UK Fairness Test Mitigates Italian Pre-Nuptial Agreement

The law relating to the division of family assets on divorce varies widely across the world and the UK is generally regarded as one of the fairer jurisdictions for such financial arrangements in that the assets tend to be divided more equally than in many other countries.

Accordingly, where a family with an international lifestyle breaks up and there is a reasonably strong connection to the UK, it is often chosen as the jurisdiction of preference for divorce proceedings by a spouse who might be disadvantaged if the proceedings are conducted elsewhere.

In such instances, it is often important that the proceedings are initiated here. If they are begun under a different jurisdiction, that right may be lost.

It is also the case that different countries have different rules about what sort of pre-nuptial agreements may be enforced.

In such instances, complexities can proliferate. A 2017 case that was heard in the UK dealt with the financial arrangements after the marriage of a couple who had married in Italy in 2008 and had one child foundered. They had entered into an agreement in Italy (‘separazione dei beni’) under which they agreed that the assets that each of them brought into the marriage would belong to them separately and not be split on divorce.

At issue was a massive increase in the value of shares owned by the husband during the course of the marriage. The husband argued that this gain should be retained by him exclusively, the principal reason being the pre-marital agreement.

The wife challenged his assertion. Not only was it unfair, but she had not fully understood the implications of the agreement she had signed, not being Italian. There was also no specific agreement that their property division would be subject to Italian, not English, law.

In the end, the particular facts of the case determined the division of the family assets and the wife’s settlement included only approximately a quarter of the increase in value of the husband’s shares during the marriage.

However, had the divorce been conducted under Italian law, the wife would not have been entitled to any of that increase.