Pre-nuptial agreements: what is “fair”?

Supreme Court Justice Lord Wilson has recently expressed his views on spousal maintenance and his support for binding pre-nuptial agreements. On 20 March 2017, he gave an insightful speech to the University of Bristol Law Club on the development of family law and commented that:

“My own view is that we have now reached the stage in which, if acting with appropriate care and understanding, parties should be allowed to elect the sort of marriage which they want.”

Lord Wilson was a member of the Court of Appeal that had ruled in Radmacher v Granatino (2009) that Mr Granatino should be held to the pre-nuptial contract agreed with Ms Radmacher. He recalled that:

“One view is that in those circumstances parties should not be able to opt for marriage-lite, in which the law’s verdict about the extent of their obligations on divorce in the light of all the circumstances which have arisen is overridden by what they chose to agree perhaps many years earlier. I wonder, however, whether by modern standards, that view is too patronising. Does it make our law inappropriately intrusive into personal, adult, arrangements?”

Nuptial agreements are not binding in the UK but will carry weight with the court on a future divorce depending on the circumstances. The Supreme Court upheld the decision of the Court of Appeal taking the view that the contract would not be upheld if it would not be “fair” to hold a party to it. However, how do we determine what would be fair and how can we attempt to foresee what the future holds?

The starting point is to ensure that the nuptial agreement provides for changing circumstances, such as any future children that may be born or adopted and potential changes in income for the parties’. There should also be an opportunity for the agreement to be reviewed by the parties after a certain time, often after 3 – 5 years. A pre-nuptial agreement can also be converted to a post-nuptial agreement after marriage in order to carry more weight with the court in the future.

Lord Wilson referred to continental systems that encourage parties to provide for the financial consequences on divorce before marriage and considered is this could assist with maintenance. One area of contention on divorce is how long into the future one party should make spousal maintenance payments to the other. It is possible for spousal maintenance payments to continue from the husband to the wife (and in appropriate circumstances vice versa) “for many years following the divorce, sometimes (unless she remarries) even until one of them dies”. He also commented:

“The trouble is that it is usually unrealistic to tell a wife, left on her own perhaps at age 60 after a long marriage, that, following payments for say three years, she must fend for herself. So we judges have to strike a difficult balance. In my view it betrayed a lack of insight when, last month, [one peer] suggested that, when we do decide to award long-term maintenance, we are motivated by antiquated notions of chivalry. . . . Apparently a new study confirms that, notwithstanding the existing powers of the court, husbands tend to make a far stronger economic recovery from divorce than wives.”

With changing views on the appropriate term for spousal maintenance, it may be difficult to judge what would be fair under a nuptial agreement in the circumstances.

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