“With 33.5% of my worldly goods I thee endow…” (Part II)

Author: Teresa Cullen

As was widely reported in the press the Law Commission’s report Matrimonial Property Needs and Agreements proposed that pre-nuptial agreements should be enshrined in law. At the moment pre nuptial agreements in England and Wales are not binding on the court, although they can be taken into consideration by the judge. Our cousins north of the border in Scotland already have the ability to enable couples to enter into binding pre-nuptial agreements.

In much of continental Europe, and in most of the states in America, a similar view prevails.

The Law Commission has proposed that new legislation should be passed in order to allow “qualifying Nuptial agreements” to be binding and enforceable. There will be a series of safeguards which will apply to agreements reached either pre- or post-nuptially. In order to be binding they must:

  • not involve fraud, undue influence or misrepresentation;
  • be signed no less than 28 days before the wedding; and
  • contain a statement that the couple understand the agreement is a “qualifying nuptial agreement” that will partially remove the court’s discretion to make a financial order.

Both parties must have had legal advice and have made full disclosure of their financial affairs to the other.

Once the agreement complies with these criteria it will be binding and the court will have no discretion to make an order which differs from it. Couples cannot however enter into a pre-nuptial agreement which makes no provision for the spouse/proposed spouse’s needs.

It may however simply move the nature of litigation in family disputes from issues of family law into issues more within the field of contract negotiation, of arguing over whether full disclosure has been made, whether there have been issues of fraud or undue influence.

On any basis “qualifying nuptial agreements” do provide couples with greater autonomy to determine the financial outcome of the separation. Recent cases show the level of uncertainty which prevails at the moment, including unlucky and mis-named Victoria Luckwell whose husband had made three pre nuptial agreements promising not to make claims against the family assets. The agreements were overturned by the judge, and her penniless husband was awarded £1.2 million.

Teresa Cullen, Partner, Fladgate LLP (tcullen@fladgate.com)

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