Pre-Nuptial Agreements are not at present binding under English Law. However, the Law Commission have recently launched a consultation process to ask the public’s views as to whether such agreements entered into prior to marriage should indeed be binding in the event of separation.
As the law stands, where a couple enter into an agreement setting out what should happen to their finances in the event of separation, it is only at the Court’s discretion as to whether this agreement is then taken into account. It is true that, after the Supreme Court decision last year of Radmacher v Granatino, the Courts are displaying a far greater willingness to place weight on such agreements. However, they are not required to be bound by the agreement. This is viewed by many as being somewhat old fashioned as it fails to allow a couple the autonomy to regulate their financial affairs. However, there are also concerns that, if Pre-Nuptial Agreements were to be binding, this could be to the detriment of the vulnerable and that, furthermore, the very nature of a Pre-Nuptial Agreement serves to undermine the constitution of marriage.
The aim of a Pre-Nuptial Agreement is to set out clearly how the couple’s finances should be separated in the event of divorce. This would hopefully ensure that litigation is minimised as each party would be bound by that agreement and the cause for dispute would therefore be limited. Even though the Courts are not at present entirely bound by Pre-Nuptial Agreements, where there is a disparity in the wealth positions of the parties when entering into marriage, or where inherited wealth has been received or is expected, such agreements are of particular relevance.
It is felt that greater clarity in this area of the law would be to everyone’s benefit and it is therefore hoped that there will be a good response to the consultation process.