The legal position of prenups and postnups in England – is it all about to change?

Once reserved for the American glitterati, their terms splashed across the headlines of celeb magazines, prenups are now becoming more popular on our side of the Atlantic.  However, regardless of common perception, nuptial agreements (pre/post) are still not legally binding in England and Wales.

Despite signing up to a prenup, either party may still make an application to the courts for financial provision upon divorce.  In 2010, the Supreme Court in Radmacher (formerly Granatino) v Granatino [2010] UKSC 42] said that it will uphold a prenup that was “freely entered into by each party with a full appreciation of its implications, unless in the circumstances prevailing it would not be fair to hold the parties to their agreement”.  It also said that the court will look at all of the circumstances of the case, both at the time the agreement was entered into and at the time of the divorce, and consider whether it is fair to hold the parties to the terms they agreed.  Some important considerations for the judge are:-

• whether each party had independent legal advice;
• whether each party was aware of the other’s financial situation (i.e. was there financial disclosure?);
• whether there was any risk of duress (e.g. was either party under pressure to sign the prenup - this is particularly relevant if the agreement was signed just before the wedding);
• whether the financial provision under the agreement meets each party’s, and any child’s, financial needs; and
• whether the terms of the agreement are fair.

At the moment, it is therefore not possible to draft a water-tight English prenup as the courts retain the discretion to order different financial provision in the event of a divorce.  Many clients find this very frustrating, particularly international clients from jurisdictions that recognise prenups or enforceable marriage contracts. 

Changes on the horizon

A Law Commission report on whether nuptial agreements should be given more recognition under English and Welsh law is due to be published on Thursday 27 February.  It is anticipated that the Law Commission will recommend that prenups/postnups should be enforceable provided certain safeguards are in place, which could include the factors set out above.  However, it is important to remember that this report is only a recommendation to government.  The report is likely to include a draft bill that would give effect to its recommendations, but the bill still needs to make it through parliament before any changes would come into force. 

Nuptial agreements raise controversial arguments about the sanctity of marriage and the issue of individual autonomy versus patriarchal court intervention.  With the election looming next year, it remains to be seen whether any party will endorse the Law Commission’s recommendations and whether the issue will make it on to the already overcrowded political agenda any time soon.

Visit our family law blog again next week, where we’ll be looking at the parameters of the Law Commission’s proposals once the report has been released on Thursday.