Impact of Granatino v Radmacher on UK postnuptial and prenuptial agreements

By MaritalMediation Staff on October 21, 2010

There’s lots of buzz in the UK legal scene about the Granatino v Radmacher decision and how it will shape law for both prenuptial and postnuptial agreements. Here’s the rundown from across the news and blogosphere:

UK Family Law Blog:

So how will courts now approach cases where there is a pre-nuptial agreement post Radmacher? The oldest rule, which is that pre nuptial agreements are contrary to public policy, has been abolished. As the majority of Supreme Court judges in Radmacher proposed “The Court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement”. In terms of defining ‘fairness’, the Supreme Court has suggested that if the parties’ needs are met and financial sacrifices have been compensated for in the agreement (for example by homemakers who have given up careers to look after the children of the family), then fairness may not require a departure from their agreement. The courts will still look at the strands of needs and compensation as set out in Miller, but it may be easier to argue in favour of a departure from the sharing principle, where there is a pre-nuptial agreement.

So, whilst many areas of family law are ripe for systematic review and reform, perhaps pre-nuptial and post-nuptial agreements can, following the Supreme Court decision, offer clients a way forward.

Guardian:

This week the supreme court is deciding the long-running case of a German heiress and her French ex-husband, and whether their prenup should be enforced. Katrin Radmacher is a wealthy woman; she has shares in a family company worth around £50 million, and further assets of around £55 million, all of which she inherited before marrying her now former husband, Nicholas Granatino. Granatino, who at one point was earning £325,000 a year at JP Morgan but now says he earns a tenth of that as an academic at Oxford University, almost seems poor by comparison. Before they married, he agreed not to claim any share of her wealth, or maintenance. Now, perhaps unsurprisingly, he has changed his mind.

Their prenup was German, written in German and signed in Germany. Were the issue being resolved by a German court, it would have “magnetic” force, as one judge put it. But the case is being decided in the UK supreme court and under the existing law, prenups can only be one factor among many.

Telegraph Blog:

When I was a barrister a decade ago, my divorce lawyer friends had two rules:

1. Don’t use us – we’re too expensive.
2. Don’t get divorced – it’s too miserable.

As a result, there was an extremely low divorce rate among divorce lawyers – they knew, however much they disliked each other, that divorce was more expensive and miserable than staying together.

Now, after yesterday’s ruling in the Katrin Radmacher case, there’s a third rule among divorce lawyers: always sign a pre-nup. Although they still aren’t absolutely binding, they now have semi-legal status – they will be binding unless there’s been a change of circumstances since the pre-nup was signed that would make it unfair.

BBC:

The UK Supreme Court has ruled that such contracts can have decisive or compelling weight after German paper company heiress Katrin Radmacher’s ex-husband failed in his bid to be awarded a greater chunk of her £100m fortune.

Now, the law in England and Wales falls into line with the United States and much of Europe in recognising agreements drawn up by couples prior to tying the knot.

Daily Mail:

Even though Katrin Radmacher and Nicolas Granatino signed a document in Germany saying neither would make a financial claim against the other in the event of divorce, British judges have ruled that the contract should be binding in this country, where they have both lived.

The details of this complicated case do not matter as much as the fact that the Supreme Court’s decision gives status to prenuptial agreements in the eyes of the law.

It’s difficult to avoid concluding this is another nail in the coffin of old-fashioned ideas of love, commitment and trust that were once the bedrocks of marriage.

Or to feel anxious that in my lifetime this valuable (yet under-valued) institution will be reduced to a horse-trading deal watched over by predatory lawyers from the first kiss to the last hiss.

Deutsche Welle:

The court battle had been seen as a test case on whether the UK would follow most of the rest of Europe in recognizing pre-nups as binding.

The judges did said that UK courts could overrule the agreements, if they were “unfair to any children of the marriage.”

The case is likely to increase the popularity of pre-nuptial agreements in the UK.

“For Nicolas and I, in our homelands – France and Germany – these agreements are entirely normal and routine,” Radmacher said in a statement after the verdict.

“I know some people think of pre-nuptial agreements as being unromantic, but for us it was meant to be a way of proving you are marrying only for love.”

UK Human Rights Blog:

The fact that the position in English law of nuptial contracts differs so significantly not only from Scotland but the rest of Europe and most other jurisdictions suggests that reform must be due and this judgment points the way. In the words of Lady Hale’s dissenting judgment, the law of marital agreements is ”in a mess” and ripe for systematic review and reform. The Law Commission has a current project to examine the status and enforceability of agreements and in 2012 detailed proposals for legislative reform will be available for Parliament to consider. That is the democratic way of achieving comprehensive and principled reform .

In any event, most jurisdictions accord contractual status to these agreements and hold the parties to them, subject in some cases to specified safeguards or exceptions. Under English law, on the other hand, it is the court that is the arbiter of the financial arrangements between the parties when it brings a marriage to an end. A prior agreement between husband and wife is only one of the matters to which the court will have regard. This latest ruling has not altered the position, and the uncertainty as to the weight that the court will attach to such agreements has led to calls for reform.

Learn more about postnuptial agreements.

Tags: postmarital agreement, postnup, postnuptial agreement

Categories: News, Postnuptial agreements