Pre-nuptial agreements could become legally binding in England and Wales for the first time, after a landmark ruling in the divorce case of a German heiress with a £100m fortune.
Katrin Radmacher, 39, won a ruling from the Court of Appeal that the pre-marital agreement she signed in Germany with her former husband Nicolas Granatino, 37, should be taken into account by the courts.
In the contract, Mr Granatino pledged not to make any claims on her fortune if they split up. However, he was awarded £5.85m for his own use by a High Court judge last year, since such agreements are not legally binding in this country.
Following today’s ruling, his payout was reduced to a £1m lump sum and a fund of £2.5m for a house, which will be returned to Miss Radmacher when the youngest of their two daughters, who is currently six, reaches the age of 22. The heiress also agreed to pay £700,000 of her ex-husband’s £800,000 debts.
The couple married in London in 1998 but separated in 2003 after Mr Granatino resigned from his high-paying job in the financial sector to become a £30,000-a-year biotechnology researcher at Oxford University. They divorced in 2006. Miss Radmacher is the heir to a paper manufacturing empire owned by her father.
The ruling sets an important legal precedent which allows pre-nuptial contracts to be the decisive factor in determining how a couple’s financial assets are divided.
Miss Radmacher said in a statement: “I will never regard my marriage as a mistake. I have no regrets as our marriage has given me two wonderful daughters. 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.”
She said that her father had wanted to protect her inheritance as he “feared gold-diggers”, and that the pre-nuptial agreement was drawn up to ensure Mr Granatino was marrying her “for the right reasons”.
Miss Radmacher’s solicitor, Ayesha Vardag, said: “The Court of Appeal, in a carefully reasoned, thoroughly modern judgment, has enabled English matrimonial law to catch up with the rest of the world. From today, grown-ups can agree in the best of times what will happen in the worst of times.”
Mr Granatino, who met his former wife at the exclusive London nightclub Tramps while he was earning £330,000 a year working in finance for JP Morgan, is expected to take his case to the House of Lords to allow the issue of pre-nuptials to be reviewed.
The ruling could also spell the end of England’s reputation as a good place to get divorced. London has been nicknamed the “divorce capital of the world” in the past, as English law gives equal recognition to non-financial contributions to a marriage, leading to a number of cases in which wives have won huge payouts from their husbands.
Wayne Lynn, a specialist in family and divorce law at Dickinson Dees LLP, said: “Traditionally, people who didn’t want to be bound by their pre-nups might have found it to their advantage to be divorced in the UK because of the state of the law.
“The reputation of England and Wales has been that they are ideal places to get divorced if you’re somebody who wants to get a generous settlement from a wealthy spouse – but if pre-nups are the overriding factor in a case, both parties will walk away with exactly what their agreement says they should.”Reuse content