The increasing importance of nuptial agreements in light of recent cases and statutory developments

It has been argued that in a free society, adults should be entitled to enter into private contracts without the interference of the state. However, under English law, husband and wife (or a couple in a same-sex marriage) are not free to enter into a legally binding contract in which they can set out their own terms when this right is afforded to other partnerships. The purpose of this paper is to consider whether such protection can or should be afforded to couples when entering into marriage. Divorce has financial consequences beyond those of the legal fees involved; the law holds that, despite the dissolution of the relationship, the parties retain obligations to support their former spouse. Such ‘needs’ are determined by the courts, with all property considered as appropriate for disposal. The increased number of remarriages and the increased age of first-time marriages have led to a growing desire for parties to protect the assets of each party as they enter into the state of matrimony. The right to autonomy in respect of their assets is therefore a point of contention. At a time when the legal system is trying to move to a more accessible, less court-driven system, to make divorce more accessible for individuals without the need for costly legal intervention, it has been suggested that a new approach is required to enable people to devise fair solutions for themselves. The Supreme Court judgment in Radmacher v Granatino [2010] UKSC 42 supported the freedom of parties to determine their own division of assets, stating that nuptial agreements should be given ‘decisive weight’ unless the agreement itself is unfair – and it is the courts who determine what is considered ‘fair’. One could, therefore, suggest that the apparent power of parties to determine the division of assets is not as it seems, as the final decision remains with the courts if the agreement is challenged by either party. The government has recognised the need for clarity in this area of law, initially through the commissioning of Law Commission Report 208, Matrimonial Property Agreements. Shortly afterwards, this was extended to include the financial provision element of divorce, and Report 343, Matrimonial Property, Needs and Agreements, was commissioned. Unusually, the government commissioned Report 343 before the research on Report 208 was complete, such was the importance placed upon this additional element. Their aim was to discern whether a simple statutory framework could be created to guide couples through the division of assets following the breakdown of their marriage. This paper discusses the impact of this judgment on the development of law in this area while critically analysing the future position following the recommendations of Law Commission Report 343, Matrimonial Property, Needs and Agreements (2014). As an area of law of current interest both in legal practice and academia, this paper looks at the law in practice both before and after Radmacher v Granatino and Law Commission Report 343, and considers whether further reform is needed before the law is readily accessible to the ‘common man’