UK may make pre-nups binding
London has been called the divorce capital of the world because pre-nups are not binding. (Shutterstock)
LONDON - Pre-nuptial agreements signed by couples on how to divide their assets in case of divorce could become binding for the first time under English law if a reform being discussed by the government’s legal advisers goes ahead.
London has been called the divorce capital of the world because such agreements are not binding in England and the lower earner in a couple can benefit financially from the court’s view that property be shared equally.
On Tuesday, the Law Commission launched a public consultation into whether courts should be stripped of their ability to overrule such financial agreements.
“That would be a major reform. We can see advantages of binding pre-nups but we are very much alive to the complex issues that a reform would have to address,” Elizabeth Cooke of the Law Commission told reporters.
A decision by the Supreme Court in October boosted the chances that pre-nuptial agreements will be enforced in England.
The court ruled in favour of a German heiress in a divorce dispute with a former investment banker, making pre-nups binding provided they are deemed to be fair.
The court supported Katrin Radmacher in a multi-million dollar dispute, deciding that the agreement she signed with her ex-husband to protect her fortune should be binding in England, even though it was signed in Germany.
“I know some people think of pre-nuptial agreements as being unromantic, but for us it was meant to be a way of proving you are marrying only for love,” Radmacher said after the ruling.
English courts had previously considered pre-nuptial agreements not binding when deciding who gets what when a marriage fails, unlike their counterparts in other parts of Europe.
“The Supreme Court’s decision was made in the context of the existing legislation... And it is still down to the courts to decide on a case-by-case basis how much weight to give to any agreement the couple may have made,” the Law Commission said.
In its public consultation, the commission asks whether such contracts should determine the fate of all assets owned by a couple or be more specific, applying for example to those inherited or acquired before marriage.
It also proposes that courts retain the power to waive such an agreement if it does not provide for the needs of children or leaves one or both partners reliant on state funds.