Late last month, Baroness Deech brought a motion in the House of Lords, ‘That this House takes note of the law relating to prenuptial agreements’.

The debate came against the backdrop of Baroness Deech having (of course) long pursued financial remedies reform through her Divorce (Financial Provision) Bill. She has gone on record as saying that she and Baroness Shackleton were ‘misled’ when, in 2020, they were ‘guaranteed’ a review of the financial elements of divorce during the passage of the no fault divorce legislation; that we are lagging 50 years behind nearly every other country in the western world; and that financial remedies law as it stands ‘is so antagonistic and unreformed that it undermines the alleged good points of the no-fault divorce law’.

Baroness Deech’s case for reform

In the absence of a commitment to wholesale review of the law, Baroness Deech makes the case for discrete reform focusing on nuptial agreements. As Baroness Shackleton put it, ‘I ask the Minister, rather than being distracted by the temptation to consider overall [financial remedies reform], to concentrate on the reasons why Government cannot deal with this isolated stand-alone area of the law … It is akin to having a leaking roof and water dripping down the walls, but not having the roof fixed until you have decided what colour to paint the walls. Eventually, the delay will cause the roof to collapse, with all the collateral damage that causes.’

The over-arching tenets of Deech’s position (with the authors’ comments interwoven) were that:

• Pre-nuptial agreements offer little by way of solution for those wishing to ringfence particular assets in the event of divorce. Radmacher v Granatino opened the door to challenges to pre-nups and legislation is needed to close that down. ‘Excess judicial discretion’ has undermined – ‘wrecked’ – their usefulness. Is this really correct? Would this be better characterised, couples should now expect to be held to their agreements as a starting point and any discretion is within much narrower bounds, generally focused on ensuring fairness but giving the wealthier party (where there is one) the comfort of avoiding an unbridled sharing claim?
• How to define needs, and who should meet them, remains problematic despite the FJC’s work. What is fair, and whether that should be applied to a freely entered into pre-nup, is another undermining issue. See above. Doesn’t this work against discrete nuptial agreements reform (or certainly any reform which enables discretion to be retained to assess fairness/the meeting of needs?
• Deech’s Divorce (Financial Provision) Bill provided that pre-nups should be as binding as any other contract, provided there was no duress, there was legal advice and full disclosure. That remains her position. Of course, practitioners’ and stakeholders’ main objection to the Bill has always been its lack of fairness cross-check. Deech doubled down on this during the debate, saying ‘it was unfortunate that [in the Law Commission’s proposal in its 2014 report] there was a potentially destructive discretionary element … namely that the parties could not, by agreement, opt out of meeting financial needs, undefined’. She goes so far as to say (in fairness, she says borrowing from Sir Nicholas Mostyn’s sentiments) that AI will soon be able to produce an agreement that would be bound to be upheld as valid because AI would know what is meant by ‘needs’. Also noteworthy that her bill didn’t use the word ‘independent’ in the context of legal advice.
• The growth in the number of silver-splitters (divorcees over 65) – she suggested a 75% increase in 20 years – was adding urgency to the need for reform. This is true; we are often faced with a client contemplating a second or subsequent marriage, sometimes with adult children from a previous marriage or marriages, retired and without significant ability to stockpile (and indeed with a spouse-to-be who has also retired, with or – worse from this perspective – without means of their own), and who we often advise that the safest way forward in case of divorce is not to marry at all. Of course that is at odds with the tax advantages of marrying if the marriage then ends through death.
• Deech says she has never received a letter in support of the current financial remedies law (and conversely, many letters from members of the public anxious for reform). This is surprising; it is squarely at odds with the only evidential basis for reform we have, the Fair Shares report, published in November 2023 and showing that the vast majority of those who have navigated divorce – with or without lawyers – have been able to reach what they regard as fair outcomes under the current law.
• Urgency is fuelled by the fact that nuptial agreements are becoming ever more common. Deech cited that 13 to 20% of couples have pre-nups. Whilst they have certainly become ever more prevalent, we focus on a particular demographic, at the wealthy end where an outcome without a pre-nup would likely lead to there being a sharing claim after the meeting of needs. Fair Shares found that the median value of divorcees’ total asset pool was £135,000. 17% of divorcees had no assets to divide, 63% had assets under £500,000. Whilst Fair Shares said that 13% of divorcees reported having a pre-nup, it was said that this was likely a considerable overestimate.
• The Law Commission’s 2014 draft bill is oven-ready and can be enacted in isolation, independently of wider financial remedies law. There are few practitioners who would disagree that nuptial agreements need a statutory footing. The Resolution position is that to have a statutory basis for nuptial agreements, with suitable safeguards, will give couples greater certainty that their agreement will be upheld and binding and therefore greater autonomy. Preserving the possibility of review by the court of an agreement which has one or more hallmarks of serious unfairness or which would leave one party in a situation of real need, has got to be right. Whether any reform should be done in isolation is a more difficult issue. The Law Commission would prefer to look at things in the round and it is hard to see how one would detach reform of nuptial agreements law from potential reform around some important themes which run through them – needs, matrimonial and non-matrimonial property, spousal maintenance. Financial remedies reform is unlikely to be seen as pressing (unlike cohabitation reform). But it seems unlikely that Government, once it has delved into the realities, is likely to see nuptial agreements reform as pressing either, given that they are a minority sport and not the main driver of excessive court delays. In reality, the Government’s desire to do anything is likely to be dictated by whether it perceives any immediate savings through reform, e.g. a tangible reduction in court time being taken up by contested nuptial agreements. Of course if there isn’t a fairness cross-check in any reform, that is likely to result in increased costs to other departments, e.g. through an increase in the social welfare bill. To this end the fiscal case for reform hasn’t been made out.

Baroness Shackleton and others’ positions

Deech’s plea for immediate reform was echoed by Baroness Shackleton, who emphasised the practical challenges arising from a discretionary system, with the absence of a statutory footing for nuptial agreements resulting in difficulties in advising clients and unnecessary litigation (she cited five ongoing cases of her own involving challenges to nuptial agreements). She also said that there would be greater incentive to enter marriage if the law of enforceability of prenuptial agreements was more certain, likely correct.

One aspect with which we respectfully disagreed in Shackleton’s presentation was that non-court dispute resolution is being hampered by the current financial remedies law. She referred to comments made by Helen Adam, chair of the Family Solutions Group, at an event over a year ago, before the Law Commission’s 2024 report was published. One of the authors left that event feeling that there had been an unwarranted level of ‘lawyer bashing’, the undercurrent being that lawyers were undermining mediation, not just through uncertain law and inability to advise, but because they could. That is simply not my experience, as a solicitor who sends clients to mediation or as a mediator. Mediation clients often use the breadth of discretion to tailor their outcomes and feel like they are leaving with a ‘win win’, having negotiated outcomes in the shadow of the (discretionary) law rather than sticking rigidly to a position. Paradoxically, think of the private FDRs – and we have all had them – at which the pFDR judge, in a desire to be helpful, alights on a precise outcome which in fact can make negotiation and settlement a lot MORE difficult if one spouse fundamentally disagrees with the indication. A bracket of outcomes enables greater autonomy but doesn’t stymie agreement.

Several other members of the House were forthcoming in their support of the motion, whilst being concerned to see that there remains some kind of needs/fairness cross-check. The Lord Bishop of Southwell and Nottingham, Baronesses Butler-Sloss and Featherstone, and Lords Faulks, Farmer and Meston, all expressed support for the court retaining an element of discretion to make provision for divorcing couples, notwithstanding the existence of a nuptial agreement. Many referred to wanting to protect financially weaker parties and guard against power imbalances. Some said that an increasing ‘normalisation’ of nuptial agreements risked leading to undue pressure on prospective spouses to sign away their rights without fully comprehending the longer-term, more serious consequences. Concern was expressed for those whose circumstances change dramatically after the pre-nup is signed, e.g. through serious illness. From the religious standpoint, it was felt that marriage isn’t just an economic transaction, but it is a covenant, meaning that the legal framework must foster the values of partnership and protection for the vulnerable.

Critique

Political ‘airtime’ for family law reform will, of course, be welcomed by practitioners across the country, not least because it has been over a decade since the publication of the Law Commission’s 2014 report, which continues to guide and inform our drafting of nuptial agreements. However, with respect to the Members of the Upper House who engaged in this debate, we have reservations as to whether the need for such reform is quite so pressing.

The first, and overarching, reason for this is that whilst the current discretionary system is complex, divorcees are, overwhelmingly, able to resolve their financial claims, and are satisfied with the results. The Fair Shares report revealed that less than one-third of divorcees made use of legal services in relation to their financial arrangements, and the majority of those who resolved matters themselves did so voluntarily, not deterred by legal costs. Where legal practitioners were involved, legal costs were typically lower than some headlines would have people imagine, with 42% of those surveyed spending less than £3,000 on legal/associated fees. And, strikingly, satisfaction rates amongst those who resolved their finances on divorce were shown to be high: 90% of financial arrangements made by parties themselves worked out as expected, dropping slightly to 76% where arrangements were made via lawyers or a judge. This is not to say the law as it stands is perfect, and doubtless, nuptial agreements serve an important role in allowing couples to ‘opt out’ of the discretionary financial remedies system and take an element of control over their financial futures in the event of divorce. Nuptial agreements which are carefully prepared and sensibly negotiated by lawyers, taking into account the range of possible circumstances in which the couple concerned may find themselves in the future, can make for fair agreements which are upheld on divorce. This is why ever more couples are entering into nuptial agreements.

However, this leads to our second, perhaps most fundamental concern with the proposal for reform: even the most diligent legal practitioners cannot guarantee that a nuptial agreement will bring about a fair outcome in the event of divorce. Circumstances change: children are born; careers end; people fall ill. And it is true that the circumstances at the time a couple enters into a nuptial agreement sometimes need looking at on the breakdown of the marriage: duress is not always evident at the time of signing. And what about children? Those who enter into nuptial agreements are more likely to fall into the category of people whose income exceeds the CMS income ‘ceiling’, meaning such couples may find themselves in court, or mediation, irrespective of the existence of a binding nuptial agreement.

Whilst court time and costs would, doubtless, be saved if nuptial agreements could not be challenged on divorce (or even if only in much narrower circumstances than at present), it is important to remember that the vast majority of couples do not enter into nuptial agreements. This is not just because nuptial agreements are not automatically binding and enforceable; the majority of people simply do not have/expect to have the level of assets needed to warrant entering into an agreement because sharing claims are irrelevant to them. Whilst Baroness Deech referred in her speech to the ‘immense value’ of a straightforward law on prenups to those who don’t get legal aid but can’t afford legal advice, we cannot see that a change in the law would have any impact on them. We suspect that the impact of any such reform on our overloaded court system would, therefore, be small.

Case law which reveals the successful challenges to nuptial agreements in recent years serves, in our view, to demonstrate the risk of legislating to make such agreements binding and enforceable. In both KA v MA [2018] EWHC 499, and Ipekci v McConnell [2019] EWFC 19 – two cases which were referred to in the House of Lords debate – the financially weaker party was awarded a higher capital award than their nuptial agreement provided for by a High Court judge, on account of their needs. Surely, this shows that not all nuptial agreements will, or indeed can, bring about a fair result if enforced by the letter.

As Baroness Berridge noted, legislative reform is perhaps ‘not as well baked’ as some may suggest. Crucially, this is something which the Law Commission itself has concluded. In its December 2024 scoping report, the Law Commission was clear that, whether or not the draft Nuptial Agreements Bill should be introduced depends on whether the government chooses to proceed with further reform to wider financial remedies law. If the current role of ‘needs’ within the system was to change, this would, the Law Commission has said, ‘fundamentally change our recommendation for Qualifying Nuptial Agreements’.

Government position

It remains to be seen whether this debate will have an impact on the Government’s legislative agenda. Whilst Lord Timpson, on behalf of the Minister of State, Lord Ponsonby, assured the Lords that the government is looking into reform, he too brought to the Lords’ attention the Law Commission’s reservations about reforming pre-nuptial agreement law in isolation from wider financial remedies reform. Crucially, he provided assurances that the government’s reform agenda in respect of the rights of unmarried couples – reform for which there is a pressing need, and which we suggest would impact the average couple far more than nuptial agreement reform – is being actively worked on by government. Practitioners should look forward to seeing the government’s further work in all of these areas.