Pre-nuptial agreements are now enforceable

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On 20th October 2010 the highest court in the land had the final say in one of the most eagerly awaited judgements of modern times, finally giving judicial weight to the contractual agreements between potential spouses.

Ironically the judgement is being delivered at exactly the same time as the government delivers its own judgement on the state of the nation’s finances, presumably whittling away much of the wealth that pre nuptial agreements are set to protect.

Katrina Radmacher, a German Heiress married Nicolas Grantino a successful financier in 1998. Three months before the wedding, Katrina asked Nicolas to sign a German pre nuptial agreement, which prevented either from making a claim against each other. Nicolas did not take independent legal advice and did not see a translated version of the agreement…neither did he have any formal information about Katrina’s wealth at the time.

When Nicolas went to court for the first time in 2008, the Judge (Florence Baron QC) gave some weight to the agreement and awarded Nicolas £5.5 million, about 10% of Katrina’s wealth. This was low for a 9 year marriage where Nicolas was fully involved with the children (and had given up a well paid job to become a student) but high compared to the Pre nuptial agreement. The problems with the agreement itself were manifest and outlined earlier in this article and that is why the judge did not bind Nicolas to the letter of the agreement.

In 2009 Katrina went to the Court of Appeal arguing that the original judge did not give enough weight to the Pre Nuptial Agreement. The Court of Appeal agreed and reduced the award to £1 million as a capitalised needs payment to allowed Nicolas to care for the children.

In many ways both the original High Court judgement and the later Court of Appeal judgement were right. This was an imperfect agreement, but an agreement none the less. So what has the Supreme Court done ?

The leading judgment states:-

“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.”

Pre Nuptial Agreements have historically held little sway over the Courts in the UK, although this position has been changing recently. This most recent judgment suggests that the UK has now fallen into line with most European countries in giving significant weight to such agreements.

The Supreme Court dismissed the difficulties with the original agreement and declared that it would be “Patronising” and “Paternalistic” for the Courts to impose a different settlement on adults who had made their own “Nuptial” agreements.

In a fascinating epitaph to the case, Lady Brenda Hale dissented from the majority of the other judges declaring that in her view both the original trial judge and the Court of Appeal had made the wrong decision and that “ marriage still counts for something in the law of this country and long may it continue to do so”. Lady Hale was the only woman in the panel of 9 judges and the only Family Lawyer and it is telling that the Supreme Court reached their majority view without her.

Osbornes Family Law department continue to offer a service to draft and advise upon pre nuptial agreements, which now must be viewed as a relevant and important aspect of how couples regulate their financial affairs.

 

 


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