London law firm Prolegal and legal expenses insurer ARAG are launching a divorce insurance cover for the UK market. The product’s policy will cover the costs of challenging a pre-nuptial agreement or adopting it into a consent order where the parties are prepared to abide by its terms, and also the costs of subsequent divorce litigation itself.

“The idea of buying divorce insurance may sound cynical, but the point is that when you are buying car insurance you do not wish for a crash,” said Jonathan West, Prolegal Head of Family.

West said: "We expect pre-nuptial agreements to become more common place and with the government implementing various legal aid and litigation costs reforms, we saw a real need in the market for a before-the-event insurance product.

The product is designed to be taken out at the point at which a pre-nuptial agreement is agreed between a couple. Prolegal saw the opportunity for such a product in the wake of the landmark Radmacher ruling and subsequent Law Commission consultation into the enforceability of pre-nuptial agreements, as well as government proposals for legal aid reform and Lord Justice Jackson's civil litigation costs reforms.

Simon Edwards, Principal of Prolegal, said:"While we eagerly await the outcome of the Law Commission's consultation into pre-nuptial agreements, we feel such agreements will become increasingly prevalent as people take a more practical approach to the possibilities of separation and divorce."

The new product comes on the heels of the Protect Pre-Nup product launched by law firm Mishcon de Reya, in partnership with the legal expenses insurer ARAG plc and Lansdown Insurance Brokers of Cheltenham, last month.

While the product is primarily aimed at providing reassurance for clients, it also addresses the demand made by the Lord Chancellor, Kenneth Clarke, to find additional ways for individuals to fund their legal expenses.

The law currently states that pre-nuptial agreements are only officially binding after court approval, and any challenge made by a spouse to a pre-nuptial agreement thereafter can be resolved by a judge. Legal fees will clearly be incurred with such a challenge, and pre-nuptial insurance is designed to protect against this.

The Law Commission is consulting on whether to make pre-nuptial agreements fully binding, which would effectively make it almost impossible to overturn a pre-nuptial agreement. This would likely render these products useless, as only extreme cases would be seen in court. Nonetheless, Mishcon de Reya and its partners still see an opportunity to cash in on the current uncertainty in the area, at least until the Law Commission makes its official recommendations.

The area of pre-nuptial agreements has developed rapidly in recent times, especially after the ground-breaking ruling that followed the well-documented Radmacher case in October last year. Experts say pre-nup agreements are increasingly likely to be recognised by courts in England and Wales although uncertainties remain.