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With This Pre-Nuptial Agreement I Thee Wed

Matrimonial financial law is, to say the least, a somewhat imprecise arena. The application of the law to any particular case has been rightly decided as “an art, not a science”.

With London being described by some commentators as “the divorce capital of the world” – due to what some have seen as overgenerous awards to wives – it is hardly surprising that wealthy clients in particular have sought to regularise the apportionment of their wealth on divorce by means of a Pre-Nuptial Agreement. This is a written Agreement made by a man and a woman (the law is different in the case of same sex couples and cohabitees), prior to their marriage which is intended to sort out what the financial settlement should be in the event of a divorce.

Sounds simple…? Not for the English Courts!

Many European jurisdictions recognise such Agreements. In the USA, you would be expected to enter into such an agreement (at least one divorce in a lifetime is seen as a rite of passage by many on that side of the Atlantic).

For many years, the English Judiciary have resisted the recognition of “Pre-Nups”. They have held that such documents are contrary to public policy and cannot “fetter the wide discretion” which Parliament gave them to resolve these types of disputes.

It is this wide discretion which has caused matrimonial lawyers considerable difficulty in advising their clients about the likely outcome of a particular case.

Some succour may therefore be derived from the recent case of Radmacher v Granatino – although it was not a “run of the mill” case.

Ramacher v Granatino

The wife was German; the husband was French. They met in 1997. The wife, through her family, was extremely wealthy. The couple lived in London. Under some pressure (and at least an implied threat of disinheritance from her father), the wife arranged for a German lawyer to prepare a Pre-Nuptial Agreement. The husband had no involvement in the preparation of the document and did not take independent legal advice. The Agreement was signed on 1st August 1998.

The Agreement stated that in the event of a divorce, neither one of them would have any financial claims against the other.

The parties married in November 1998 and separated in 2006.

The Agreement was valid under French and German law. However, the parties lived in England and so it fell to the English Courts to determine the validity or otherwise of the Agreement.

An enlightened Court of Appeal rejected the husband’s claim for a share in the wife’s vast fortune and gave a degree of recognition to the terms of the Pre-Nuptial Agreement.

A word of warning though. The Radmacher -v- Granatino case was reliant, to no little extent, upon the nationality of the parties. It remains to be seen whether English law will be quite so “forward thinking” in a case involving English nationals. None the less, one can only hope that the seeds for greater certainty have, at least, been sown.

October 2009

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