Publicity surrounding the Supreme Court’s judgment in Radmacher (rather than the outcome of the case) is likely to be the single most important factor in increasing demand for pre-marital agreements.
Last week the court, by a majority of eight to one, dismissed the husband’s appeal because ‘respect for individual autonomy’ demanded that the court should give weight to a nuptial agreement. The leading judgment (at paragraph 75) provides in relation to the key issue that ‘the court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to the agreement’.
Opinion will be divided as to how successful the Supreme Court has been in this case in achieving a balance between recognising individual autonomy and the protection of vulnerable individuals.
It has been an anachronistic feature of English law that individuals have freedom to contract in a wide range of quite onerous financial situations, where there is an imbalance of bargaining power and no requirement for independent legal advice. Yet in relation to personal relationships, that freedom has previously been restricted on the basis that the court knows better. With Radmacher, the Supreme Court has moved one step closer to recognising the importance of individual autonomy in family law.
However, in one sense the court has exacerbated the issue of gender discrimination by indicating that it will be more acceptable to contract out of ‘sharing’ than ‘needs’ and ‘compensation’. It has also eroded the differences between the financial provision likely to be awarded by the court for married and unmarried couples.
The words of the justices will be analysed, debated, clarified and further weighed in future cases. Perhaps legislation will follow the Law Commission report expected in 2012. In the meantime, there are many unanswered questions and unresolved issues.
For example, there is a lack of clarity around whether the test of fairness is in practice a presumption, which would be an ‘impermissible judicial gloss’ (per Lady Hale paragraph 138), and about how the ‘fairness’ test will be interpreted. It is unclear whether the weaker financial party’s needs for housing will be limited to accommodation while any children are in education. It seems that the legal distinction between unmarried and married parents is being eroded, and it is questionable whether that is desirable.
And so, after seven months of deliberation, we still do not know whether pre- and post-marital agreements are legally enforceable contracts, subject to variation on divorce. The leading judgment implies not, but Lady Hale’s dissenting judgment at paragraph 138 suggests that this implication is incorrect, and that the majority believes they are legally enforceable contracts. This issue could be far from a ‘red herring’ (paragraph 63) if the marriage ends prematurely by death rather than divorce.
Practitioners need also to decide whether the parties should enter into a pre-marital agreement and a post-marital agreement. Clearly, if there are changes in circumstances that might render the agreement unfair, a post-marital agreement will be essential. The present practice, though, of entering into a post-marital agreement shortly after marriage is more questionable. The safest option is still to have both.
The decision reduces slightly the gap between the law of England and Wales and that of our European neighbours. However, there will need to be a sea change in approach and attitudes, reflected in legislation, to avoid the possibility of the English family law system being marginalised in future. And giving thought to our clients, simplification of the confusing terminology is long overdue.
Lady Hale also questions the appropriateness of a court consisting of eight men and one woman deciding a case with a gender discrimination issue. Should there be positive discrimination to increase the number of female justices? Perhaps there should.
Alison Bull is team leader associate at Mills & Reeve. The views expressed are personal
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