Prenups Made Legally Binding in U.K. -- Is This Good or Bad for Women?

Paul McCartney must be green with envy. Like many wealthy British celebrities, bankers and heirs, McCartney didn't have a pre-nuptial agreement ("prenup") in place when he divorced Heather Mills in 2008 -- to the tune of 24.3 million pounds ($39 million). He couldn't. His native England didn't allow them.

But that all looks set to change. On Wednesday, a landmark Supreme Court ruling recognized the legal standing of prenuptial agreements for the very first time in England and Wales. While we won't know until 2012 whether such agreements will be enshrined in British law, this judgment now means that prenups will have decisive weight in divorce courts going forward.

The decision marks a radical shift in British law. A prenup is a contract that typically stipulates how property and other assets will be divided should a marriage end. Traditionally, prenups were seen as contrary to public policy in England and Wales on the basis that they might encourage couples to split up. From 2000 on, the norm was to divide all assets between the spouses on a 50-50 basis, although judges can use discretion in deciding how much to allocate to any one party.

But this ruling puts England and Wales squarely in the mainstream with the United States and most other European countries, which recognize pre-nuptial agreements. (Scotland has a separate legal system where prenups are already observed.) The ruling also ends England's unofficial status as the "divorce haven of Europe" because of generous divorce laws that allowed huge assets to be divided equally after only a few years of marriage.

The case in question concerned Katrin Radmacher, a 40-year-old paper industry heiress with a fortune estimated at 106 million pounds ($167 million), and French investment banker Nicolas Granatino. The couple married in 1998, had two children and separated eight years later. He was initially awarded almost 6 million pounds ($9.5 million) in a divorce settlement. But last year, the Court of Appeal reduced Granatino's payment to around 1 million pounds ($1.6 million), ruling that he had promised in a prenuptial agreement not to make a claim on his wife's fortune. Granatino's lawyers asked the Supreme Court to overturn that judgment. But Radmacher's lawyers said that the deal should be binding, and the Supreme Court agreed.

Granatino's lawyers argued that it was a clear-cut case of "reverse sexism." "We suggest that it is inconceivable that this result would have been ordained had the sexes been reversed," attorney Nicholas Mostyn said in written arguments. (We won't feel too sorry for Granatino. In addition to the 1 million pounds, he also gets a 2.5 million pound loan ($3.9 million) for a house that will be returned when the younger of the couples' two daughters turns 22 in 15 years' time. At a time when welfare benefits to the poor have just been slashed in the U.K., that doesn't seem like too much of a hardship.)

Although exact figures are not available, prenups appear to be on the rise in the U.K. One year ago, Resolution -- a group of 5,700 British lawyers -- reported that the number had doubled in a year. And research from the financial advice service Unbiased.co.uk also had solicitors predicting a sharp increase over the next five years. That figure should only grow after this week's ruling.

Prenups are also on the rise in the United States. According to a recent poll from the American Academy of Matrimonial Lawyers (AAML), 73 percent of divorce attorneys cite an increase in prenuptial agreements during the past five years. While only 3 percent of folks with a spouse or fiancée/fiancé had a prenuptial agreement as of early 2010, that's up significantly from the 1 percent reported in 2002, according to a poll conducted by Harris Interactive. And nearly one-third of single adults say they would ask a significant other to sign a prenup, according to the same survey.

In light of these figures -- and the growing popularity of prenuptial agreements more generally -- many are viewing the British ruling as a victory for pragmatism. As Judge Mathew Thorpe, the British Appeals Court jurist who reduced Granatino's initial financial settlement, commented when reflecting on the historically low status of prenups in British law, it "reflects the laws and morals of earlier generations . . . and is not relevant in an era when 40 percent of British marriages end in divorce."

Even Elizabeth Gilbert, that best-selling author of "Eat Pray Love" and hopeless romantic who ran off with the love of her life, signed a prenup with her second husband. In an interview with Time magazine she said: "Marriage is not simply a romantic union between two people; it's also a political and economic contract of the highest order. Nobody gets married expecting that it will ever end. But sometimes it does. It was really important to both of us that we wouldn't be leaving these decisions for unsentimental strangers to make for us in a courtroom."

Others see prenups as fundamentally bad for women, particularly those who stay at home to care for children. In effectively amounting to a "ransom note" (or so this logic goes), prenups may exploit inequalities -- financial, emotional, and intellectual -- between the spouses. As one English solicitor put it in an interview with The Guardian: "unfair concessions may be extracted by (generally) wealthier and more powerful men from financially vulnerable women who want to marry them badly enough to sign away the considerable protections of English matrimonial property law." (Interestingly, in the U.S. at least, the AAML says that 52 percent of members have seen an increase in women initiating the requests.)

To my mind, the rise and cultural acceptance of prenuptial agreements is just one more thing we ought to be talking about as we take divorce out of the category of "stigma" and move it squarely into the public sphere -- where we can analyze it, disagree over it, and learn more about it.

And who knows? Maybe we'll even see a blog post about prenups over in Nora Ephron's new divorce section at The Huffington Post.


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