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Latest News - November 2010
Nuptial Agreements
Nuptial agreements are never romantic but are quite often entered into pre or post marriage, particularly where one or both parties wish to protect their financially position against the possibility of the relationship breaking down.It comes as a surprise to many people that they do not have the certainty or binding effect that one would assume.
A Judge dealing with finances upon divorce is not bound by a nuptial agreement. It is one of the factors to be considered under relevant law. In fact nuptial agreements are not specifically referred to in the relevant act of Parliament but can be considered under the heading of “any other factors”.
The nuptial agreement is treated as evidence of the parties’ intention at the time the agreement was reached. However on the 20th October 2010 the Supreme Court handed down a landmark judgement in a long awaited appeal.
Due to current legislation it would not be possible for the Supreme Court to rule that nuptial agreements are binding but this new judgement certainly moves significantly in that direction. The majority verdict (interestingly the one member that voted against was Baroness Hale the only member with direct knowledge of family law) which will now be a point of law is that “the court should give effect to a nuptial agreement that is freely entered into by each party with full appreciation of its implication unless in the circumstances prevailing it would not be fair to hold the parties to their agreement”.
This appears to suggest a nuptial agreement should be binding unless it can be argued it was not freely entered into or it would somehow be unjust to adhere to it.
It appears that there is still room for argument of non disclosure of information between the parties when the agreement was entered into or unequal bargaining power or a party being pressurised into entering the agreement. However it does seem to be the case that the court’s decision means that it is now more advisable to consider a nuptial agreement to protect your position.