The future of nuptial agreements in light of the Law Commission’s Scoping Report

As explored by my colleague, Victoria Potts, the Law Commission published a Scoping Report on “Financial Remedies on Divorce and Dissolution” on 18 December 2024. The report concluded that the current law doesn't provide a cohesive framework for parties negotiating financial settlements following relationship breakdown. 

Alongside setting out potential models the Government could adopt for any future (comprehensive) reform of financial remedy practice in general, the Law Commission also looked at some specific areas. One of those areas was to revisit whether binding “nuptial agreements” should be introduced.

Nuptial agreements: A background

A nuptial agreement (commonly called a ‘prenup’ or ‘postnup’, depending on whether it's entered into pre-marriage/civil partnership or during the marriage) is an agreement which seeks to set out the provision that would be made in the event of a future, hypothetical, separation/divorce/dissolution.

Nuptial agreements have been used for many years by families looking to safeguard generational wealth, and couples looking to buy in some certainty and avoid the potential of difficult, and costly, litigation if their relationship breaks down.

Nuptial agreements don't currently have any statutory footing in that Parliament has not legislated to provide for binding pre and post-nups that otherwise oust the discretion of the courts to make such financial orders as they see fit in all the circumstances of the particular couple’s case.

However, over the years, judges have increasingly placed reliance on nuptial agreements in exercising that wide discretion. Most famously, in 2010 the Supreme Court in Radmacher v Granatino [2010] UKSC 42 held that

“The court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implication unless in the circumstances prevailing it would not be fair to hold the parties to their agreement.”

Radmacher v Granatino was followed by the Law Commission providing a comprehensive report, in February 2014, recommending that binding ‘Qualifying Nuptial Agreements’ (or QNAs) should be introduced. 

Under the draft Bill attached to the 2014 report, a couple could enter into a QNA which would bind a future court and could only be interfered with to the extent, and only to the extent, required to meet the needs of one of the parties or any child. 

QNAs had to meet certain conditions under the draft Bill, including being made no less than 28 days before any wedding (in the case of a prenup), both parties having independent legal advice, and both parties having given disclosure.

How common are nuptial agreements?

As the Law Commission noted in their Scoping Report, it's very difficult to determine the extent to which couples are entering into pre and post-nuptial agreements in England & Wales, as there is no central record and no official statistics are kept.

However, family lawyers report significantly increased popularity over the last ten to fifteen years, as well as a sense of a shift in the public’s perception from such agreements being ‘unromantic’, to a more pragmatic approach. 

Although nuptial agreements are an option for any couples looking to build in some certainty, they are most typically used:

• Where there is significant wider family wealth (and/or businesses owned with other family members) and the parties are keen to ensure that wealth remains intact and can be passed down to future generations.
• Where one party enters into a relationship with sizeable wealth from their own endeavours and/or has a particularly lucrative career, such as those in sports, media & entertainment, entrepreneurs and high-flying city professionals.
• Where there has been a significant change of circumstances such as a sale of a business or receipt of a personal injury award and the parties wish to make provision for how that newly received wealth would be shared and/or preserved.
• Where a couple are marrying later in life and wish to ensure their estate remains theirs to pass down to their own children and grandchildren.

The Scoping Report

The Law Commission were asked, as part of their Scoping Report, to specifically look at whether the issue of nuptial agreements needed to be reviewed beyond the recommendations already made by them in 2014 (summarised above). 

Engagement with stakeholders

The Law Commission met with a number of stakeholders (primarily from the legal profession), who were largely in favour of reform of the law on nuptial agreements, welcoming the greater certainty that would bring. 

Most believed that any such reform should (as previously recommended) be conditional so that the court could always provide ‘top up’ provision to meet needs. However, a few express the view that a couple should be able to agree to whatever terms they wished – even if those were insufficient to meet needs.

Some thought a middle ground would be appropriate where needs could be more restrictively interpreted where there was a nuptial agreement in place. Others suggested that clearer definitions of needs could be provided.

Law Commission conclusion

The Law Commission were clear that before tackling the question of binding nuptial agreements, the Government would first need to decide whether it wished to undertake wider, wholescale, financial remedies reform.

The nature of reform to the latter clearly impacts the manner of reforming the former. The Law Commission noted:

1. If the Government wishes to retain section 25 (and/or only make minimal changes, i.e. adopting the ‘codification’ model) the 2014 QNAs draft bill could be introduced alongside those changes, with perhaps further work on the concept and definition of ‘needs’;
2. If the Government wishes to embark on wider reform, the 2014 recommendation for QNAs would need to be reconsidered and new laws for binding QNA brought in as part and parcel of that new law. In these circumstances, there was no support within the scoping report for (as mentioned by some stakeholders) introducing QNAs in the current draft bill form as a ‘holding provision’ as that simply risked complicating matters further,

What is clear is that there remains clear support for binding nuptial agreements, it's just a question of how any such reform fits in with the wider, potential changes to financial remedies law.

It's hoped that in due course the outcome of this important work by the Law Commission will be more certainty for those encountering family law issues and for those advising them.

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