The recent Supreme Court ruling on Pre Nuptial Agreements in the case of Radmacher and Gramatino is of great importance to many people, including those who are already married and who have entered into an agreement, and those contemplating marriage and considering whether to have an agreement. Until now such agreements were not legally binding although a Judge could take them into account to a limited extent in reaching a decision.
In a landmark decision the Supreme Court considered Pre Nuptial Agreements for the first time and they effectively laid down an "unless test", "...the Court should give effect to a Nuptial Agreement that is freely entered into by each party with the full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to their Agreement". The Court also made it clear that it remains the position that no agreement between the parties can oust the jurisdiction of the Court which has a statutory duty to determine the appropriate financial solution on a divorce.
The Radmacher case involved a wealthy German wife who sought to rely on the Pre Nuptial Agreement that she and her husband had entered into. The Supreme Court upheld a Court of Appeal decision to deprive the husband of the bulk of his award of approximately £5.6m at the original Hearing of his claim.
The Judgment can be seen as a big step forward towards Pre Nuptial Agreements being decisive and provides much needed clarification. The Law Commission is currently examining the status and enforceability of Pre Nuptial Agreements and will publish a report probably in 2012.
In the meantime there will undoubtedly be an increase in the use of Pre Nuptial Agreements which can hopefully avoid potentially lengthy and stressful settlement negotiations and legal proceedings in the event of a relationship breakdown. They require considerable skill in their planning and drafting so as to take account of a number of factors. The DMH Stallard Family Team is highly experienced in drafting such Agreements and advising clients on them.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
