Ruling shows why pre-nuptial agreements are worth every penny

Release date: 3/7/2009

A new Court of Appeal ruling over an heiresses' pre-nuptial agreement has highlighted their value and could help pave the way for them to become legally binding in England and Wales.

The Court of Appeal took Germen heiress Katrin Radmacher's pre-nuptial agreement into account when it overturned an earlier decision to hand £5.8 million of her £100 million fortune, to her estranged husband. The couple's pre-nuptial agreement stated that Miss Radmacher's husband would not make a claim if they divorced. Despite it being signed in Germany in 1998, the Court of Appeal upheld the agreement in Miss Radmacher's favour.

Pre-nuptial agreements are frequently linked to the rich and famous. But research shows that many divorcees now believe a pre-nuptial agreement could have paved the way for a fairer, more amicable, less costly and faster settlement.

Sonia Bachu, a family lawyer at Harvey Ingram, has been following the case closely. She says: "Although pre-nuptial agreements are not currently legally enforceable in England and Wales, Miss Radmacher's ruling clearly highlights the far greater weight and consideration being given to them by the courts. This case also shows why they are worth the effort, as courts will always consider them as a relevant factor when reaching a settlement - provided certain guidelines have been followed."

For pre-nuptial agreements to be considered by the courts, both parties must prove they had legal advice, made full financial disclosure and were under no duress when entering into it. Pre-nuptial agreements should also be signed at least 21 days before the marriage takes place, to avoid any suggestion a partner was pressured into it on the eve of their wedding.

Sonia adds: "This may sound like a lot of effort but there is a groundswell of support in England and Wales for pre-nuptial agreements to become legally enforceable - except where there is a risk of significant injustice."

Despite the agreements' growing popularity, they are underpinned by very little case law as it is felt only a small percentage of couples are going into them, amid fears that they may not be upheld. In the few cases that have reached the courts, judges are willing to enforce at least some of the terms – as long as they are deemed fair. But Miss Radmacher's case may now help pave the way for them to become enforceable within the next five years, as more and more judges take them into account and give weight to them.

For more information on our pre-nuptial agreements or our other family law services, contact Sonia Bachu.