ADVICE ON MARITAL AGREEMENTS

We were recently lucky enough to have Lucy Greenwood, a partner with the International Family Law Group, in the studio to share her knowledge and expertise of marital agreements (http://www.iflg.uk.com/portfolio/lucy-greenwood).  Lucy is also a member of our Legal Expert Panel for the Family channel, and we are delighted to have her on board, feeding in ideas for future Family channel topics for continuing professional development (http://www.lawcolmedia.com/%5Cfamily.aspx).  Lucy actually suggested we make this programme!

Here is a sneak peak of the on-camera interview we conducted with Lucy, ahead of the programme’s release on 25th January:

Interviewer: How best can a marital agreement address the issues of needs and fairness?

Lucy Greenwood: Well, this is the very difficult question that we face with every pre-marriage agreement.  For example, it’s commonplace to treat the marital home a little bit differently from any other assets, even if there has been some pre-acquired money going into that property. You’ve basically got to consider – at each stage of the marriage – is the person that’s leaving the marriage without as much money going to be able to meet their needs?  So obviously they’re going to have to have somewhere to live.  What is deemed reasonable for their needs – and when we hear the phrase ‘real needs’ which is another phrase about a discretionary test for needs – it’s very hard to assess.  So you look at the standard of living to some extent and you consider what a court would do if it were looking at the scenario without a pre-marriage agreement, and because it’s a compromise you would look to see what the lower end of that bracket that the court award would comprise.  And it’s those sorts of weighing up kind of decisions that you have to make, and there is no right or wrong answer. But if you don’t meet needs it’s pretty clear from the case law that there’s a great risk that the court will still intervene either partially or totally in the agreement.  But it mustn’t be forgotten that even if it does intervene, because you’ve got this agreement, it’s likely to calibrate the award that is made.  And so they are still very useful tools even today.

Interviewer: What common misconceptions do you find clients have in relation to foreign marital agreements or the enforceability and other jurisdictions of agreements entered into here?

Lucy Greenwood: Well, this is a very common myth.  For a start, many people think that they could only divorce in the country they married, which is obviously not true.  And similarly, they forget that it’s not actually where you enter into the marital agreement that counts, it’s where you are if and when the marriage breaks down.  And so what we tend to do is we will address which country somebody is most likely to live in and get advice from those countries as to what their rights would be. We have very many situations where clients will come into the office and say ‘it’s alright, we’ve got a community of property or we’ve got a separation of assets, property categorisation, property regime in a European country, so they can’t touch my assets on…’.  And we say unfortunately it doesn’t work like that in England, it’s nothing but a factor.  It’s just one of the many section 25 factors that we have to look at. And, of course, depending on the weight and the understanding and the disclosure and all of the fairness aspects around the creation of that agreement the court may or may not abide by that agreement, but many have a real shock when they come in and find that it didn’t really mean as much as they thought it did.  There’s also the issue of Brussels II legislation, and first in time to issue, which can’t be usurped by a marital agreement.  So this can have a very significant effect.  So even if you’ve got a marital agreement in a particular country if you don’t get first in time when it comes to issuing a divorce procedure there’s still a risk that another country, like England, might be looking at your French marriage agreement.  And, of course, there’s the maintenance regulation, and if you’ve got maintenance aspects in the pre-marital agreement, spousal maintenance I’m talking about, not child maintenance, but if you’ve got a spousal maintenance agreement there that’s a prior agreement and therefore you could find that different parts of the case are being dealt with in different parts of the world.

Interviewer: So what specific clauses should practitioners ensure that they draft into marital agreements where there’s a possibility that the couple may move abroad?

Lucy Greenwood: There are certainly no hard and fast rules in relation to this particular question.  You really have to look at the scenario that you’re faced with.  You need to consider whether you’re going to put in a sort of catch-all phrase to say that this agreement should be recognised around the world.  That’s not going to be enough, but it gives an indication.  You look at choice of law clauses and in relation to EU countries you can actually sometimes, if you’ve got a strong enough connection, actually choose the country’s laws which will apply to the pre-marriage agreement but, again, Brussels II can usurp that.  So there is nothing easy about looking at jurisdictional aspects in marital agreements.  And many people think that you can do one and it’s definitely going to be binding all round the world, it is not.  You really have to tailor it to the countries that are most likely to be the countries in which the parties are living and consider the factors and the pros and the cons of choosing a jurisdiction, if that’s what you’re trying to do, over being silent on that issue.

Interviewer: And what particularly public policy or religious issues might need to be taken into account?

Lucy Greenwood: Well, this is quite interesting.  Generally with pre-marriage agreements the consensus is that child maintenance should not be dealt with in a pre-marriage agreement or if it is it’s definitely something a court could review because it would be against public policy to bar the courts from doing that.  But there are other more perhaps less obvious ones when you’re dealing with certain countries.  So in countries, for example, like Singapore and Dubai where same sex marriages or even homosexual relations are not actually recognised or accepted or legal then you’re not going to be wanting to do an agreement or seek to uphold it in that country if it’s for a same sex couple.  But there are others that are not so obvious.  And, for example, adultery clauses are becoming something that’s been debated recently and some people are advocating where clients want to make a point that somebody should not benefit as much if they commit adultery, that should go into the agreement.  But, again, be cautious with places like Dubai where adultery, again, is illegal and the implications for your potential client of even having that word or the court learning that they’re getting less because of it could have very major implications for that client.  So it’s those sorts of factors, cultural factors, religious factors.  You might want to cover, for example, dealing with the Get in the Jewish pre-marriage agreement so that it’s clear as to how that process is going to be undertaken. Just those sorts of things.

Until next time…

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CYBER SECURITY FOR LAW FIRMS

Recently we were lucky enough to have Steve Wilmott, Director of Intelligence and Investigations at the Solicitors Regulation Authority in the studio to discuss cyber security matters as part of our upcoming Practice Management & Compliance channel programme, ‘Cyber Security for Law Firms’.  Here is an exert from that forthcoming interview:

Interviewer: Why might law firms be targeted for cyber security attacks and what parts of the firm are particularly vulnerable?

Steve Wilmott: Well, law firms are very reliant on information and they use that information to simply move clients’ money from one account to another, whether it be to a client or whether it be to another law firm, for example, if there was a conveyance in a house purchase.  And they rely on that information to have the right bank account and the right details so that an individual or a firm receives the money when they should.  Now what we’ve seen in relation to phishing, and we call it – and another terminology is e-mail diversion, is within the course of that transaction a firm may receive an e-mail very late in the transaction to say we are the corresponding firm, we’ve just changed our banking details, don’t send the money to our usual account, this is our new account, please send it there.  Law firms are hugely attractive to criminals and organised crime, and the main reason is they hold huge amounts of money in their client accounts, sometimes many, many millions of pounds.  Only two years ago the Financial Action Task Force – when they undertook a money laundering evaluation of law firms internationally – said the same, that law firms are hugely attractive to organised crime for that very reason.

Interviewer: Attacks and breaches can come from different sources, so what are the main categories that these fall under?

Steve Wilmott: Well, the one that we’re seeing by far is criminal attacks, and they’re simply designed to obtain money criminally, through a criminal act, from solicitors’ firms.  We get one or two where it may well be a disgruntled employee and that usually involves a destruction of data, destruction of information, which can have an effect on a law firm, but the principal one is trying to obtain money from law firms through a criminal act.

Interviewer: And in what ways do a law firm’s own employees present a risk to cyber security?

Steve Wilmott: Well, all law firms should have practices and procedures in place to make sure that the person they are speaking to is genuine, and that they keep their passwords, in particular, secure. If they receive, for example, instructions to send money to another bank account via e-mail or the internet then it’s very wise to make sure that there is a policy in place to ensure the veracity of that change by making further inquiries and not just relying on the initial contact.  What we’ve also found as well is that clients of law firms are receiving information from criminals, for example, they’re just about to pay a deposit on a house, or Stamp Duty to a solicitor, and what we found there is that they’ve also received similar e-mails and those e-mails have said we are your solicitor, we’re just about to receive money from you, but we’ve just changed our bank account, please send it to this account.  It’s still the same law firm, but it’s another bank account, and of course that bank account is operated by criminals, and substantial amounts of money have been stolen direct from clients in that respect rather than law firms.

Interviewer: So if a solicitor or a law firm thinks they’ve been the subject of an attack what’s the best thing for them to do?

Steve Wilmott: If you think you’re under attack and whether this be by e-mail or by telephone contact then immediately stop the contact. If it’s a telephone call then stop that telephone call.  Do not use the telephone that you are using, so do not use any numbers to call that have been given by the individual that has contacted you.  So terminate the call and use another telephone, and use trusted contacts that you can call to try to ensure the veracity of that original call.  Now they can be very clever, sometimes the telephone screen that identifies the caller, the criminals can manipulate that so that it looks as if it is from a genuine bank, so ignore that.  Also ignore any other call, telephone numbers, other than the ones that you know and trust. But the main thing is if you have any form of concern whatsoever then you must terminate that transaction and seek independent means of establishing the veracity of that contact.  The second thing is if you have been the subject of a fraud then immediately contact the police, your insurer and your bank, importantly, and the Solicitors’ Regulation Authority, all of which can help you in various means to assisting in trying to establish, one, who’s done this, two, what the impact on that business will be and, thirdly, trying to recover some of the money that may have been taken.  Perhaps, the three most important things is security software, keeping passwords safe and also, actually, making sure that your banking details are as secure as can be.

A big thanks to Steve for giving up his time to come and speak to us on this important subject.  Until next time…

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SEXISM IN THE LEGAL PROFESSION

It all started with a comment on a LinkedIn profile, and from that acorn, mighty oak trees seemingly started to grow.

On 8th September, Charlotte Proudman, associate tenant barrister at Mansfield Chambers, named Alexander Carter-Silk, senior partner of Brown Rudnick LLP, as someone who had sent her a message on business-oriented social networking site LinkedIn, which she deemed to be inappropriate.  The message, titled ‘PICTURE’ read:

“Charlotte, delighted to connect, I appreciate that this is probably horrendously politically incorrect, but that is a stunning picture !!!

You definitely win the prize for the best Linked in picture I have ever seen

Always interest [sic] to understant [sic] people’s skills and how we might work together

Alex”

Ms Proudman replied:

“Alex

I find your message offensive.  I am on linked-in for business purposes and not to be approached about my physical appearance or to be objectified by sexist men.  The eroticisation of women’s physical appearance is a way of exercising power over women.  It silences women’s professional attributes as their physical appearance becomes the subject.

Unacceptable and misogynistic behaviour.  Think twice before sending another woman (half your age) such a sexist message.

Charlotte”

Seeking an apology from Mr Carter-Silk, Ms Proudman also said she had contacted the CEO of Brown Rudnick LLP to complain, and would also be referring the matter to the Solicitors Regulation Authority.  Mr Carter-Silk commented “Most people post pretty unprofessional photos on Linked in, my comment was aimed at the professional quality of the presentation on linked in which was unfortunately misinterpreted.”

The internet then virtually exploded with people expressing their views, with some calling Ms Proudman’s retort ageist, and her “a twit“, “a silly little lady with an exaggerated sense of self-regard“, a “jumped up feminist” and “a stupid immature female“, and others calling Mr Carter-Silk “a twit“, “a sexist pig from another era“, “inappropriate“, and “a fool“.  And so the argument continued between those on either side of the debate.

And then, just as we thought the whole issue was about to cool, Lord Sumption gave an interview in the Evening Standard in which he said that rushing to achieve equal representation for women at the top of the legal profession could inflict “appalling consequences” on the quality of British justice.  He said that to avoid inflicting damage, those wanting equality would have to be wait, stating:

“It takes time.  You’ve got to be patient…We have got to be very careful not to do things at a speed which will make male candidates feel that the cards are stacked against them.  If we do that we will find that male candidates do not apply in the right numbers.”  He continued “The Bar and the solicitors’ profession are incredibly demanding in the hours of work and the working conditions are frankly appalling.  There are more women than men who are not prepared to put up with that.  As a lifestyle choice, it’s very hard to quarrel with it, but you have to face the consequence which is that the top of the legal profession has fewer women in it than the profession does overall.”

Comments such as these in the interview piece led to Ms Proudman writing an article expressing her concern at the comments:

“His comments encapsulate his deepest fears that power vested in the old boys’ network could come under siege“.  Shadow Justice Secretary and former lord chancellor Lord Falconer also commented that hearing “such comments from one of our senior judges is deeply worrying, not least because the record on diversity is already poor.”

So let’s take solicitors as an example.  As at 2013, 51.4% of solicitors were male, and 48.6% female.  The overall proportion of female court judges is just over 25%.  It therefore seems that female solicitors in the legal profession are willing to put up with the “incredibly demanding” hours of work and the “frankly appalling” working conditions, but even worse, they are then not being given the opportunity to reach the highest potential of those careers.  Which raises the question, how patient do women have to be, Lord Sumption?

Until next time…

THIS WEEK IN THE STUDIO…RICHARD WILLIAMS, SENIOR POLICY EXECUTIVE AT THE SRA

This week we were lucky enough to be joined in the studio by Richard Williams, Senior Policy Executive at the Solicitors Regulation Authority, to talk about the future of Continuing Professional Development for our upcoming programme ‘SRA Competence Statement and Toolkit’, in the Practice Management & Compliance channel.

Here’s a sneak peak at part of Richard’s interview, before the programme’s release date:

Interviewer: And the key document in this is the Competence Statement, isn’t it?  And it’s a fairly extensive document.  Does it run the risk of being over-prescriptive?

Richard Williams: The Competence Statement really just articulates what all practicing solicitors need to do in order to do their job to the best of their abilities. But as an approach, our new approach to ensuring continuing competence is less prescriptive than the current requirement to undertake 16 hours. The 16 hours requirement is, in fact, a blanket approach, it applies to all solicitors, irrespective of their career, their experience, and also their role. With our new approach, solicitors can think about what they need to do in order to deliver a proper standard of service and meet their regulatory responsibilities.

Interviewer: So Principle 5 is what underlies all this, how do we interpret that in the light of the new CPD requirements and the Competence Statement?

Richard Williams: All solicitors have a regulatory requirement to deliver a proper standard of service, and this is articulated in Principle 5. The Competence Statement can help solicitors deliver this particular obligation, and there are two ways in which it does that. Firstly, the Competence Statement articulates what a solicitor needs to do to practice effectively. And, secondly, the Competence Statement in the context of our new approach can be used by solicitors to enable them to reflect on their practice and identify any learning and development they need to do in order to continue to practice effectively.

Interviewer: So how does the SRA believe it’s going to be using the Competence Statement in future?

Richard Williams: We use the Competence Statement as a key mechanism in order to allow us to ensure that the consumers of legal services are protected. It’s really important that solicitors do their job effectively and practice effectively, and the Competence Statement and our new approach to ensuring on-going competence enables us to do this in two ways. Firstly, solicitors have a regulatory responsibility to deliver a proper standard of service, and under our new approach to CPD they’ll have to reflect on the quality of practice in relation to the Competence Statement, and identify where they may have any learning and development needs.  As part of our Training for Tomorrow programme we’re also considering the introduction of an assessment framework. We will consult on this later in 2016. The point of the assessment framework will be to enable solicitors to demonstrate to us that they are competent at the point of admission to the profession, so in that way the Competence Statement will critical as part of ensuring that consumers and legal services are protected.

Interviewer: So some people might say that this looks very much like a box ticking exercise which, of course is what CPD was always criticised for. What would you say to them?

Richard Williams: Absolutely not. Our new approach is much harder than a solicitor attending a course towards the end of the CPD year to gain a specific number of hours. Solicitors will need to think really hard about what it is that they need to do in order to deliver a competent service and meet their regulatory obligations. As a regulator we take this really seriously. As a result, under our new approach all solicitors will be required to make an annual declaration that they’ve reflected on the quality of their practice. They’ve identified their learning development needs and addressed them, and we’ll monitor that.

That’s all for this week – a VERY happy bank holiday weekend to all our readers and subscribers!

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