Court ruling on prenups may alter divorce law

For more than 150 years prenuptial agreements have not been enforceable under English law.

While the contracts were recognised in the US, major European countries - such as Germany and France - and other parts of the world, they were disregarded in England because of the belief 15 decades ago that women would end up being forced to sign unfair agreements by their husbands.

Now the Court of Appeal has suggested that this view is out of date, with a landmark ruling that has effectively given prenups legal standing.

This week, Katrin Radmacher, a German heiress whose fortune is thought to run into hundreds of millions of pounds, managed to overturn the decision made by the High Court judge presiding over her divorce from Nicolas Granatino that she should have to pay him £5.8 million despite the prenuptial agreement signed before their wedding that he would make no claim on her assets.

As he ruled in Ms Radmacher's favour, appeal judge Lord Justice Thorpe stated that it is becoming "increasingly unrealistic" that prenups can simply be disregarded, with this reflecting "the laws and morals of earlier generations" rather than the current age.

"It does not sufficiently recognise the rights of autonomous adults to govern their future financial relationship by agreement in an age when marriage is not generally regarded as a sacrament and divorce is a statistical commonplace," he remarked.

His and the rest of the appeal court panel's decision has created a legal precedent that in essence means that prenups can now be factored in when determining how much money a person has the right to claim when getting divorced from their spouse.

However, it is possible that the ruling could be overturned again, with Mr Granatino thought to be considering taking the case to the UK's highest court, the House of Lords.

The Court of Appeal said that his entitlement should be reduced from £5.8 million to a lump sum of around £1 million in lieu of maintenance, while there will also be a fund worth £2.5 million for a house that will have to be returned to Ms Radmacher in 16 years' time, when the youngest of their daughters reaches the age of 22.

In addition, debts of £700,000 held by Mr Granatino will be paid off by his ex-wife, under a condition of the settlement that she had always agreed to.

In a statement, Ms Radmacher claimed that she and Mr Granatino were both on an equal financial footing when they got married and suggested she believed the prenuptial agreement - which was drawn up at the behest of her father - was acceptable, as it is a normal contract in his home country of France and Germany, where the document was signed.

Had the couple had their wedding in either of those countries instead of England, it is probable that there would not have been an issue over the divorce settlement.

Written by Rachel Crook

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Published on: July 3, 2009

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