you'd want you ex to see a lawyer and get advice about an agreement, but you do. You want to stop your ex from ever saying something like "gosh, I had no idea that the agreement said that, I never would've signed it if I knew that!" Now, agreements are presumed to be binding on you, whether you've read it or understood it or not, but there are circumstances when not having had legal advice makes it a bit easier to weasel out of an agreement.

You especially want the other person to get legal advice if the agreement is unfair to him or her!

What do you get when you get legal advice?

If you've read through to this point, you know that the lawyer you see will tell you about the meaning and legal effect of the agreement. In addition to this, the lawyer should get a lot of information from you about yourself, your family and the circumstances of your relationship and then tell you:
  • about the laws and legal principles that apply to your situation;
  • about the range of likely results if you and your ex took your dispute to court instead of trying to settle it;
  • about the risks and cost involved in taking your dispute to court;
  • whether the terms of the agreement are within the range of likely results and whether, taking all of terms of the agreement and all of your circumstances into account, the agreement is fair;
  • whether there are any problems with how the agreement is drafted; 
  • whether any changes are necessary to the agreement to make it fairer to you;
  • whether any changes are necessary to the agreement to better defend it against attempts to set it aside in the future; and
  • whether you should sign the agreement or not.
It's important to understand that the lawyer can't prevent you or your ex from signing the agreement. My job was just to explain the law and offer an opinion about the agreement, and although there were a few occasions when an agreement was so horribly unfair that I refused to witness a client's signature, I always respected my clients' right to settle a dispute.

What's the Family Law Act got to do with legal advice?

Firstly, the Family Law Act says that agreements are just as good as orders in settling a family law problem. As well, s. 6 says that agreements are binding on the people who've signed them, whether the agreement is filed in court or not, or whether the parties had advice from a lawyer or not.

Secondly and more importantly, the act says that the court can't make an order about spousal support or the division of property and debt if the parties have an agreement on those issues until the agreement has been set aside. This is really important; the old Family Relations Act didn't give this much heft to family law agreements! The parts of the act that talk about setting agreements on these issues aside, s. 93 for property and debt and s. 164 for spousal support, both say this:
On application by a spouse, the Supreme Court may set aside or replace with an order made under this Part all or part of an agreement ... only if satisfied that one or more of the following circumstances existed when the parties entered into the agreement:
(a) a spouse failed to disclose significant property or debts, or other information relevant to the negotiation of the agreement; 
(b) a spouse took improper advantage of the other spouse's vulnerability, including the other spouse's ignorance, need or distress; 
(c) a spouse did not understand the nature or consequences of the agreement; 
(d) other circumstances that would, under the common law, cause all or part of a contract to be voidable.
It's easy enough to read between the lines here and see why legal advice is so important. Legal advice will:
  • help you know whether enough disclosure was made to reveal all of the property and debts;
  • tell you whether all of the important information was probably disclosed;
  • tell you whether either person is being taken advantage of;
  • stop each person from relying on their ignorance of the law or the agreement if they try to have the agreement set aside in the future;
  • stop each person from claiming that they did not understand the nature or consequences of the agreement if they try to have it set aside in the future; and,
  • identify any problems with the agreement under the law of contracts that might cause all or part of it to be set aside in the future.
If you're signing a family law agreement that talks about spousal support, property or debt and you want that agreement to last, getting independent legal advice is a must.

How do you prove you've each had legal advice?

To be binding, each person must sign the agreement; there's normally a space for each party to sign at the end of the agreement, along with a space to write in the place where the agreement was signed and the date it was signed. Sections 93 and 164 also ask that each person's signature be witnessed by someone else, and that's normally also how lawyers prefer agreements to be executed.

What I used to do was send my agreements to the other person complete with a "Lawyer's Certificate of Independent Legal Advice" and a "Confirmation of Independent Legal Advice" for each party. The idea was that the client would sign the agreement and the confirmation, and the lawyer would witness the client's execution of the agreement and sign the certificate. The complete agreement would consist of the text of the agreement itself, two certificate and two confirmations, all of which would be stapled together for each copy of the agreement. This way, I had positive proof that each party had received independent advice.

Now, to be fair, these things aren't necessary. The certificate and confirmation are just forms I made up, but I they helped make sure that the agreement would stand the test of time ...and they also discouraged people from trying to set them aside. This is what my certificate said:
"I certify that I have been retained by ___________ to advise and have advised her with regard to the signing of the Agreement. 
"On the ________ day of ___________ , 2015 I fully read over and explained to ___________ the said Agreement, and informed her of the contents of the said Agreement as it effects her rights under the Family Law Act, the Divorce Act and the Wills, Estates and Succession Act, and she expressed herself to me as understanding the Agreement on and in light of her present and future circumstances as well as the present and future circumstances of ___________ .  ___________ indicated to me, and it appeared to me, that she entered into the Agreement willingly and not under any duress or stress exerted by ___________  and without any pressure or undue influence or deception on the part of ___________ or anyone on his behalf. 
"I believe that upon executing the Agreement, ___________ was fully advised and informed with regard to all the foregoing matters mentioned and may fairly be said to have acted independently therein."
You can see how this hits the highlights of ss. 93 and 164. The agreement was fully explained to the client, the client knew how the agreement would impact her now and in the future, the client said she understood the agreement, it seemed to me that she understood the agreement, and the client wasn't pressured into signing the agreement.

My confirmation was even simpler:
"I, ___________ , the above-named, state that I have read over the above Certificate of Independent Legal Advice and that the statements therein said to be made by me are true."
Feel free to use these if you'd like, just make sure that you translate them into English first.

Do you have to have a certificate of legal advice?

Nope. Having one just helps to prove that the person received legal advice, but it's not mandatory and there are other ways of proving that the person had legal advice.