Prescription: Prenup

Prenuptial agreements may soon have the weight of an enforceable contract if Parliament adopts the recently published recommendations of the Law Commission in their Report on Matrimonial Property, Needs and Arrangements. The effect of this will be to pour statutory cement on the foundations already laid by the Courts in a number of landmark cases. Once void on public policy grounds for fear they would encourage separation or divorce, prenuptial agreements have gained increasing prominence in recent years as society evolves and the English Courts have attempted to keep pace.

In Crossley v Crossley [2007] EWCA Civ 1491, the parties (each worth several millions and for whom it was not their first marriage) entered into a prenuptial agreement which provided that they each keep their own assets and claim nothing from each other in the event of their divorce. On the breakdown of their marriage, the wife asked the Court to ignore the prenuptial agreement but the court held the agreement to be of "magnetic importance" and rejected the wife's attempt to obtain a further settlement.

The seminal case of Granatino v Radmacher [2011] 1 AC 534 neatly demonstrated the impact of a prenuptial agreement even where the court elected not to adhere to its terms. In that case the wife was worth £100 million yet the husband received only £1 million for himself and £2.5 million towards a house which was to be returned to the wife when the youngest child reached the age of 22. In contrast, Heather Mills and Paul McCartney did not sign a prenuptial agreement and following their infamous divorce Ms Mills was awarded £24 million after her short marriage to the Beatles star who had a net worth of approximately £400 million. A

s the law currently stands in England and Wales, the Courts retain a discretion whether to uphold the terms of a prenuptial agreement. The Courts are likely do so if its terms are considered fair, but they are not bound to do so and may simply take it into account when having regard to all the circumstances of the case by imposing a lower award.

The Treatment

The Law Commission recommends that legislation should be enacted which will limit this discretion so that provided an agreement makes reasonable provision for the needs of the parties and the interests of any minor children, the courts will be prevented from making any orders which are inconsistent with its terms. Upon divorce, such agreements will be treated as enforceable contracts and any...