Court of Appeal ruling moves pre-nups in position of “greater magnetic force”

The Court of Appeal has reduced a £5.8m divorce pay-out by a German heiress to her former husband to a lump sum about a fifth of the original award, in a decision anticipating full enforceability of pre-nuptial agreements.

Karin Radmacher, from Germany, and Nicolas Granatino, a French national, entered signed a pre-nup in Germany in 1998 a few months before marrying in England. The contract provided that in case of divorce Granatino would not make claims to Radmacher's assets accumulated before the marriage.

Lord Justice Thorpe, giving the opening speech in Radmacher v Granatino [2009] EWCA Civ 649, said while it would be for Parliament to change the law, the courts should use their discretion to give effect to pre-nuptial agreements in certain circumstances.

'In future cases broadly in line with the present case on the facts, the judge should give due weight to the marital property regime into which the parties freely entered,' the senior judge said.

He added: 'This is not to apply foreign law, nor is it to give effect to a contract foreign to English tradition. It is, in my judgment, a legitimate exercise of the very wide discretion that is confered on the judges to achieve fairness between the parties to the ancillary relief proceedings.'

Recent cases such as Crossley v Crossley have recognised the relative binding nature of pre-nups in the English courts but the ruling in Granatino brings them closer to full recognition.

'It's the next step in the development of the law, allowing adults to enter into voluntary arrangements and giving effect to these arrangements,' said James Copson, a partner in the family team at Whiters. 'It started with S v S in 1998 and we are now moving towards a position where pre-nups have greater magnetic force.'

'Appeal judges are consistently saying that the extent to which the law needs to be changed is a matter for parliament; they have pushed the boundaries as much as they considered possible within their discretion.'

Thorpe LJ explained his decision on the basis that contracts entered into by autonomous adults should, subject to proper safeguards, be recognised.

'In so far as the rule on such contracts are void survives, it seems to me to be increasingly unrealistic,' he said. 'It reflect the laws and morals of earlier generations. It does not sufficiently recognises the rights of autonomous adults to govern their future financial relationships by agreement in an age when marriage is not generally regarded as a sacrament and divorce is a statistical commonplace.'

Lord Justice Wilson, with whom the other judges agreed, said the husband's initial £2.335m maintenance should be recalibrated to reflect the fact that his claim is only as home maker for the couple's two daughters rather than for himself. The £2.5m housing fund to provide a home for the husband and the two girls in England will be held in trust until the younger one, now 7, turns 22.