Paul Hunt, partner in the family department of Kirwans Solictors, on the decision time on pre-nuptial agreements in the UK:

For the first time, a case involving the enforceability of a pre-nuptual agreement has been to the highest court in the UK, the House of Lords.

The case, which originated in the Isle of Man, brought to wider attention the growing pressure to move towards a situation in which such agreements become binding.

A pre-nuptual agreement is one made by parties who are intending to enter into a marriage or a civil partnership. It is intended to regulate how their property and assets should be divided in the event of a relationship breakdown. This is particularly useful if one or both parties have some significant wealth which they are bringing into the marriage with them and which they are attempting to ‘ring fence’ against any future claims.

The court will take the existence of such an agreement into account in exercising its discretion, but is not bound to follow the terms of the agreement.

The court would need to be satisfied on a number of factors, such as whether each party has taken specialist legal advice and whether full financial disclosure has occurred.

The present position is that such agreements are not binding unless approved by the court. Historically, agreements of this kind were always regarded as being ‘against public policy’ because they potentially attempted to restrict the jurisdiction of the court in dealing with the division of property and assets upon divorce.

Pre-nuptual agreements are already binding in a number of other countries, and the UK is therefore behind in this respect. It seems unlikely that any statutory legislation will appear any time soon, as the Law Commission is not expected to submit a draft bill for consideration until 2012 at the earliest.

Therefore any developments in this field are going to come by way of decisions made in our appeal courts as a judicial rather than legislative procedure.