Derbyshire Legal Talk: June 2009
Legal Talk with Flint Bishop Solicitors.
Question: What is the current position of the Courts in relation to pre-nuptial contracts entered into before marriage or civil partnership?
ANSWER: Currently in England pre-nuptial contracts are not considered to be legally enforceable, however this position is being challenged by a recent case. In April 2009, one of Germany's richest women went to the Court of Appeal seeking to enforce a Pre-Nuptial Agreement calling for her former husband to get nothing if they divorced. Katrin Radmacher, a paper industry heiress worth an estimated �100million, claimed that her estranged husband was seeking to renege on a deal that the couple made three months before they married in London in 1998, in which he agreed not to claim against her if they separated.Although the Pre-Nuptial Agreement would have been fully enforceable in Germany or France, in July 2008 the English High Court ordered her to pay her husband a lump sum of �5.56million. Ms Radmacher is challenging that award, and if she succeeds the ruling could mean that Pre-Nuptial contracts will become legally enforceable in England.The Court of Appeal will need to weigh up a conundrum between respecting the autonomy of parties to agree a financial settlement at the outset of their marriage, and the need, in the event of divorce, to protect the financially weaker party and any children. The Law Commission is in the process of looking into making forthcoming legislation on the issue, and the courts are likely to be cautious at this time.Nevertheless this case is just one of the many future cases that will endeavour to push the English Courts nearer to that of the American and other European systems which recognise such Agreements as a binding contract.This case demonstrates the potential need to review an existing Agreement, for example when children are born, and to review as to whether a Deed seems 'fair' in order to persuade a Court that weight should be given. It also strengthens the Court's requirement to ensure that before signature there is full disclosure of each other's assets, and that each person receives independent legal advice.The case continues, but it is clear that there will continue to be cases such as this, and that the English Courts should continue to acknowledge the modern approach where the freedom to agree a contract is at the heart of all modern, commercial and legal systems.I would recommend that in circumstances where there is disparity of wealth at the time of marriage, or civil partnership, such Deeds are considered and entered into. There must, however be a sufficient period of negotiation and completion prior to the ceremony itself.