Senior judges rewrote the divorce laws yesterday to give resounding backing to prenuptial contracts and bring England into line with the rest of Europe. One of Germany’s richest women secured victory in the Court of Appeal in enforcing a prenuptial agreement with her former husband.
The judges said that England should not be out of step with other countries, condemning existing law — under which prenuptial contracts are not enforceable — as “patronising” and outdated.
They upheld a challenge brought by Katrin Radmacher, 39, an heiress said to be worth £100 million, ruling that a prenuptial contract should be decisive when the courts divide a couple’s assets after a marriage fails.
Until now, judges have regarded prenuptial agreements as “persuasive” but in future, courts will regard them as binding unless there is a reason not to do so.
Ms Radmacher’s former husband, Nicolas Granatino, 37, a banker who has become a student, had agreed not to make any claims on her fortune if they split up but was awarded £5.85 million for his own use by a High Court judge last year.
Lord Justice Thorpe said that any rule that prenuptial contracts are void seemed “to be increasingly unrealistic” and “reflects the laws and morals of earlier generations”. He added: “As a society we should be seeking to reduce and not to maintain rules of law that divide us from the majority of the member states of Europe.”
Lawyers said the ruling signalled the end of London being seen as the “divorce capital of the world” where people could pursue extravagant claims. Simon Bruce, family partner at Farrers, said: “English courts will now respect the agreements made by couples both before and after marriage.
“It is judge-made law, the courts plugging the gap left by government inactivity.” The ruling would help individuals to become “masters of their own future”.
Michael Gouriet, family partner at Withers, said: “This is a really significant development and shot in the arm for prenuptial contracts, with very senior judicial support for reform.”
Sandra Davis, head of family law at Mishcons, said there would be “a seismic shift” in how the courts approached prenuptial contacts.
“The legal burden will start falling on the person who wants to extricate themselves from the prenup rather than, as now, on the person who wants to uphold it,” she said.
The judges cut Mr Granatino’s £5.85 million award to about £1 million as a lump sum in lieu of maintenance for the couple’s children, with a fund of £2.5 million for a house which will be returned to Ms Radmacher when the younger of their two daughters, who is 6, is 22.
His debts of about £700,000 are to be paid off by the heiress, who had always agreed to that.
Ms Radmacher’s lawyers argued that Mr Granatino, who is French, was heir to a family fortune of up to £20 million and that he had originally planned to become an investment fund manager specialising in biotechnology companies on completion of his PhD, although he now intended to remain an academic.
Mrs Justice Baron, in the High Court, had ruled that it would be “manifestly unfair” to hold Mr Granatino to the deal, given the respective financial strengths of the two sides.
The judge also had some concerns that the prenuptial agreement was defective in that Mr Granatino had not had independent legal advice and there had not been full disclosure of assets.
Ms Radmacher was running a boutique in Knightsbridge and Mr Granatino working for JP Morgan on as much as £300,000 a year when the two met.
He gave up his banking career in 2003 to pursue a doctorate in biotechnology at Oxford. The couple separated in 2006 and were divorced soon after. Ms Radmacher now lives in Germany with the couple’s children.
After the ruling Ms Radmacher said in a statement: “I am delighted that the court accepts that the agreement Nicolas and I entered into as intelligent adults before our marriage should be honoured. Ultimately, this case has been about what I regard as a broken promise. When we met and married, Nicolas and I were broadly on an equal footing financially.
“He too is an heir to a multimillion-pound fortune and, when we met, was an investment banker earning up to £330,000 a year.
“The agreement was at my father’s insistence as he wanted to protect my inheritance — this is perfectly normal in our countries of origin, France and Germany. My father taught me the value of hard work and family values.
“Like all wealthy parents, he feared gold-diggers.
“As an heir himself, Nicolas perfectly understood this. The agreement gave me reassurance that Nicolas was marrying me because he loved me as I loved him. . . that we were marrying for the right reasons.
“Nicolas and I made each other a promise and all I have been asking is that he be kept to it.”
Mr Granatino is expected to seek permission to take the case to the House of Lords for the issue of prenuptials to be reviewed by the highest court in the land.