A Court of Appeal decision over a divorced couple's pre-nuptial agreement could pave the way for such agreements to become legally binding in England and Wales.
In a case heard before the Court of Appeal in April 2009 involving Katrin Radmacher, a German heiress, the Court of Appeal has overturned an earlier court decision to award her ex-husband £5.8m of her £100m fortune despite their pre nuptial agreement.
Miss Radmacher's husband had agreed prior to marriage not to make a claim if they divorced. Miss Radmacher, was successful in her application to the Court of Appeal with the court ordering that the pre nuptial agreement should be taken into account by the court when deciding the division of their assets after their marriage failed.
In his judgement, Lord Justice Thorpe said that it had become increasingly unrealistic for courts to disregard pre-nuptial agreements and that a properly prepared pre nuptial agreement should be available as an alternative to going through the court in divorce proceedings.
Mauro Vinti, Partner and family law specialist at Sydney Mitchell Solicitors says "This Court of Appeal decision is the first time substantial weight has been given to pre nuptial agreements. Three Court of Appeal judges have ruled that a pre nuptial agreement can be a determining factor in deciding what is a fair and reasonable division of parties' assets upon divorce. However, it must be remembered that until the law is changed there is no guarantee that the court will adopt the same approach in every case."
Further developments in the law will still have to be awaited. A factor that weighed heavily in the minds of the Court of Appeal judges was that both Miss Radmacher and her husband were foreign nationals and that in each of their respective native countries properly executed pre-nuptial agreements are legally binding.
It is therefore uncertain whether the same interpretation will apply to pre-nuptial agreements executed by UK nationals in this country. However, the case does give fresh impetus to the ground swell of opinion in support of enforcing pre-nuptial agreements. A matter that is currently being considered by a Law Commission consultation report.
English case law has already developed such that properly executed separation agreements are being given increasing weight by the courts when considering financial cases appearing before them. It seems that the next step will be for either the courts or parliament to consider the validity of pre-nuptial agreements.
Mr Granatino is expected to seek permission to take the case to the House of Lords.
For more information on this or any other family related matter, please contact Mauro Vinti on 0121 746 3300 or email m.vinti@sydneymitchell.co.uk
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