For an agreement to be binding, there must be an offer, acceptance and consideration. In family law, it must also be made with full information, be fair and be made without pressure or duress.
This issue was raised in the recent Court of Appeal ruling in Ely v Robson. It involved a dispute between a former couple, Mr Ely and Miss Robson, who had two children and had lived together in the home purchased solely by Ely in 1987 and registered in his name. In time, Robson’s elderly aunt and mother also came to reside at the property.
Following the couple’s separation in 2007, the parties met informally to try and resolve matters. Following the discussions, Ely’s solicitor wrote setting out the terms of agreement and, in the later court proceedings, contended that a settlement agreement had been reached in the terms of the letter. In short, Ely would hold the property on trust for himself for life with the remainder 80% for his heirs and 20% for Robson. Robson could continue to live in the property until the death of her mother and aunt.
Robson disputed any such agreement had been reached and argued that she would not have accepted anything less than an equal share of the property. The Court of Appeal dismissed Robson’s appeal and ruled that the oral agreement was binding. The court acknowledged that the informal meeting occurred seven years before the matter came to court and the parties had acted in accordance with the ‘agreement’.
So what does this show? There seems to be an ever increasing demand in family cases for the parties to agree – hence the push towards mediation. While mediated agreements are not meant to be binding and any good mediator will recommend that parties should get legal advice, family lawyers know that, frequently, legal advice is not sought, and that in any event it should be given at the beginning and as negotiations progress, not once the broad terms are agreed.
This is clearly a potentially dangerous precedent. Parties should be careful not to agree anything unless they are clear on what is agreed, and that it could be treated as binding on them in any event.
Frances Sieber, partner, Spring Law, London WC2