Family law yeasayers contend that prenups could improve marriage rates
17 January 2011 | By Katy Dowell
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It is a depressing statistical fact that 43 per cent of first marriages now end in divorce, the highest level it has ever been. Yet divorce law has largely been developed through the courts, with successive governments having resisted meddling in this controversial area.
The Coalition has started taking tiny steps towards reforming family law and last week (12 January) the Law Commission published its views on the future of prenuptial agreements in England and Wales.
Family lawyers have long called for reform of the laws governing the enforceability of prenups. In October last year Radmacher v Granatino arrived in the Supreme Court (see box) and, for the first time, the enforceability of the agreements came under the spotlight.
Prenups, the Supreme Court ruled, should be given “decisive weight”. Such a decision could only be applied in the specific circumstance of that case, but the ruling was a watershed moment in terms of the agreements.
Family lawyers saw a significant rise in the number of enquiries about marriage contracts and pressure mounted on the Government to act to bring the UK up to date with contemporary jurisdictions.
While not compulsory for all, the Law Commission proposes that prenups should become the norm in the UK to enable divorcing couples to divide the assets accrued in the duration of marriage.
Mishcon de Reya head of family Sandra Davis describes the proposed new document as a “prenup lite” contract. “It’s obviously designed to protect money that’s family-derived, has come out of a first divorce or has been built up by the effort of one of the parties,” she says.
On the surface, the introduction of prenups by a Conservative-led government seems contrary to Tory policy. Traditionally the school of thought has been that such a contract is inherently unromantic and therefore anti-marriage.
The Law Commission report opposes this and goes so far as to suggest that these contracts would encourage more people to marry because they bring certainty about the possible outcomes.
“Reform would bring welcome certainty for some,” the Law Commission states in its consultation document.
The most contentious issue surrounding prenups is fairness. The Law Commission states that any contract should be fair to both spouses, although this is a concept both it and the profession struggle with.
Henry Brookman, name partner at niche family firm Brookman Solicitors, says: “The Law Commission is once again confronting the same old problems: how do you define what’s fair for both parties?; how do you create a contract that perhaps is to hold good for 50 years or more?; and how do you ensure that the economically stronger party does not dominate negotiations?”
In its consultation the Law Commission states that any agreement must reach the standard law of contract, which is not derived from family law; each party must agree to the contract; each must get something from it; both parties must understand the fundamental nature of the agreement when it is signed and not be put under undue pressure or influence by another party before signing; and finally that any contract must be in written form.
According to Manches partner James Stewart it is inevitable that judges will be called upon to decide what can be determined
“We have some of the best family judges in the world,” he says. “There should be scope for intervention where contracts are deemed unfair or contrary to the needs of the children.”
This prompts one Manchester-based partner to respond: “They’ve done little to move things on from the current position. The judiciary has already shown that it favours prenups.
“It’s all about Tory policy and, with David Cameron being pro-marriage, it seems to be his policy. Saying things such as all couples should be forced to go to mediation before they divorce is mad. The politicians don’t live in the real world.”
Stewart says there is a strong feeling in the family law community that the Government is pushing its reform programme through too quickly.
Major cuts to family legal aid budgets and compulsory mediation are controversial topics.
“Compulsory mediation is expected to come in in April and there aren’t enough mediators to cope,” says Stewart. “This Government and its approach to family law reform will be very interesting. With prenups and the attack on public funding it will mean there’ll be a rise in the number of litigants-in-person, which will mean longer cases and higher costs for everyone.”
Family lawyers have broadly welcomed moves to enshrine prenups in law, saying that this is long overdue. But navigating the stormy waters that surround this sensitive issue will always be problematic and this is just the beginning of a long journey. In the meantime, the courts have signalled their intention to support such a contract.