Ashley Murray
Law Commission Scoping Report December 2025 – Chapter 7: Nuptial Agreements – Summarised.
Introduction:
The Law Commission (LC) has now published its 373 page scoping report on Financial Remedies on Divorce and Dissolution (Dec 2024). The report provides a valuable and thought-provoking analysis of the current law of financial remedies, highlighting the canvassed views of its consultees, practitioners and bodies who have submitted responses upon the perceived effectiveness or otherwise of the relevant legal concepts in practice for the current day litigant as set against the now historical nature of the underlying 1973 statute (the Matrimonial Causes Act). The LC did not seek at this stage a wider public consultation.
Proposed Reform Models:
In accordance with the terms of reference given to the LC, the report explains the current workings of financial remedies law upon divorce, seeks to highlight the problems that exist and sets out four models upon which the government could set about reform. These consist of:-
- Codifying in statutory form the existing interpretation of the law as developed by judges in reported cases – and thereby retaining the wide judicial discretion to be exercised on a case-by-case basis;
- A Codification Plus approach where the above codification of the law takes place and there is additional statutory reform to deal with specific areas where the law is not yet settled but with certain limitations on the extent of discretion where considered required;
- Guided Discretion whereby in a reforming statute a set of underpinning principles and objectives are introduced to guide the Court’s discretion and which may go beyond the current approach of s 25 of the Matrimonial Causes Act 1973;
- Default Regime as adopted by other jurisdictions whereby a matrimonial property regime is established which informs marrying artis of how their property will be divided upon divorce with the Courts having very limited discretion to make adjustments. The Government is to respond within 6 months
The Government is to respond within 6 months
Chapter 7 – Nuptial Agreements:
Chapter 7 of the Report sets out the existing approach at law to Nuptial Agreements (NA’s – excluding separation agreements) and, principally, Pre-Nuptial Agreements (PNAs) and the views of those who have submitted suggestions for reform, including a sample of academic works in this area of law, as well as the approach of certain comparative jurisdictions.
The report highlights that current disputes involving NAs often revolve around the quantification of the weaker financial spouse’s financial needs – and whether those needs should in the light of a NA be assessed differently on divorce than would otherwise have been the case. The Law Commission observed that in its earlier Matrimonial Property Needs and Agreements report in 2014 it had suggested the adoption of Qualifying Nuptial Agreements (QNAs) between parties, which subject to safeguards, including relating to the parties’ and any children of the family needs level being provided for, would constitute a binding contract determining the future divorce distribution of the parties’ assets identified in their signed NA agreement.
The report acknowledges that, since the decision in Brack v Brack (2018) by the Court of Appeal, the current approved approach of implementing the terms of a valid NA unless it would be unfair to do so as laid out in the Supreme Court’s decision in Radmacher (2010), is yet still part of and subject to the overall ‘statutory exercise’ under s 25 of the Matrimonial Causes Act 1973 when determining the overall fair division between parties upon divorce.
The report observes that there is yet, it appears, to be a reported decision where a ‘sharing’ as opposed to a ‘needs’ division has been adopted by a Court when a validly signed NA is in existence between parties. However, it would appear this has encouraged the use of the ‘elasticity of needs’ argument (as opposed to that of ‘a predicament of real need’) to persuade the courts to be particularly generous when interpreting the level of needs required in the subsequent judicial adjustment of the provision made in a valid NA on divorce (cf. Cumming v Fawn (2023) EWHC 830 and AH v NH (2024) EWFC 125).
The Law Commission acknowledge that in the current reform Bill (The Divorce (Financial Provision) Bill) before Parliament, which advocates in this area of the law relating to divorce asset division a future statutory guided court discretion, there is, as yet, no restriction placed on the ability of parties to a NA simply contracting out of any obligation to meet each other’s needs on divorce.
The report accepts the use of NA’s has now increased, although there remains no reliable statistical evidence of exact figures – their usage, albeit not exclusively, being more prevalent where one or both parties have substantial value assets, actual or potential. It is recorded in the report that practitioners had observed that there has been a recent trend for NAs to seek to restrict access to marital funds as well as pre-accrued assets or to make less provision generally for the financially weaker party often in line with what might be expected for a Schedule 1 CA 1989 parent caring for a child (ie with the use of Mesher or Martin type deferred sale provisions). However, in this context, the report refers to AH v BH, as above, where Peel J stated that there was yet not a single reported PNA case where a primary carer who has been without significant asset holding on a subsequent divorce not receiving a sum of money for housing outright.
The report records concerns of practitioners that, in practice, more NAs upon divorce are being challenged, particularly on the grounds of fairness, although it had been reported that the current view was that the existence of a NA ‘pushed down’ the needs level found appropriate by the Courts to a lower level than would otherwise have been found appropriate had there not been a NA in place.
Most bodies consulted were in favour of reform of the law in this area and of those most were in favour of the LCs earlier suggestion of QNAs.
Overall, most consultees sought greater certainty by statutory reform as to the approach that would be adopted to NAs by the law. It was observed that the LCs own previous draft Bill proposals (2014) had not suggested that this would entail allowing sharing above needs where a QNA was involved.
The report recorded that there remained not insubstantial criticism of the current law’s approach where parties could not fully rely upon the Court enforcing a validly signed NA and/or respecting the independently advised autonomy of the parties to agree their own terms for future divorce division.
It was also recorded that there were calls for ‘needs’ to be better defined by statute for the purposes of drafting appropriate NAs, as currently what was the appropriate standard of needs differed from agreement to agreement. The view was further expressed that such a definition may cater for a lower level of ‘needs’ if there was a QNA in place.
Other aspects were considered, such as the merits or otherwise of standard form NAs, the approach to NAs within specific religious groups and whether there could be a single lawyer to advise upon/draft an NA acting on joint instruction for both parties.
In a final evaluation of the LCs suggestions to Government, the report concluded that the definition of ‘needs’ as was last reported on by the LC in 2014 may in practice in 2024 be being interpreted as having a more restrictive meaning where NAs are involved as meaning a party’s ‘real needs’ (an interpretation which in 2014 the LC rejected) as opposed to the financial needs generally of the financially weaker spouse and, therefore, the LC’s view is that a statutory definition of ‘needs’ for such purposes may now be required. In these current circumstances, the LC, remains cautious about Parliament simply implementing the LC’s previous draft 2014 Bill (including QNAs) without the Government determining the route to be taken for the reform of financial remedies law in general as otherwise set out in the report.
The Next Step:
Accordingly, the report suggests the Government should first decide whether the present financial remedies law (under the MCA 1973) is to be reformed and, if so, the particular model of that reform (as presented in the report-as above) to be adopted. If such reform chosen decides to move away from the current s 25 MCA 1973 factors and the concept of needs and to incorporate binding NAs, then the report’s other recommendations concerning QNAs and its draft 2014 Bill will need to be reconsidered. If, however, the statutory reform route chosen substantially retains the present structure or results in its codification, then the 2014 QNA proposals could be implemented immediately and a decision taken if ‘needs’ as approached in the LC’s 2014 report requires further definition as above.
January 2025
Ashley Murray
Ashley Murray Chambers, Liverpool.
Ashley Murray is a co-author of ‘Cohabitation, Law Practice and Precedents’ LexisNexis (eighth edition) and, in particular, author of the 118 page Chapter on ‘Pre-Nuptial Agreements’. https://www.lexisnexis.co.uk/products/cohabitation-law-practice-and-precedents.html