Prenuptial Agreements

Lord Keen of Elie Excerpts

Thursday 27th February 2025 Lords Chamber

[Lord Keen of Elie (Con)]

My Lords, I thank the noble Baroness, Lady Deech, for securing this debate. I begin with the advantage, shared with the Minister, of never having practised in the area of family law; accordingly, we can both bring a fresh eye to this long-running saga.

I find myself almost entirely in agreement with the observations made by the noble Baroness, Lady Deech, particularly on the need to bring forward suitable statutory provision for prenuptial contracts—and I use that word advisedly. I also agree with the noble Baroness, Lady Shackleton, who followed the noble Baroness, Lady Deech, on her point about the scope of a prenuptial agreement and its inability to forbid or exclude child maintenance.

I entirely agree with the point made by the noble Lord, Lord St John of Bletso, that, clearly, children and their maintenance should not be part of such prenuptial agreements. There should be separate provision for the maintenance of children, when it is required, and that is reflected in, for example, the law of Scotland—which I will come on to address in a different context—where there is express provision for a periodic allowance for children up to a certain age that cannot be excluded by any prenuptial agreement.

The right reverend Prelate the Bishop of Southwell pointed out that of course marriage is not just an economic transaction. But, as the noble Lord, Lord Farmer, made clear, those entering into matrimony need to take responsibility for the financial consequences of marriage. Accordingly, there is no reason why we should not look at the economic aspects of that relationship and the way in which it is going to be addressed.

While supporting prenuptial agreements on a statutory footing, the noble and learned Baroness, Lady Butler-Sloss, expressed the view that there should be some means of addressing changes in circumstances. I cannot find myself in agreement with that. It seems to me that we would be merely exchanging one set of discretions for another—a point the noble Lord, Lord Faulks, touched upon. At present, the court has very wide discretion. I am not sure that replacing that with a narrower discretion is the appropriate way forward.

The noble Lord, Lord Meston, has the advantage on me with regard to his scope of family law. But I cannot find myself agreeing with his inclination towards the status quo. It does seem to me that the time has come for action. Indeed, the time for action has passed. I agree with the noble Baroness, Lady Berridge, on the matter of awareness, but I will not seek to elaborate on the issue of chattels. I leave that to others to consider. I also agree with the noble Baroness, Lady Featherstone, that, if we are to put in place a statutory basis for prenuptial agreements, we need to have certain safeguards.

There is no compelling logic to a person leaving a marriage wealthier than when they entered it. I do not agree with the reference made by the noble Lord, Lord Meston, to some expectation upon divorce. I do not see why that should be taken into account. A prenuptial agreement is neither unique nor, in our present social position, to be regarded as unconscionable. It is an example of what is known to the law as a contract. A contract made between two competent and consenting persons should be enforced in the absence of fraud, coercion or misrepresentation. On the point made by the noble and learned Baroness, Lady Butler-Sloss, if there is material non-disclosure, that should be grounds for voiding any such agreement.

Adults entering a relationship should be free to decide for themselves the consequences and terms on which they may terminate that relationship. The same logic applies here as would apply to other forms of business or professional relationship, albeit acknowledging —as the right reverend Prelate pointed out—that marriage is not just an economic transaction. Parties should be entitled to agree that their existing wealth should never form part of what is termed “matrimonial property”. Parties anticipating their respective contributions to the common wealth during a marriage should be entitled to agree how their matrimonial property should be dealt with in the event of divorce.

At present, the law of England and Wales is a muddle of uncertainty, fed by discretion. Since 2010, we have been told that a prenuptial agreement may be enforced if regarded as fair—but, fair, we are told, at the time it is being implemented: that is, at the time of divorce, taking into account many changes in circumstances. That is part of the problem, because anyone who has entered into a prenuptial agreement, with which they are unhappy many years later, will simply say, “Well, it was fair at the time, but I don’t think it’s fair now”—thus, recourse to the courts, to litigation and to legal costs. That temptation to challenge will always be there and ultimately will only benefit the lawyers.

If I leased a car for five years, I could ask whether at the time of the lease the contract was fair. But to apply that test five years later, when the vehicle has lost its bloom, has become less reliable and is inclined to break down—rather like some marriages—seems inappropriate, in my submission. In the law of Scotland, a prenuptial agreement is treated as what it is: a contract. There is a statutory test of fairness and reasonableness, but it is applied to the contract at the time it was entered into, which is both logical and consistent with legal theory.

Section 16 of the Family Law (Scotland) Act states that the court may set aside or vary such an agreement if it was not fair and reasonable at the time it was entered into. A modest statutory amendment could bring England and Wales into line with the more developed and logical jurisprudence of Scotland. I therefore invite the Minister to indicate whether, and indeed when, the Government will address this issue, which has been outstanding now for more than 14 years.