Prenuptial Agreements, are they worth the paper they’re written on?

This week I attended a meeting where the client was seeking advice in relation to a Prenuptial Agreement (PNA’s). Taking a detailed note in client meetings is an integral part of a trainee’s role. The note enables the solicitor to manage the case effectively and attending the meeting certainly aids my learning and understanding of the law as I am able to see everything I learnt at university and on the LPC put into practice. This week that was prenuptial agreements.

So… what is a prenuptial agreement exactly? A prenuptial agreement is a contract which is entered into by the parties either contemplating or in preparation of an upcoming marriage. The agreement details what will happen to their individual assets in the event that the marriage breaks down. Most PNA’s will concentrate on the protection and regulation of assets, but they can also dictate the jurisdiction of the financial proceedings, should they occur.

I thought that I would, therefore, use this blog post to inform you all about the quasi contractual nature of PNA’s and how the Courts decide what degree of weight should be attached to the agreement. Are they worth the paper that they are written on?

The case of Radmacher v Garantino 2010 was a landmark case in the history of English divorce law. Prior to Radmacher, PNA’s had been viewed as somewhat opposing to public policy. PNA’s are not subject to any statutory guidance, however, the ruling in Radmacher resulted in the PNA’s being given effect so long as they were entered into freely and where both parties intended for the agreement to have legal effect and had a full appreciation of the consequences of entering into the agreement. That being said, the jurisdiction of the Court is unfettered and as such, varying factors can either enhance or lessen the weight that the Court will attach to the PNA as part of ‘all the circumstances of the case’ within the meaning of Section 25 (1) MCA 1973. However, the Court must also use its discretion to ensure that it would not be unfair to hold one to the agreement. It should be noted that it is clear that the Courts are now a lot more willing to attach the suitable weight to the PNA.

The judgement in Radmacher gave definitive guidance as to the treatment of PNA’s in proceedings for ancillary relief following a divorce. The case law that has since developed reveals what some practitioners would consider to be a move towards enforceability.

In the case of B v S, Mostyn J summarised the principles (as he interpreted them) that had emerged from Radmacher. To see the full summary can be found here.

However, the principles are as follows. A Court will give effect to a PNA if:

  1. It is entered into freely by each party with a full appreciation of its implications;
  2. There has not been a material lack of disclosure;
  3. It should be entered into with no element of duress, fraud or misrepresentation;
  4. There was no exploitation of a dominant position;
  5. The agreement doesn’t prejudice the position of any children of the family;
  6. The agreement is fair and does not leave one party in a position of real need;

However, it was also noted in the judgement that there must be a consideration by the Courts for the respect of individual autonomy and allowing married couples to decide what happens to their assets following divorce.

We are now 5 years on from the case of Radmacher and it is likely that the case law in this area will continue to develop. It is inevitable that many will view the outcome of Radmacher as desirable. Divorce law in England and Wales is discretionary and is thus uncertain. It is likely that people will view the ruling as a way to battle the uncertainties and protect their financial position. The underlying aim of the ruling in Radmacher was to give greater sovereignty to the parties to a marriage in deciding how to distribute their property following the unfortunate breakdown of their marriage. However, the case law suggests that the courts will carry on approaching PNA’s on a case by case basis with the needs of the parties and the fairness of the agreement being the salient consideration in the Court’s decision whether to uphold the agreement.

There is a notable move towards giving PNA’s the contractual status they are subject to in other jurisdictions. It would seem that the PNA’s have been afforded a quasi-contractual nature at present and my guess is that they will continue to gain popularity due to the new readiness to uphold them. That being said, the Court cannot be precluded from exercising its jurisdiction in financial matters and I for one don’t think that is likely to change any time soon.

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