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With rising divorce rates across the world, the interest in pre-nuptial agreements has increased. A pre-nuptial or pre-marital agreement is a contract made between two spouses, prior to entering into the marriage or civil partnership, in order to make provisions for the financial consequences of a possible future separation, divorce or dissolution. In the statistically more foreseeable eventuality of a divorce, people have realised the importance of such agreements and spouses are keen to protect their property and assets from being distributed. However, the question is: How should the courts tackle the issue of determining what value pre-nuptial agreements should hold? This essay shall attempt to highlight the issue concerning the legal position of pre-nuptial agreements and critically evaluate whether or not they should be legally binding.

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Historically, pre-nuptial agreements were given little weight when being considered by the court under the Matrimonial Causes Act (MCA) 1973. Such agreements were deemed to be contrary to public policy as they were entered into in contemplation of, and thereby presumably encouraging, divorce or separation. Aside from undermining the institution of marriage, another reason for this conventional approach is that Parliament had assigned the courts the duty of determining how property ought to be distributed on divorce and hence the parties could not rob the court of its jurisdiction. This concern was outlined in Hyman v Hyman 1925, where the House of Lords (HoL) expressed the economic need to ensure that parties to a marriage did not pass the burden of maintaining their former spouse on to the state. Following a report by the Royal Commission, Parliament made provisions in the Maintenance Agreements Act 1957 in order to relieve parties from their potentially difficult position at common law. The Law Commission further recommended other changes which were implemented in the Matrimonial Proceedings and Property Act 1970 and ultimately reinforced in sections 34 to 36 of the MCA 1973.

In F v F (Ancillary Relief: Substantial Assets) 1995, Thorpe LJ made reference to the very little importance and weight attributed to pre-nuptial agreements and stated that “The rights and responsibilities of those whose financial affairs are regulated by statute cannot be much influenced by contractual terms which were devised for the control and limitation of standards that are intended to be of universal application throughout our society”. Nevertheless, in the following years, the courts have at times, but not always, given weight to pre-nuptial agreements. In X v X 2001, where the agreement had been made after the marriage and in anticipation of divorce, it was held that the fact that the parties themselves had drawn up their own agreement was a very determining factor in deciding what would be the fair and just outcome. Munby J stated that the court would not lightly allow parties who have made an agreement between themselves to depart from it and that the court should be slow to invade the contractual territory, for as a matter of general policy what the parties have themselves agreed should, unless contrary to public policy or subject to some vitiating feature, be upheld by the courts. In MacLeod v MacLeod 2008, Lady Hale reaffirmed the status of pre-nuptial agreements and stated that it was not open to the Privy Council to reverse the long standing rule that such agreements were contrary to public policy and hence void. However, a distinction was made between pre-nuptial and post-nuptial agreements (agreements entered into after marriage) by the Privy Council, thereby declaring the latter valid. 

In the landmark case of Radmacher v Granatino 2010, the Supreme Court set out the circumstances in which a pre-nuptial agreement would be enforceable. In this case, Mr Granatino, a French national, and Ms Radmacher, a German national, signed a pre-nuptial agreement in Germany, four months prior to their marriage in London. The agreement was subject to German law and its effect was that ‘neither party was to derive an interest or benefit from the property of the other during the marriage and on its termination’. Ms Radmacher, coming from a very wealthy family, was the one who insisted on the agreement. Mr Granatino had refused to seek legal advice before or after signing the agreement. He had been earning a high salary at the time of the agreement, left his job to pursue his phD after getting married. The couple had two children and were married for 8 years before separating. In spite of the agreement, after their separation, Mr Granatino made a claim for financial relief and was awarded a lump sum of £5,560,000 by Baron J, in order to enable him to buy a home for himself and his children. Although having taking the pre-nuptial agreement into consideration, Baron J had decided to attach little weight to its importance due to the conditions under which it had been signed. The wife successfully appealed and the Court of Appeal found that Baron J had been wrong in her deliberation and expressed its views on the status of pre-nuptial agreements for the purposes of s 25 MCA 1973. Thorpe LJ referred to his own comments in F v F, whereby he mentioned that judges should give due weight to the marital property regime to which the parties have willingly entered. The Supreme Court dismissed the husband’s appeal by a majority of eight to one. It was held that the court should consider a nuptial agreement that is freely entered into by each party with a full appreciation of its implications to be valid, unless in the circumstances prevailing it would not be fair to hold the parties to their agreement. The ruling does not make pre-nuptial agreements binding in all cases but, in some cases, an agreement can have decisive weight. Such agreements will not prevent a divorcing party from asking the court to decide how assets should be divided, but, depending on the circumstances, the court might make its decision in the light of the terms of that agreement. 

Furthermore, the court will take into account all the circumstances of the case when deciding whether it is fair to uphold any particular agreement. The Supreme Court said that it would not be desirable to lay down rules that would fetter the flexibility that the court requires to reach a fair result. However, the Court considered that, in future, it would be natural to infer that parties who entered into a pre-nuptial agreement, to which English law was likely to be applied, intended that effect should be given to it. A press summary set out three issues which arose in relation to the agreement for the court to consider: 

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