Just when you think you know the score, all of a sudden the law can change.

Over the last decade there has been a move toward Judges accepting the terms of Pre-Nuptial Agreements as being binding. If the Pre-Nuptial Agreement has not been binding then it can be said to be of great weight, and as far as possible Judges have decided that they should stick to what the Pre-Nup says. We had a big case coming out of the Court of Appeal about 5 years ago called Radmacher which talked about the bindability and encouraged the bindability of Pre-Nups.

On top of the Judge made law, we had the Law Commission saying that draft legislation needed to be prepared to make Pre-Nuptial Agreements binding.

Against this background, however, a senior group of Judges made an announcement on 5th April that the majority of couples who sign a Pre-Nup are wasting their time. They went on to say that only the very wealthy can expect their wishes to be honoured and that most Courts would ignore Pre-Nups and base their decisions on “fairness”.

It is no wonder that member of the public, let alone family lawyers, struggle with the concept of Pre-Nups when on the one hand Judges say they should be adhered to in the main, whereas on the other a different group of Judges take a contrary view. Perhaps it is more about the Judiciary wishing to exercise their autonomy and discretion free from statutory regulation and Government dictat. Who knows?

What we do know, however, is that Pre-Nups have been around for a very long time and the general consensus of opinion is that the Courts will respect the Pre-Nup where it produces an outcome that is reasonably fair. An example of a Pre-Nup being unfair would be where the children ended up in a situation where they did not have a roof over their heads. Manifestly, that type of Pre-Nup scenario would need to be changed by the Court.

If Pre-Nups are going to be respected by the Court they need to be properly drafted and they need to be balanced and fair. There is no point in drafting a Pre-Nup that gives all of the assets to one of the parties since this is likely to be regarded as being unfair and therefore unenforceable. It is much more likely that a Pre-Nup will be upheld by the Courts where proper provision is made for both parties. Very often Pre-Nups can be structured in such a way that financial provision increases with the passage of time and may be enhanced when children are born into the family. The more balanced, fair and sophisticated the Pre-Nup, the greater chance it will be respected by the Courts.

There is no point in having a Pre-Nup where both parties bring into the marriage similar capital/wealth, but that is often not the case and to that extent one party might want to preserve their pre-marital wealth (and the other party might want also to respect that) and a Pre-Nup in those circumstances can be a formidable ally if the marriage ends unhappily.

Caption: Andrew Brooks. Partner, Family Team