More Recognition for Pre-Nups?
By: Emma Peart
The decision in Radmacher has potentially given even more credibility to Pre-nuptual agreements in the UK.
The case concerns a German industrial heiress and her Ex-Husband, a Former Investment Banker, who entered into a Pre-Nuptial agreement with the idea of protecting the interests they would inherit through family business.
The Judgement itself states that the approach of English Law is different to that of Scotland and most of Europe and most other international legal systems. While most other legal systems see a pre-nuptial agreement as a contractual agreement to be honoured, English Law has historically let the Court be the decision-maker in relation to financial settlements. However Radmacher has overviewed this general stance to potentially make English Law concurrent with European and indeed much international law by giving effect to the agreement by the Supreme Court upholding the Pre-Nuptial agreement.
Potentially, if more credibility is given to pre-nuptial agreements in the UK then this could mean that Pre-Nuptial agreements become even more popular as a way of protecting business assets that may be at risk in divorce settlements internationally, as they would be given even more worldwide recognition. It is also interesting to note that the initial pre-nuptial agreement was signed in Germany. Could it be seen that the English Courts perhaps wouldn’t be willing to overturn a document that would perhaps be valid in another country?
While it is an interesting step by England to turning towards the status of other countries, it should perhaps be taken with a pinch of salt. The decision in Radmacher states that “the Court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement.” This potentially leaves it open to the Court to determine if the agreement has been entered into freely, or there has been undue influence upon one party to enter into the agreement for example.
The matter is open for review. The Law Commission will publish a Consultation Paper in 2011. There is likely to then be a Report with pressure for a draft bill and Legislation. It could be argued that it is at least a sign that England is following suite with most other legal systems on this matter.
