A prenuptial agreement (widely known as a Pre-Nup) is a legal document that outlines how assets will be divided in the event of a divorce of separation. In England and Wales pre-nups are not yet automatically legally enforceable despite calls, for many years, for them to be.
Historically pre-nups were unenforceable as against public policy. However, in 2010 the Supreme Court decision in Radmacher v Granatino [2010] UKSC 42 ruled that courts should give effect to a prenuptial agreement that is freely entered into by each party, with a full appreciation of its implications, unless in the circumstances it would not be fair to hold the parties to the their agreement. The decision did not mean that all pre-nups would be binding but it certainly moved the emphasis on to holding the parties to their agreement.
Since then we have seen an increase in parties seeking such agreements with the courts making clear that an agreement meeting the necessary requirements and formalities should be upheld if challenged on divorce.
Despite this the family court still have wide discretion to override the terms of the agreement in the event of divorce. In particular, in cases where one party can prove that the agreement would leave them in a financially vulnerable position or cause significant hardship a judge may alter the terms of the agreement.
In 2014, over 10 years ago, the Law Commission of England and Wales published a consultation paper suggesting that pre-nuptial agreements should be made legally binding and not subject to the courts assessment of fairness. In may other countries pre-nups are already enforceable.
In spite of this, legislation has not been introduced to effect this and judicial discretion still has the ability to undermine the usefulness of pre-nups. In the Law Gazette article Crossbench peer and former Bar Standards Board chair Baroness Deech makes very clear to the MOJ ‘to go back to the ministry and tell them to get on with it’.
”Go back to the ministry and tell them to get on with it”