Hare Court silk Todd convinces Supreme Court that pre-nups are binding

The Supreme Court has ruled that “decisive weight” should be given to pre-nuptial agreements signed by spouses before getting married.

The ex-husband of German heiress Katrin Radmacher, Nicolas Granatino instructed Payne Hicks Beach partner Fiona Shackleton to challenge a Court of Appeal (CoA) ruling that found his £5.8m divorce award should be cut because he agreed in a pre-nuptial contract not to make a claim to his wife’s fortune should they divorce.

Shackleton instructed Nicholas Mostyn QC of 1 Hare Court to lead the case in the Supreme Court.

At the first instance and CoA Radmacher instructed Ayesha Vardag of Ayesha Vardag Solicitors to represent her. Vardag also represented Radmacher in the Supreme Court hearing, instructing Richard Todd QC of 1 Hare Court. Following the Supreme Court hearing Radmacher switched legal adviser, turning to Farrer & Co partner Simon Bruce rather than Vardag.

The Supreme Court dismissed the appeal by a majority of eight to one, with Supreme Court Justice Lady Hale dissenting.

In giving his ruling Supreme Court president Lord Phillips stated that under the particular circumstances “it is fair” that Granatino should be held to the pre-nuptial agreement.

The principle to be applied is that a court should give effect to an agreement that is freely entered into by each party with a full knowledge of the implications of that agreement, the Supreme Court said.

In her dissenting judgment Hale SCJ said any reform of family law should be carried out by the Government with the support of the Law Commission.

Hale SCJ, who rose to the Supreme Court via the Family Court, disagreed that pre-nuptials should be binding, stating: “In my view it’s inconsistent with the continued importance attached to the status of marriage in English law. This is independent of the weight to be attached to the agreement in this case.”

A statement from Radmacher’s lawyer Bruce said: “This decision means pre-nups are binding as long as they’re fair.

“Everybody hopes their marriage will last a lifetime. From today we’re allowed to prepare for the possibility that it might not be the case. Pre-nups are like a form of fire insurance – better taken out before the event rather than after it.

“This judgment is pro-marriage. Good pre-nups will keep couples together if they marry for love, not money. It holds for co-habiting couples, too.

“This judgment supports the public’s desire to minimise conflict, and the emotional and financial cost of divorce.”

Reactions:

Withers head of family Julian Lipson

“The procedural hurdles to be jumped through for a pre-nup to be valid have been lowered significantly by this decision, and to a level most family lawyers wouldn’t have anticipated. More pre-nups will be upheld as a result. The extremity of the decision does make one query whether the result would have been the same had it not been a wife who was the paying party, but the husband, as is more common. There’s a common feeling that it’s still much rarer for a man to achieve as big a settlement where it’s the wife in the case who’s the paying party.”

Irwin Mitchell family partner Elizabeth Hicks

“This ruling means that England and Wales has now finally caught up with the rest of Europe’s major nations in terms of family law. Pre-nuptial agreements were already legally binding on the Continent in a number of countries and it’s good to see that the Supreme Court has now made the decision to bring England and Wales in line.”

Schillings associate David Greer

“In a revolutionary judgment the Supreme Court has swept away the previous obstacles to the enforceability of pre-nups while retaining safeguards to prevent injustice. In years to come this is likely to lead to an explosion of litigation as spouses try to avoid pre-nups being enforced. The enhanced status of pre-nups will enable couples to protect their privacy by avoiding acrimonious litigation and the media attention which often comes with it.”

Brookman Solicitors solicitor Talitha Brookman

“This decision to uphold the pre-nuptial agreement has not fettered the court’s discretion as to whether a pre-nuptial agreement should be binding. Pre-nuptials will be binding in the ’right case’ where such agreements may carry decisive weight. However, this risks a situation under UK law where the economically weaker spouse is ‘forced into a proverbial corner’ if their future partner wishes to enforce a financial agreement that protects their personal wealth.”