Prenuptial Agreements

Baroness Butler-Sloss Excerpts

Thursday 27th February 2025 Lords Chamber

[Baroness Butler-Sloss (CB)]

My Lords, I too am a patron of the Marriage Foundation and a former family judge who tried a lot of financial cases. I have to say to the noble Baroness, Lady Shackleton, that I am one of two Court of Appeal judges who managed to persuade them that there should be leave to appeal in family cases. But my experience in the past was that Court of Appeal family judges fairly regularly disagreed with High Court judges. So it is not a question of marking your own work: you are marking the work of somebody else in the same subject—therefore, with a great deal of experience.

I am very much in support of the idea of prenups becoming part of legislation. I am delighted that the noble Baroness, Lady Deech, has brought this debate. It is useful that we discuss this, and I hope it will put some degree of pressure on the Government to start thinking seriously about doing something useful. I entirely agree with the suggestion that there is no reason why this relatively simple part could not become part of the law without waiting for a much more complex situation in relation to the rest of family financial affairs—which, as has already been said, can be very complicated.

However, I have two concerns. I respectfully disagree with the right reverend Prelate on the idea that there should not be legislation, but he has made a significant point. There are two issues about which I would be concerned if prenups became part of the law without a degree of discretion for the court. Perhaps, as a judge, I have more faith in the judiciary than either of the noble Baronesses, Lady Deech and Lady Shackleton: that does not entirely surprise me.

The two issues are these. The first is the point so well made by the right reverend Prelate: when the agreement is made, there has to be transparency. You have to put on the table what you have and what you do not have because, from cases I have tried, I know that debts can be as important as assets. Before you enter an agreement, you need to know the state of affairs of both the intending spouses. If one side does not come clean, and it becomes obvious on divorce that there has been non-disclosure and a serious lack of transparency—I am talking not about £10,000 but about millions—or, in a family that does not have much money, that one has money stowed away somewhere that has only just come to light, in such a situation, the judge must have a discretion to put the matter right.

I do not see that discretion being applied in a case where the judge is satisfied that the prenup was entered into with both sides understanding what they were going into and with sufficient transparency for it to be fair at the moment of the agreement. As has been said, it is a contract, but it has to be a contract that can be put right by the judge in extremely unfair circumstances if one of the two spouses has not played fair. So I am looking not at fairness generally but at fairness in a lack of transparency.

The second point that I am concerned about comes at the moment of divorce, or generally just after. There are circumstances which change dramatically: that was my experience when I tried cases. A couple starts marriage in a particular situation and, at the point of divorce, one of the spouses has an extreme change of circumstance. I am looking at illness. You may have a prenup that says that both of them have jobs with relatively equal incomes and neither of them has much in the way of assets, but then you get to a point, 30 or 40 years later, when one of them has multiple sclerosis and is unable to work. At that moment, are you to say that the prenup should apply to the wife, or indeed to the husband—because there is no shortage of wives who earn as much, more or even much more than their husbands? I happen to be one of those.

I can see a situation in which my husband and I made an agreement, when we both started at the Bar with relatively similar incomes, and then I made much more money and became a senior judge and he got a serious illness and could not work. Would it be fair that he should not get a penny because that is what we agreed at the moment of marriage? In my view, there has to be some possibility for this to be looked at. I also look at another situation: if a couple had had reasonable assets when they married but then one of them went bankrupt. There are extreme situations.

I am asking that the judge have a residual discretion to deal with those two instances: the moment of going into the agreement, and the moment when the agreement comes into force. I therefore do not entirely agree with the noble Baronesses, Lady Deech, or indeed the noble Baroness, Lady Shackleton, in wanting a prenup never to be changed. But I do see the idea that for the majority of people who enter into such a prenup, that should be the beginning and end of what their financial affairs should be.