It’s time for the Government to legislate prenups
I am often taken to one side by elderly female peers to beseech me to reform the law, as they are reluctant to marry or remarry their long term partners because of fearing the loss of assets, should there be a break up, that would be detrimental to their children. One might be surprised at the energy of the beating hearts under the ermine. But one should not be, because the Office for National Statistics has shown that the number of silver splitters, that is divorcees over 65, has more than doubled in the last few years. It is also reported that they are going to lawyers for advice on prenuptial agreements (prenups). Those who have been through one divorce do not want to experience the consequences a second time. Others decide not to remarry.
Prenups are agreements made by a couple prior to marriage setting down how they would divide their assets in the case of divorce (postnups can be made after marriage.) They are popular and harmless. They are protective. They offer an escape from bad law and they represent freedom of choice and contract. Why can't we legislate for them now?
The Law Commission is reviewing the whole of financial provision law but with no guarantee that the government will legislate any time soon to reform it. But there is a short cut to a less controversial reform, which would save costs, make mediation easier and free up the courts to a significant extent. That is immediate enactment of a law to place prenuptial and postnuptial agreements on a statutory footing. The Law Commission recommended this 11 years ago and drafted a Bill which can be found in their report on Matrimonial Property (2014 no.343). Validity would be subject to the receipt of independent legal advice, the usual constraints of contract law, full disclosure and a gap of 3 weeks before the wedding. The proposal was welcomed. It is a free standing area of law and even if the rest of reform is delayed, enacting this would enable couples to avoid the uncertainties, expense and bitterness of the current financial provision law, and indeed of any future law to come. It would also solve the alleged problem of cohabiting couples' rights.
Prenups are growing in popularity, not only in international marriages, where often one of the couple if not both come from a jurisdiction where such agreements are common and taken for granted, but also because many couples believe that the enforceability of such agreements was settled by the judgment in Radmacher v Granatino in 2009 where the Supreme Court held that they were not contrary to public policy and should be upheld unless they were unfair.
Unfortunately, that judgment opened the door to challenges to those agreements by requiring them to be "fair", a concept that lies in the eyes of the beholder judge. That has meant that excess judicial discretion has led to constant challenges to the validity of agreements which the couple, having had legal advice at the outset, believed were valid until advised that it might be worth attacking them when the break up occurs. One of the most notorious concerned an heiress who married a hotel concierge. There was a last minute prenup with insufficient legal advice, which would have left him with nothing. He was awarded housing and a lump sum by the court despite the prenup.
These challenges to prenups resulting in their being set aside leave real doubt over the ability to predict any current agreements' validity. Are they worth making if judges are going to revert to the use of discretion, which incidentally is the source of the problems in financial provision law?
Other countries including Australia, Ontario, France, and New Zealand have sorted it by legislating to make them enforceable. They have set aside the old common law presumption against prenups and disregard the fear that they would undermine lasting marriages. There is no evidence that the divorce rate is higher in countries where they are enforceable.
It is now 14 years since Radmacher and it is quite extraordinary and indeed damaging to the administration of family law that there has been no legislative response. Such is the stranglehold of those addicted to the superiority of judicial discretion and tailor made law. We need to get on with this and not wait for the pot of gold at the end of the rainbow, which is wholesale reform of our antiquated financial provision law.
Baroness Ruth Deech DBE is Chair of the House of Lords Appointment Commission and a crossbench peer. A former Principal of St Anne’s College, Oxford, she has held key roles in legal and regulatory bodies, including the Bar Standards Board and the Human Fertilisation and Embryology Authority.
