Pre-nuptial agreements

This briefing deals with the law in England and Wales except for section 6 which deals with the position in Scotland.

What is a pre-nuptial agreement?

A pre-nuptial (or pre-marital) agreement is an agreement made by a couple before they marry or enter into a civil partnership, which sets out how they wish their assets to be divided if they should divorce or have their civil partnership dissolved.

What is the legal status of pre-nuptial agreements?

Pre-nuptial agreements are not automatically enforceable in courts in England and Wales.

Traditionally, pre-nuptial agreements were unenforceable as being against public policy. However, in a landmark ruling in 2010, the Supreme Court ruled that courts should give effect to a pre-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 their agreement. The ruling does not make pre-nuptial agreements binding in all cases; the fairness of upholding any particular agreement will be considered by the court on a case by case basis. However, some pre-nuptial agreements will now have effect in the absence of circumstances which would make this unfair.

Law Commission recommendation for enforceable agreements

In February 2014, following consultation, the Law Commission published its final report, Matrimonial Property, Needs and Agreements. Among other things, it recommended the introduction of “qualifying nuptial agreements” as enforceable contracts that would enable couples to make binding arrangements for the financial consequences of divorce or dissolution. These agreements, which would have to meet certain requirements, would not be subject to the court’s assessment of fairness. Couples would not be able to contract out of meeting the financial needs of each other and of any children.

At the time of writing, the Government has not yet made its final response to this recommendation.

Law Commission project on financial remedies on divorce

The Law Commission has started preliminary work on a new project assessing the reform options for the laws governing finances on divorce and the ending of a civil partnership. As part of the new review, the Law Commission intends to scope whether the issues covered in its Matrimonial Property, Needs and Agreements project need to be reviewed beyond its 2014 recommendations.

In April 2023, Lord Bellamy, Parliamentary Under-Secretary of State for Justice, said the Government did not intend to legislate on pre-nuptial agreements while this new review is taking place.

Private Member’s Bills

Baroness Deech (Crossbench) has introduced a Divorce (Financial Provision) Bill [HL] as a Private Member’s Bill in several parliamentary sessions, most recently in the 2021-22 session. Among other things, her bills would have provided for binding pre-nuptial and post-nuptial agreements, with some exceptions. None of the bills have completed their passage through Parliament.

The position in Scotland

In Scotland, whilst pre-nuptial agreements have not been the subject of extensive case law, as a general concept they are generally regarded as being enforceable and not contrary to public policy.

Specifically, sections 9 and 10 of the Family Law (Scotland) Act 1985 make provision for ‘matrimonial property’ in Scotland to be shared fairly on divorce. Fair sharing is usually equal sharing unless ‘special circumstances’ justify different proportions. Special circumstances include an agreement between the parties as to the division of matrimonial property on divorce.

There are some restrictions on a couple’s freedom to contract. It is now well‑established that by virtue of section 16 of the 1985 Act, the court has power to set aside a pre-nuptial agreement when it was not “fair and reasonable” at the time it was entered into, and subsequent case law has developed this test with reference to a number of individual principles. The fact that the terms of an agreement led to an inequitable outcome is not itself enough to justify varying it or setting it aside.