Pre-Nuptial Agreements - Change of Approach

By Joanne Lawrence-Hall, Associate, Family Law Department, Kerman & Co LLP

In a landmark decision given on 2nd July, the Court of Appeal has reversed the decision of Mrs Justice Baron, in the High Court, to award the sum of £5.85m to a husband who had entered into a pre-nuptial agreement not to make any financial claims against his wife in the event of their separation. The wife, who is German, has a fortune in excess of £100m. The husband, who is French, is from a wealthy family and was a high earning banker at the time of the marriage but who chose to give up that lucrative career to become a research scientist. His award has been reduced to an amount to cover his substantial debts and a loan to enable him to provide a suitable home for the children of the family until the youngest daughter reached 22 years of age.

Pre-nuptial agreements had long been held as being void for reasons of public policy as they were seen as being inimical to the institution of marriage. In this judgment their Lordships make the point that marriage is no longer viewed as a sacrament and that divorce is commonplace. As recently as 1995, Lord Justice Thorpe, who gave the leading judgement in Radmacher, declared, in the case of F v F, that pre-nuptial agreements would be of limited significance in this jurisdiction, where matrimonial matters were regulated by statutes applicable to all, not by individual contracts. However, over the last decade, there has been a supertanker like turn, culminating in this latest decision.

The view now seems to be that the English courts should toe the European line by letting competent and informed adults regulate their own financial affairs (this agreement would have been enforced in the parties’ native lands of Germany and France). However, the court retains its wide discretion to vary as well as to uphold such agreements and where an agreement does not meet with judicial approval it is likely to be declared void. Even in the present case, the husband did not go away empty handed, care must, therefore, be taken in drafting the agreement and both parties will need to take professional advice, to give the agreement the best chance of being upheld. The case is likely to come before the House of Lords but no further ruling will be made until the Law Commission has considered the status of pre-nuptial agreements.


Joanne Lawrence-Hall is an associate in the Family Law department at Kerman & Co LLP. If you have any enquiries relating to this article or family law matters, please contact Joanne on 0207 539 7272 or by email at [email protected]