Prenuptial agreements – usually known as “prenups” – are contract-like agreements entered into in anticipation of marriage (or civil partnership) and which purport to regulate what will happen in the event of future divorce, usually focusing on finances and property. The legal position and regulation of prenups have been major areas of debate for family law in many jurisdictions, England and Wales not least amongst them. The arguments around prenups in terms of law and policy are complex and important, and English judges and policy-makers are relatively new to considering them. Sharon Thompson's new book, Prenuptial Agreements and the Presumption of Free Choice, is therefore a welcome and timely addition to our understanding of the theoretical and practical issues surrounding prenups. This is a high-quality text which engages well with this important area of the law, offering new insights based on empirical and theoretical research.
Prenups raise, perhaps more than many areas of law, an obvious tension between different policy aims which the law might pursue. This debate was seen strikingly in the judicial context in Radmacher v Granatino [2011] 1 A.C. 534, but has since been the subject of a Law Commission report and numerous other policy interventions. On the one hand, there is the general point that the law in relation to financial remedies following divorce has, after many years, developed to a point where it is expressly aiming to achieve a “fair” outcome between separating spouses, and where discrimination between spouses based on their gender or their respective contributions to the well-being of the family is expressly prohibited: see White v White [2001] 1 A.C. 596 and Miller v Miller; McFarlane v McFarlane [2006] 2 A.C. 618. Given that a prenup inevitably intends to produce an outcome which is different from what the court would otherwise order (otherwise why have one?!), it can be said that a prenup runs contrary to this general aim and that, overall, prenups will have a discriminatory effect which is otherwise forbidden by the law. Generally, we do not allow people to opt out of anti-discrimination law, so why should we in relation to this important area?
On the other hand, there is the argument that people are autonomous individuals and should be entitled to make decisions which they consider acceptable without the law interfering in their lives: see the majority view in Radmacher. Prenups are said to enhance certainty, and can be particularly important to people who are seeking to protect either family wealth or, especially for second marriages, inheritance for children. No one ever has to enter into a prenup. If it is truly not consensual, it will be void or voidable on general contractual principles. So the law should respect the decision of those who do.
In Prenuptial Agreements and the Presumption of Free Choice, Thompson skilfully weaves together two distinct methodological approaches to the study of prenups. The first is her empirical work, based on interviews with 20 attorneys in the state of New York. Thompson explains that New York has a “rich experience” of pre- and postnuptial agreements, and that the general approach to post-divorce finances is similar to that in England and Wales (pp. 71–72). The second strand of the book draws on various theoretical models to develop what Thompson terms “feminist relational contract theory”, which combines elements of feminist theory and relational contract theory to “re-evaluate autonomy and power in intimate agreements (particularly prenups)” (p. 154).
The book opens with a neat discussion of what is termed the “new respect” for autonomy in the prenups context, this phrase having being used by Charles J. in V v V [2012] 1 F.L.R. 1315, para. [36], in one of the first judicial decisions after Radmacher. As Thompson notes later, there is no clear understanding of what we mean by “autonomy”, with a caricatured image of the “self-sufficient … rational maximising chooser of libertarian theory” tending to dominate much thinking in this area (p. 164, quoting Mackenzie and Stoljar), without that model ever being subject to much critical engagement by those who use it. However, it is this concept of “autonomy”, used so uncritically by many in this context (judges are particularly prone to this problem), which is deserving of further consideration. Is it appropriate, in particular, to place considerable weight on the idea of autonomy in the family law context, where feminist scholarship has long since established the interdependence of family members, especially in families with children?
Focused on Radmacher itself, Thompson's opening chapter addresses the rise of this “autonomy” focus within the thinking of the English courts and policy-makers, with Thompson taking critical aim at the version of “autonomy” favoured. In short, she says that the law's conception of autonomy elides the idea of valid consent with that of autonomy, by assuming that, if legally valid consent has been given, then autonomy has been exercised. Thompson argues that “a more realistic view of autonomy might take into account the respective situations of the parties” and consider, in particular, “the circumstances in which an agreement is signed” (p. 34). There is, she says, a “uniquely emotional context of prenups to be taken into account” (p. 35) and this differentiates them from other contractual arrangements, particularly when the asymmetry of bargaining power between the moneyed spouse and the non-moneyed spouse is taken into account. Indeed, one could go further with this discussion, since prenups are of course only one particular example of “autonomy” in recent family law thinking: the same critique which Thompson so effectively levels against prenups might be applied also to other areas, most obviously in terms of the courts' thinking in relation to post-divorce financial remedies more broadly or, perhaps, the Government's policy in relation to family legal aid and non-court dispute resolution.
Prenuptial Agreements and the Presumption of Free Choice does indeed consider post-divorce financial remedies, mapping the development of post-divorce financial remedy law more broadly, culminating in the rise of “fairness” under White and the three “strands” of fairness identified by the court in Miller; McFarlane, namely needs, compensation and sharing. In Radmacher, the majority of the Justices held that the existence of a prenup could alter what is viewed as a fair outcome, meaning (in Thompson's words) that “fairness as understood for a prenup is different from the concept of fairness in Miller; McFarlane” (p. 65), not least because Radmacher held that “sharing” was not part of the court's evaluation when there was a prenup. Again, there is a good opportunity to draw the link from this work to broader areas of family law here. Why is autonomy so important in the context of prenups, yet less so when it comes to the “fairness” approach of divorce generally? Why should the courts give respect to the apparently autonomous decision that the parties took years ago in preference to their position now? (At the very least, one party must be seeking an outcome which is different from that provided by their prenup, otherwise the court would not be engaged in the case.)
One of the major contributions made by Prenuptial Agreements and the Presumption of Free Choice is Thompson's empirical work in New York. Criticisms of the general law there will sound familiar enough to English ears, being focused on the uncertainty and unpredictability of financial awards after divorce. (Their policy on “equitable distribution”, not so dissimilar to the English policy of “fairness”, “is light-heartedly referred to by practitioners as the ‘Full-Employment Act for Accountants, Actuaries and Appraisers’” (p. 76).) While this process, described as “tortuous” and “costly” by one of Thompson's participants (p. 80), may partly explain the relative popularity of prenups, that does not mean that there are no concerns. As Thomson notes, “[e]very interviewee was absolutely clear that prenups are usually entered into because there is a gap between the income or wealth of the two parties” (p. 80) and, importantly, that the phrase “non-moneyed spouse” was used interchangeably with “wife” by participants because, as one attorney put it, “it almost always is” (p. 81).
Given this gender dimension, the limited influence of independent legal advice as reported by study participants is notable. As Thompson puts it, “evidence from discussions with almost all interviewees suggests that many clients sign unreasonable agreements in spite of what their lawyer has told them” (p. 87). This issue reflects the UK position, where one concern about the majority approach in Radmacher is its gender dimension, presented by the majority in a simplistic and uncritical manner and criticised by Lady Hale's dissenting judgment in a powerful section where she said that “there is a gender dimension to the issue which some may think ill-suited to a decision by a court consisting of eight men and one woman” (para. [137]).
Moving away from the empirical work, Thomson's other major area is a contribution to contract theory. A key difficulty with existing contractual theories is that they are aimed at “normal” contracts, and so do not adequately account for the differences between such contracts and prenups. Both relational contract theory and feminist theory have grappled with this issue, but for Thompson neither goes quite far enough when it comes to prenups, because neither quite sees the uniqueness of the prenup. Thompson quotes Ira Ellman's work in this regard, where he highlights that whereas a “normal” contract has an external purpose where the contractual relationship between the parties – even if very long-running – is for both of them a means to an understood end (usually, making money), conversely, as Ellman says, “in marriage it is the relationship itself that is the goal and purpose” (quoted on p. 143).
In consequence, Thompson goes on to develop her idea of feminist relational contract theory (FRCT). In Thompson's view, “[t]he marriage of feminism and relational contract theory is a happy one” (p. 155) given that they share a common cause for contract law: to be aware of the parties' changing understandings and not to be concerned only with wealth maximisation. To simplify somewhat, FRCT takes as its starting point that “the bargaining process of agreements is not as important as the intentions shared by the parties over the course of the relationship” (pp. 170–71); shared intentions are subject to change and can be inferred from the parties' behaviours. Thompson's analogy with the English courts' approach to common intention constructive trusts in the context of family homes (p. 171) is well made. Here, the parties' conduct and changing understandings over time are relevant to the quantification stage when the court determines what was intended by the parties or, in the absence of clear shared intention, imposes on them an outcome which is “fair” in the circumstances of the case due to their conduct (see Stack v Dowden [2007] 2 A.C. 432; Jones v Kernott [2012] 1 A.C. 776).
Sharon Thompson's Prenuptial Agreements and the Presumption of Free Choice is an excellent addition to our collective understanding of the complex issues of policy and practice surrounding prenups. The combination of empirical and theoretical research allows Thompson to take an approach here which is both theoretically well grounded while also being of practical relevance. Recent years have seen a significant rise in the relevance given to the idea of “autonomy” by the English law in this area, without that idea being subject to any significant critique by those using it. Not only does this unengaged acceptance of autonomy as a driving force in relation to prenups raise a number of serious concerns on its own terms; it also obscures other important policy considerations such as the (inherent) imbalance of power between the parties and the (almost inevitable) gender dimension of that imbalance. This book shines an important light on these issues and should be required reading for all those working in this area, whether as researchers, policy-makers or practitioners.
