26 October 2018

With this pre-nup I thee wed…


Oliver Guest
Associate | UK

Nobody enters a marriage thinking it will end, but recent figures from the Office of National Statistics show that 42% of marriages now end in divorce.

When marriages do end, a major source of stress for many couples is not knowing at the outset what the financial outcome of their divorce will be. One increasingly common solution to this lack of clarity is a pre-nuptial agreement.

Technically such agreements are still only highly influential in England and Wales; the court will consider them but they do not have to be bound by them. However, case law increasingly suggests that parties who enter a pre-nup will be bound to its terms.

In KA v MA [2018] EWHC 499 (Fam) for example, both parties were on their second marriage. The husband was clear that he would only re-marry if his future spouse entered a pre-nuptial agreement. The parties discussed the terms of the pre-nuptial agreement with the wedding approaching ever closer. Approximately a month before the ‘big day’ the wife was advised that she would be better off not entering the pre-nuptial agreement and entrusting herself to the court system in the event of divorce, but the wife feared the husband would not marry without an agreement. As a result, she signed the pre-nup.

Nearly 8 years later the parties separated. At trial the wife’s claim that she was under immense pressure to sign the agreement was not upheld as the husband’s position of principle could not be said to overbear the wife’s will, not least because she had freely chosen to reject the professional advice she was given.

As a result, the court gave the wife enough money to rehousing and meet her income needs, but what she was awarded was only a very small percentage of the husband’s total asset base.

KA v MA throws into view once again the significance of pre-nuptial agreements under English law. Party autonomy is increasingly upheld and that makes the negotiations surrounding a pre-nuptial agreement ever more important.

Take for example the case of DP v PB (Financial Provision) (Prenuptial Agreement: Prorogation Clause) [2016] EWHC 3431 (Fam).

Here the parties had negotiated their document carefully. Indeed, they had signed three separate agreements (two in Sweden and one in the US), all of which contained a clause conferring exclusive jurisdiction on the Swedish court. That clause was held to exclude the English court’s jurisdiction to deal with the wife’s claims for maintenance. As a result, she was only able to seek maintenance in Sweden, which has far less generous maintenance provisions than England.

Although no pre-nuptial agreement can oust the jurisdiction of the court, recent case law shows that English courts are increasingly willing to hold parties to the terms they sign up to. Statistically, a marriage is more likely not end in divorce, but 42% is a high number and anybody looking to manage the risks, costs and uncertainty if their marriage does break down would be well advised to give thought to the use of a pre-nuptial agreement.

Oliver Guest Associate | London

Category: Article