Resolution, the family lawyers group, has hailed the recent landmark Supreme Court decision on pre-nuptial agreements as "a victory for fairness and common sense".
The decision to enforce the pre-nuptial agreement in Radmacher v. Granatino in favour of a German heiress worth a reputed £100m marked a radical shift in English law. Previously the courts deemed such agreements contrary to public policy on the grounds that they encouraged couples to split up, and could result in the exploitation of vulnerable and financially weaker parties -- historically women who might be left with children to care for.
Responding to the judgement, Resolution chairman and deputy district judge Andrew Greensmith said:
"We know that financial uncertainty is one of the most stressful elements of any divorce, and a pre-nuptial agreement can be a useful tool for couples wishing to reduce this uncertainty.
"However, until now the enforceability of pre-nups has been very uncertain because they were seen as contrary to public policy and an attempt to override divorce laws. That principle has been swept away by the Radmacher judgment, which paves the way for these agreements to become more mainstream and less the preserve of the rich and famous."
He continued: "With second marriages on the rise, people marrying later, and many couples entering marriage with money and property already to their name, it is likely that there will be more and more demand for pre-nuptial agreements. This much-needed judgment clarifies their status and is a victory for fairness and common sense".
Fairness factors
The judgment is clear that pre-nuptial agreements are presumed to be enforceable except where they lead to unfair outcomes.
Although the courts will decide the issue of fairness on a case-by-case basis, the Supreme Court did offer some guidance on the factors that should be taken into account.
First, a pre-nup must be "freely entered into by each party with a full appreciation of its implications". This means that both parties should have the option of seeking independent legal counsel on the agreement or it could be adjudged void. Evidence of duress, fraud or misrepresentation on either side will likewise strip an agreement of its legitimacy.
Second, the circumstances surrounding the pre-nup at the time it was signed may be relevant. For example, would one of the parties have refused to enter into marriage without it (as the German heiress claimed in Radmacher v. Granatino)?
Third, an agreement that compromises the reasonable requirements of any children to the marriage should not be enforced.
Fourth, if the effect of enforcing a pre-nup would be to leave a party with less than his or her relationship-generated 'needs' (e.g., accommodation, healthcare, etc), then this is also likely to be unfair.
Fifth, an agreement that precludes 'compensation' for one party who, as part of a joint decision, gives up their career to look after children and/or the home, is also unlikely to be enforced.
Related links:
- Pre-nup judgment a "major step forward" (Resolution)
- German heiress wins prenup battle (The Solicitor)
- Til divorce us do part: Supreme Court reviews prenup law (The Solicitor)
- Pre-nuptial agreements (Findlaw.co.uk)
- Getting married (Findlaw.co.uk)
- Family law Q&A (Community)
- Find a family law solicitor (Contact Law)
