Thursday, 31 May 2018

Pre-Nuptial Agreement Valid Without Wife Taking Legal Advice

In Breaking Law (it is so embarrassing for me to keep mentioning that book and enticing you to buy a copy but needs must) you will find a draft six page pre-nuptial agreement which you can use, adapting as appropriate, before your marriage or civil partnership although I personally detest the things. I deal in the book with the current law in relation to such agreements. I there strongly urge you to ensure that independent legal advice is taken by each side to the agreement before it is signed up. But say one side does not get that advice. Is the agreement worthless? While the obtaining of the advice is highly desirable, an agreement may survive without it.

The Court of Appeal has just been dealing with the finances of a Swedish husband and wife in a case* where the wife asserted that the matrimonial assets amounted to around £275 million. They had married in Sweden but thereafter lived in England for 21 years. Just one day before the wedding, she and the husband had signed a pre-nuptial agreement which took out of the reckoning any wealth the husband subsequently acquired. She sought to escape from the agreement on the basis that she had not had legal advice before signing and, in particular, on the fact that the English courts would have  a discretion as to whether or not to take the contents of the agreement into account. The agreement had been brief, standard in Sweden and in Swedish. It complied with all the legal requirements which then existed in Sweden and the absence of legal advice for the wife would not have offended any Swedish court.

The judge who originally heard the case in England found that the wife knew full well the effect of the agreement and believed that it bound her. The Court of Appeal decided that she was stuck with it. It would have been binding in Sweden and it would be wrong to treat her as lacking a appreciation of the consequences of entering into the agreement merely because she had not received legal advice about the discretionary system here.

Versteegh v Versteegh [2018] EWCA Civ 1050