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November 2010
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January 2011

Landmark Prenuptial Case In United Kingdom "Radmacher"

            The newly established Supreme Court of England and Wales, which replaced the House of Lords, issued a landmark ruling in 2010 which finally put to rest the uncertainty as to whether prenuptial agreements are valid in the United Kingdon. The Supreme Court held that there is a presumption that a pre-nuptial contract (which is referred to as an "ante-nuptial agreement") should be upheld under Section 25 of the Matrimonial Causes Act of 1973, if it is voluntary and entered into without undue influence and with informed consent. The husband, a French national, and wife, a German National, were married in London in 1998.  Three months prior to the marriage, upon the wife’s suggestion, the couple signed an ante-nuptial agreement which provided that neither party would acquire any benefit from the property of the other party during the marriage or upon its termination.  Upon the signing of the agreement, the wife’s family would transfer a further portion of its substantial wealth to the wife.  The couple had two minor children and separated in October 2006 after being married for 8 years.  The husband applied to the High Court for financial relief.  The Court reduced the weight given to the ante-nuptial agreement because of the circumstances in which it was signed.  Husband, at the time of signing the agreement, declined to take independent advice of counsel.  The High Court awarded him an annual income of £100,000 for life, which would also allow him to purchase a house in London where his children could visit him. The wife appealed successfully to the Court of Appeal, and won.  The judge held that the agreement should have been upheld and given full weight.  The husband was given an allotment for his role as the father but not for his own long term needs.  The husband then appealed to the Supreme Court. In the Supreme Court, Lord Phillips rendered the judgment that the husband’s appeal be dismissed.  [As an aside, as part of the British American Barristers Association we had the pleasure of meeting with Lord Phillips when he visited California last year.] The court agreed by a majority of 8 to 1, with formidable and very readable Lady Hale giving the sole dissenting judgment.  The Court considered the three following factors dispositive. (1) Were there any circumstances attending the making of the agreement which should detract from the weight which should be accorded to it? Meaning that the parties must enter into an ante-nuptial agreement voluntarily, without undue pressure and be informed of its implications. The court considered whether there was any material lack of disclosure, information or advice.  Although the husband chose not to obtain independent advice, he knew that the wife had substantial wealth and showed no interest in figuring out its extent.  The Court did not find that this had any effect on his willingness to enter into the agreement.  In this regard, similar to our California Uniform Premarital Act although not as well defined as our Statute. (2) Did the foreign elements of the case enhance the weight that should be accorded to the agreement? Meaning that in the fact that it was binding under German law 1998 when this agreement was signed  demonstrated that the parties intended the agreement to be effective. (3) Did the circumstances prevailing at the time the court made its order make it fair or just to depart from the agreement?  One limitation is that an ante-nuptial agreement cannot prejudice the reasonable requirements of any children of the family. However, respect must be given to individual autonomy and to the reasonable desire to make provisions for how to allocate existing property. Applying these principles to the facts, the Supreme Court held that there were no factors that rendered it unfair to hold the husband to the agreement.  The Court considered the fact that the husband was extremely capable and that the amount allocated to him to reflect his role as a father was also generous enough to meet his individual needs.  He fully understood that if the couple divorced, he was not entitled to anything and was expected to be self-sufficient. The Court further stated that the husband’s decision to leave his career was not motivated by the family’s demands but was a result of his own preference.  Since the husband had agreed that he should not be entitled to her family’s wealth at the time he married, it was not fair to give him a portion of the wife’s wealth, which she received independently of the marriage.  Therefore, the Supreme Court ruled that the ante-nuptial arrangement should be binding and enforceable.  In the future, it will be presumed that parties who enter into ante-nuptial agreements under English law intend that effect be given be given to them.

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