Do pre-nups have any value?

Naomi Withey
Email: n.withey@waldrons.co.uk

The purpose of this article is to provide the reader with a factual summary of the law as it currently stands with regard to pre-nuptial agreements. It is a general guide only and should not be taken as legal advice. Please call Naomi Withey on 01384 811 811 for personal legal advice on family law and divorce matters.

Pre-nuptial agreements

The starting point for financial matters within divorce proceedings in English Law is that of equality of division of assets between both parties. Because of this pre-nuptial agreements are not enforceable in English law; meaning that one party cannot seek an order in a court that the other party complies with the obligations set out in the agreement.

This view originated in the oft quoted 1929 case of Hyman v Hyman where the House of Lords stated that a private agreement between two spouses cannot oust the courts’ jurisdiction to make fair financial provision following divorce.

The matter was examined again in 1998 in a Home Office consultation which produced a 50:50 split between the pro’s and against.

The Family Division of the High Court, stated that they had ‘reservations about whether the law should strive to encourage pre-nuptial agreements’.

The eventual outcome of this exercise was that the Government said agreements should not become enforceable, but they would be allowed unless any one of six circumstances occurred.
These being:

The existence of a child of the family
The non-receipt of legal advice by one of the parties to the agreement
The causing of significant injustice by the implementation of the agreement
Material non-disclosure
The signing of the agreement less than 21 days before the marriage.

Although such agreements are not strictly enforceable, there have been a number of cases in recent case history where a pre-nuptial agreement has been taken into account.

It’s useful to consider one specific case in which a wife argued she should not be bound by the terms of a pre-nuptial agreement and in his decision the Judge put to himself sixteen ‘test’ questions.

These being:

Did the wife understand the agreement?
Was she properly advised as to its terms?
Did the husband put her under undue pressure to sign it?
Was there full disclosure?
Was the wife under any other pressure?
Did she willingly sign the agreement?
Did the husband exploit a dominant position, either financially or otherwise?
Was the agreement entered into in the knowledge that there would be a child?
Has any unforeseen circumstance arisen since the agreement was made that would make it unjust to hold the parties to it?
What does the agreement mean?
Does the agreement preclude an order for periodical payments for the wife?
Are there any grounds for concluding that an injustice would be done by holding the parties to the terms of the agreement?
Is the agreement one of the circumstances of the case to be considered under s.25 of the Matrimonial Causes Act 1975 ?
Does the entry into this agreement constitute conduct which it would be inequitable to disregard under s.25
Am I breaking new ground by holding the wife to the capital terms of the agreement?
Insofar as maintenance for the wife is concerned, if I am wrong in my interpretation of the agreement as above, and if the agreement does preclude a maintenance claim, would it be unjust to hold the parties to that aspect of the agreement?

On balance and in this specific case the Judge concluded that the wife should be held substantially to the terms of the pre-nuptial agreement, finding that, despite her arguments, she “ signed it without pressure.”

So the outcome of this debate is that in English law, as it presently stands, it is impossible to say that the provisions of a pre-nuptial agreement will be translated into a court order in the event of a divorce.

On the other hand, there is no reason why a person who wishes to protect themselves financially in divorce proceedings should not enter into an agreement, and every reason why they should. The worst that can happen is that should the marriage break down, the agreement is ignored and at best the judge will take the provisions into consideration.

For further info contact Naomi Withey n.withey@waldrons.co.uk