Canadian Lawyer

48 J U L Y 2 0 1 5 w w w . C A N A D I A N L a w y e r m a g . c o m for as long as it lasts and when it's over it's over, no strings attached." Joseph says a "prominent family lawyer" in Toronto just finished a two-week trial in which the lawyer was being sued by an unhappy client based on a marriage con- tract he drafted. "There's not enough insur- ance to protect yourself against the claims that can arise out of these contracts." When lawyers retire, they have to main- tain run-off insurance, which is forward- looking liability insurance based on things they did in the past. Joseph says it's impos- sible to get enough run-off insurance and most lawyers can't afford it when they retire, to protect ourselves from future claims that could arise from contracts you may have done 20 years earlier. Cohabitation contracts have become fertile ground for liability claims against family law lawyers. "Not only do we live in a society where nobody wants to take responsibility, but we also have this blaming matrix. The client initially blames the other spouse, then blames the other lawyer, then blames the judge, and when they run out of people to blame, they blame their own lawyer," says Joseph. Ron Shulman, of Shulman Law Firm PC, says over the last five years, he has seen more requests from clients to "contract out of any legal responsibilities arising from a common law relationship." He says, "Their object is to co-habit and that's about it. They want to keep their legally independent or single status. Their view is it's not going to be a permanent relationship and they will figure it out later on." He says it isn't just young profession- als seeking these "no-strings" contracts; older, middle-aged clients are too. But the reality is this kind of agreement is ripe for challenge in court down the road — some- thing that could be expensive for the client and the lawyer. "They very often get chal- lenged," he says. "What happens if you have kids and one of the individuals stops work- ing and something happens?" Eventually, clients will start to under- stand that such an agreement may not be as simple, or beneficial as they originally thought. "The agreement is the same as a marriage or separation agreement. The requirements still apply — there must be financial disclosure, there must be indepen- dent legal advice for both sides, you must consider potential power imbalances before signing, and those considerations have to be made by the lawyer before it is signed, in order to consider if it will stand up and be enforceable," says Shulman. Like Joseph, Shulman knows of lawyers refusing to draft cohabitation agreements for people who have a "short-sightedness" about their request, on the basis of the potential liability if something goes wrong. "When they come in and say they'd like to preserve their dating status, yes we want to live together but no impact on finan- cial arrangement, they're usually surprised when we start asking them questions about what would happen if they had kids or bought a house. I don't think they are think- ing that far," says Shulman. If the couple gets married the rights of parties change radically. "Married couples have statutory property rights, so what you can have is a couple comes in with nothing and they enter into a co-tenancy agreement and then get married three years later. Then 15 or 20 years later, they have a significant property asset. It's really difficult to draft something to protect your client and your- self in those circumstances," says Joseph. That often means the conversations Joseph has with clients end "rather badly." But he's not alone in his stance on refusing to draw up cohabitation agreements he sees as being unfair. In fact, he says a num- ber of senior family lawyers he knows will not draft domestic contracts. "I think you will see a trend towards it because the peo- ple I've talked to about it are very respected family lawyers and they are just saying 'no more.' That's because it's impossible to have that crystal ball to be protecting yourself. "One of the favourite sports now in family law is challenging domestic contracts. As I said to a client recently, the fees involved in obtaining a marriage contract/cohabita- tion agreement are relatively modest. The fees involved in defending one are very significant." Lawyer Brahm Siegel, a partner at Nathens Siegel LLP in Toronto, says there is a way to tackle the problem and it involves a "Compact" — a set of stan- dard procedures he proposes be used in all cases involving both marriage and cohabitation agreements. He presented the idea at a family law summit in March. L E G A L R E P O RT \ FA M I LY L AW hildview_CL_Mar_14.indd 1 14-02-07 10:42 AM

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