Racing driver case is a reminder that prenuptial agreements must still be fair

Marriage|Relationships|November 27th 2018

Despite being a motor racing enthusiast and a regular visitor to the track at the time he was active, I don’t recall ever seeing Kenny Brack race. I was, however, well aware of his achievements, including winning the Indianapolis 500 race, arguably the biggest event on the motor racing calendar, in 1999. He was also involved in an almost fatal accident in 2003, one of the sport’s worst ever accidents, in which he survived record g-forces. He currently works as a test driver for McLaren.

Last week, however, Kenny Brack made news in the rather more sedate surroundings of the Court of Appeal. Unfortunately, the Court of Appeal’s judgment in the case has not yet been published online so far as I am aware, and what follows is therefore a little thin on detail, and may not be entirely accurate, as I am having to rely only upon a few brief newspaper reports.

The appellant in the case was Mr Brack’s former wife, Anita. She was appealing against a decision of Mr Justice Francis, made in the High Court in 2016.

Mr and Mrs Brack are both Swedish, but they lived in England. They married in 2000, after signing three prenuptial agreements, at Mr Brack’s insistence according to his evidence, under which Mrs Brack was to receive just £500,000 if they should separate. They separated in 2015, and Mr Brack’s wealth is estimated at £11.4 million.

Mrs Brack sought a better settlement, and took the matter to court. However, whilst he found Mr Brack to be “mean-spirited” (but honest about the circumstances surrounding the signing of the agreements), and whilst he felt that the agreements were unfair on Mrs Brack, Mr Justice Francis nevertheless upheld them, suggesting that Mrs Brack might be better off pursuing the matter through the Swedish courts.

Mrs Brack appealed against that decision, and last week the Court of Appeal found in her favour. The reports I have read say that the Court of Appeal found the agreements to be “unfair” (sadly they don’t say how the Court of Appeal’s finding differed from that of Mr Justice Francis, but presumably it was a matter of degree), and ordered the case to be reheard.

The case serves as a reminder that in this country and at present (see below) the final arbiter of a divorce settlement is the court. The court is not bound by the terms of a prenuptial agreement, and is free to order a different settlement if it considers the terms of the agreement to be unfair. Accordingly, if you want to enter into a prenuptial agreement you must ensure that its terms are at least broadly fair, if you want the English court to uphold them. Having said that, working out what a court may consider to be fair many years into the future can be a difficult, if not impossible, task.

Of course, the present approach towards prenuptial agreements adopted by English law is not without controversy. Why, some say, should a person who freely signed an agreement be able to go to the court to get more when they divorce? After all, prenuptial agreements are binding upon the courts in other countries – why should they not be binding upon the courts here?

And the argument is topical too. Just last Friday Baroness Deech’s Divorce (Financial Provision) Bill went through the Committee stage in the House of Lords. As I have reported here previously, the Bill includes a provision that prenuptial agreements should be treated by the courts as binding, provided that certain conditions are met. Those conditions do not include that the court thinks the terms of the agreement are fair. The Bill would take away from the court the power to order any other financial order, save to the extent to which the agreement does not deal with the matter.

But for the moment the courts do have the power to disregard the terms of a prenuptial agreement if they believe them to be unfair. It is quite possible that Mrs Brack could receive 50% of the assets, some ten times more than the figure she agreed to back in 2000. Whether you agree with this or not, it is a reality you will have to bear in mind if you want to protect your assets when you marry.

Author: Kate Nestor

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