The recent case in which the Court of Appeal ruled that a German heiress was able to rely on a pre-nuptial agreement made with her husband was widely reported as meaning that the traditional view of the courts, that ‘pre-nups’ are little more than persuasive, was shattered.
However, the circumstances of that case were somewhat unusual and the comments of LJ Thorpe, the judge who issued the leading opinion, make interesting reading.
Firstly, he was at pains to make it clear that the law regarding pre-nups needs to be brought into line with that of most other countries, where they are enforceable as contracts and ‘autonomous adults’ have the right to ‘govern their future financial relationship by agreement’. He also commented that the presence of a pre-nup would assist in avoiding the stress, anxieties and expense which often accompany the negotiation of financial settlements on divorce.
Looking at the circumstances, however, the main issue was that both of the parties to the pre-nup were financially astute people (the husband had been a successful banker) and although the husband did not take professional advice before entering into the agreement, he had every opportunity to do so. He fully understood its effect. He had not asked his ex-wife for details of her finances. Crucially, it was the husband’s choice to accept the pre-nup he was offered rather than negotiate.