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Options for Reform of Prenuptial Agreements: Law Commission Consultation Paper
By Christopher J Sherliker

Following the landmark decision of the Supreme Court in Radmacher v. Granatino on 20th October 2010, Family Partner Maeve O’Higgins and Assistant Solicitor Sheata Karim look at the Law Commission’s newly-published and long-awaited consultation paper on marital (including prenuptial) agreements.

In the Radmacher case, involving a fabulously wealthy German heiress, her £100 million fortune and her French former banker husband, the husband's appeal against the decision of the Court of Appeal was dismissed by a majority of the Supreme Court (eight out of the nine members).

The essential point of principle established by this landmark decision is that the court will now give effect to a prenuptial agreement freely entered into by both parties with full appreciation of its implications, unless it would not be fair to hold the parties to the agreement. There is now effectively a legal presumption that prenups will be upheld unless good reason can be shown to the contrary.

However, it is not currently possible under English law to make a binding marital agreement which cannot be interfered with by the court.

The Law Commission began its work on formulating proposals for possible reform of the law concerning marital agreements in September 2009, following the results of a research project on the views and approaches of family law practitioners to marital agreements, carried out by an academic at Bristol University. Further research was carried out last year in light of the impact of the Radmacher decisions (and the earlier case of MacLeod), which have led to a dramatic increase in the number of clients seeking prenuptial agreements.

The Law Commission's consultation paper, published on 11th January 2011, seeks views on whether couples should be able to make binding agreements which determine their financial arrangements if their marriage ends, without involving the courts, or whether the courts should continue, as now, to play a role. Further, it seeks views on whether such agreements should encompass all of a couple's assets or relate only to non-matrimonial property, that is pre-acquired, gifted or inherited property.

There is also a discussion of what, if any, safeguards might be required to protect the economically weaker partner and to ensure that the agreement provides for the needs of any children, so preventing the economically weaker partner becoming reliant on state benefits.

The full consultation paper is available on the Law Commission website. The consultation period closes on 11th April 2011. After considering the responses received, the intention is to produce a draft Parliamentary Bill by the autumn of 2012. Following the landmark decision of the Supreme Court in Radmacher v. Granatino on 20th October 2010, Family Partner Maeve O’Higgins and Assistant Solicitor Sheata Karim look at the Law Commission’s newly-published and long-awaited consultation paper on marital (including prenuptial) agreements.

In the Radmacher case, involving a fabulously wealthy German heiress, her £100 million fortune and her French former banker husband, the husband's appeal against the decision of the Court of Appeal was dismissed by a majority of the Supreme Court (eight out of the nine members).

The essential point of principle established by this landmark decision is that the court will now give effect to a prenuptial agreement freely entered into by both parties with full appreciation of its implications, unless it would not be fair to hold the parties to the agreement. There is now effectively a legal presumption that prenups will be upheld unless good reason can be shown to the contrary.

However, it is not currently possible under English law to make a binding marital agreement which cannot be interfered with by the court.

The Law Commission began its work on formulating proposals for possible reform of the law concerning marital agreements in September 2009, following the results of a research project on the views and approaches of family law practitioners to marital agreements, carried out by an academic at Bristol University. Further research was carried out last year in light of the impact of the Radmacher decisions (and the earlier case of MacLeod), which have led to a dramatic increase in the number of clients seeking prenuptial agreements.

The Law Commission's consultation paper, published on 11th January 2011, seeks views on whether couples should be able to make binding agreements which determine their financial arrangements if their marriage ends, without involving the courts, or whether the courts should continue, as now, to play a role. Further, it seeks views on whether such agreements should encompass all of a couple's assets or relate only to non-matrimonial property, that is pre-acquired, gifted or inherited property.

There is also a discussion of what, if any, safeguards might be required to protect the economically weaker partner and to ensure that the agreement provides for the needs of any children, so preventing the economically weaker partner becoming reliant on state benefits.

The full consultation paper is available on the Law Commission website. The consultation period closes on 11th April 2011. After considering the responses received, the intention is to produce a draft Parliamentary Bill by the autumn of 2012.

Added: 3rd February 2011

Christopher J Sherliker is a partner for Silverman Sherliker LLP who provide legal solutions across a spectrum of requirements.  Find out more about Silverman Sherliker LLP.

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