Prenuptial agreements in UK divorce law (2)

Prenuptial agreements were not traditionally regarded as binding by the English divorce courts but there are strong signs of change. One factor behind this is the increasingly international character of people’s lives. Pre-nuptial agreements are sometimes recognised in other jurisdictions – notably the United States and our European neighbours- and the English courts increasingly take notice of this.

Say, for instance, that a couple marry in the United States and enter into a pre-nuptial agreement prior to the marriage. Both parties are legally represented and the negotiations are at arms’ length. Such an agreement very likely is legally enforceable in the US. Suppose then that the wife returns to England which is the country of her birth and commences divorce proceedings here. The husband might remain in the US and feel quite aggrieved that his wife is attempting to get around an agreement legally enforceable in the US by the simple expedient of petitioning for her divorce in England.

He therefore applies to the English courts for a stay of the divorce proceedings in England and files a divorce petition of his own in the US. In circumstances such as these the English courts have to decide which is “the most convenient forum” for the divorce to take place. In particular, they have to decide whether the divorce should be allowed to proceed in England or whether those proceedings should be stopped so that the divorce can take place in the US. They have to weigh a number of competing matters against others such as where the assets of the marriage are located, where the parties of the marriage are, what advantages and disadvantages attach to the divorce proceeding in one jurisdiction rather than the other etc.

The point is, there is at least one case in which the fact that the parties had entered into a pre-nuptial agreement in the other jurisdiction was regarded as one of the factors that should be taken into account in staying the proceedings here in order to enable matters to proceed overseas. The fact that the parties had entered into a binding agreement with independent legal advice was regarded as something the court could legitimately take into account in making its decision as to whether the divorce should proceed here or not. In that particular case the court decided that the case here should be stayed in order that the US courts could take jurisdiction and in those latter proceedings the pre-nuptial agreement would be taken into account and enforced.

Indeed, the court went rather further and expressed an opinion (although it was no more than this) that just because the English courts do not in general enforce pre-nuptial agreements it does not mean that other jurisdictions which do enforce them are necessarily wrong. This did indicate perhaps a straw in the wind and there is little doubt that people want to be able to regulate their own affairs. Government is also considering proposals on this subject although no firm conclusions have been reached.

Naturally, circumstances such as the above are uncommon and do not affect most marriages which take place between UK citizens and which have no overseas element. Nevertheless, this overseas aspect is becoming more common and affects more and more people as time goes on.

The fact that there are such cases may also be expected ultimately to have an effect on purely domestic marriages in certain circumstances. For instance, it has long been the case that the courts could take into account “any other matter ….which in the circumstances of the case the court may consider relevant”. In practical terms this provision is almost always overshadowed by the needs of the children, the fact that there are not sufficient assets to make adequate provision for both parties, the income and earning capacity of the parties (as set out on the right)  but it is not inconceivable that a pre-nuptial agreement might be a relevant circumstance in some cases.

This was first thought likely to arise in a case where both parties had had independent legal advice, entered into an agreement before the marriage and where a childless marriage has broken down within a year or two. Under such circumstances it was thought quite conceivable that a court might take into account a reasonable pre-nuptial agreement. In fact the decision of the Court of Appeal in Radmacher v Granatino surprised most in the profession. That case subsequently went to the Supreme Court and the decision of the Supreme Court may have changed the weather in the UK so far as prenuptial agreements are concerned. The law about prenuptial agreements is in a state of development at the present moment.

To find out more about the current status of prenuptial agreements in English divorce law please continue.

Spouses involved in divorce in England always want to know on what basis the UK divorce law decides financial issues between husband and wife if the Courts have to decide the issue. Indeed, this is what is at the heart of most divorce cases. If there is a dispute it is more likely than not to be about money whether that is about periodical payments for a spouse, dividing the equity in the former matrimonial home or divorce and pensions. In fact, the relevant principles are set out in Section 25 of the Matrimonial Causes Act 1973 which, essentially, reads:-

”It shall be the duty of the court in deciding whether to exercise its powers ….. to have regard to all the circumstances of the cases, first consideration being given to the welfare while a minor of any child of the family who has not attained the age of eighteen.

25 (1) It shall be the duty of the court in deciding whether to exercise its powers …. to have regard to all the circumstances of the case including the following matters, that is to say –

(a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future;

(b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;

(c) the standard of living enjoyed by the family before the breakdown of the marriage;

(d) the age of each party to the marriage and the duration of the marriage;

(e) any physical or mental disability of either of the parties to the marriage;

(f) the contributions made by each of the parties to the welfare of the family, including any contribution made by looking after the home or caring for the family;

(g) …the value to either of the parties to the marriage of any benefit (for example, a pension) which … (by reason of the divorce) ..that party will lose the chance of acquiring;…”

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