Making Fairness Less Elusive: Pre-nuptial Agreements

In October 2010 the Supreme Court confirmed a decision by the appeal courts in the case of Radmancher v Granatino. In essence, the judges ruled that, contrary to the case law that had come before, pre-nuptial agreements can carry weight, and be binding, in English law. In this particular case, this led to the ex-husband Nicolas Granatino, enduring a reduction of his divorce settlement from over £5 million to £1 million.

Ms Radmancher, an heiress to a German paper company who is thought to be worth around £100 million, had drawn up a pre-nuptial agreement in 1998 with Mr Granatino, a former merchant banker. For much of their marriage they resided in London, and they divorced in 2007. In a statement following the hearing Ms Radmancher talked of how pre-nuptial agreements had become routine in both her homeland, and France, Mr Granatino’s country of birth.

Following the case the Law Commission embarked up a review of such agreements. A plethora of responses have been received from the legal profession, with many of them concentrating on how the Radmancher ruling, though helpful, still has not completely clarified the line courts will take if asked to rule on the validity of a pre-nuptial agreement. A previous case, Macleod v Macleod in 2008, had ruled that such agreements did not carry weight in English courts. Now Lord Phillips, president of the supreme court, was asserting that “it will be natural to infer that parties entering into agreements will intend that effect be given to them” while at the same time indicating that the courts would maintain their discretion waive an agreement if it was found to be unfair, particularly to the children of the marriage.

Thus it seems that the perceived fairness of any given pre-nuptial agreement will be the determining factor when it comes to deciding upon its validity at the point of divorce. Many lawyers who have acted in high profile cases have put forward responses to the Law Commission invitation. One of them, Sandra Davis of Mishcon de Reya (the firm that acted for Princess Diana in her divorce) states “In most cases it is extremely difficult for a lawyer to predict on any given day what any given judge may think is a fair redistribution of matrimonial assets and income.” Her colleague, Miles Geffin adds that “The popular perception is that [prenups] are terribly unromantic, but isn’t it better to agree in the best of times what you want to do in the worst of times?” Many lawyers argue that while judges lack detailed guidance it is hard for them to make consistent decisions, and doubly hard for legal representatives to predict, on their client’s behalf, the outcome of any given case. They strongly suggest that there is a need for clarity and accessibility before the law, without the loss of the case-by-case principle that so defines our legal system. Defining fairness is not easy; as another lawyer puts it to the commission, what is fair when you are 25, may not be fair 25 years later.
Putting guidance on the statute books may have many positive benefits. It has the potential to reduce litigation costs, increase personal autonomy and actually promote the marriage institution (particularly for finger-burned second time round-ers), as well as bringing the UK more in step with other developed nations. But, for the time being we must all of us in the legal profession wait and see. While it is true to say that about three quarters of the Law Commissions proposals make it to the statute books, and that we know that those on the commission’s board are generally in favour of legalising such agreements, as yet, the commission has not reported. Nevertheless, we at Prince Family Law take the view that properly constituted pre-nuptial agreements are increasingly likely to carry weight, and as such, we can support you and your fiancé in the drawing up of the necessary documentation .