British Law On PreNup Agreements Likely to Change

Prenuptial agreements are de rigueur in the United States, Canada, Europe, Australia, China and Japan for high net worth individuals and parties embarking on second or third marriages.

Surprisingly enough, in England and Wales (and Ireland and the Bahamas) the Courts will not enforce prenuptial agreements and couples who have an agreement from a foreign jurisdiction and later seek a divorce in England or Wales will find the worst place they could commence divorce proceedings, and expect to rely on a prenup, is Britain. Savvy litigants who wish to avoid the terms of a prenup, may take early steps to establish jurisdiction in the British Courts for that very reason.

However, a recent case may turn the tide with respect to these agreements. German heiress Katrina Radmacher and her husband Nicolas Granatino signed a prenuptial agreement in Germany, three months before their marriage in London, England in 1998. The agreement provided that Mr. Granatino would make no claims against his wife if their marriage ended.

In 2003 Mr. Granatino left his six figure career as an investment banker and took a job as a researcher at Oxford University where he earned a pittance compared to his former salary. It was at this point that the marriage broke down.

The matter of divorce and related issues came before the British trial court who, in accordance with the law, refused to uphold the prenup and ordered that Mr. Granatino receive $5.8 million pounds. The evidence showed that at the date the prenup was signed, unknown to her fiance, Ms. Radmacher had a net worth of $106 million pounds.

In support of his claim, the husband argued the prenup was in the German language and he did not obtain a translation or seek legal advice.

On appeal, the English Court of Appeal reiterated that the agreement was not valid or enforceable, however, they reduced the husband’s award to $1 million pounds and the right to occupy a home valued at $2.5 million pounds which he was required to relinquish upon his seven year old daughter attaining the age of 22 years. A further appeal was filed with the House of Lords.

According to the British media and family law experts in England, the nine justices of the House of Lords are struggling to agree on the appropriate outcome, however, it is widely reported that the House of Lords intend to change the law so that prenuptial agreements will be valid and enforceable in England and Wales.

Those who are slightly cynical suggest that if the facts were reversed and it was Ms. Radmacher who would receive nothing, the law would remain as is.

The reasons for judgment are expected to be released soon and I will report on the outcome in an update post.

Lawdiva aka Georgialee Lang

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4 thoughts on “British Law On PreNup Agreements Likely to Change

  1. It is very interesting to read this blog regarding the Radmacher decision. Recent decisions in the UK and Hong Kong have shown more weight put upon prenuptial agreements signed previous to international marriages, though it is too early to tell if this will be a global legal trend. Lady Hale’s dissenting opinion that emphasizes the economics of a prenuptial agreement, is extremely significant in countries where there tends to be a large wealth gap between spouses. Thailand is an example of such countries. Though there are exceptions, the international marriages in Thailand usually involve a more financially stable Western man marrying a less financially well-off Thai woman. Prenuptial agreements in Thailand don’t usually carry a lot of weight, but if the agreement is appealed in a country other than Thailand, either spouse could find that the agreement is worth more or less than they bargained for. I think that prenuptial agreements should be signed with extreme care. Couples should actually agree on the conditions in the prenup with the worst-case scenarios in mind. A prenup is a legal document and could be either upheld or allowed on an appeals court’s docket. Couples in international marriages should ask their attorneys about what might happen to their prenup if the agreement is considered in a different jurisdiction. Couples should be encouraged to do research regarding the attorney who drafts their prenuptial agreement and how much weight it will carry in various courts.

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