News and Press
The impact of the Granatino case on pre-nuptial agreements

There have been a series of decisions in the Family Law Courts over recent months that have grabbed headlines. The latest to generate stories in the papers and specialist press is Granatino, which centred on how a pre-nuptial agreement entered into by a German heiress and her French husband should be regarded in the English courts.

Alison Hawes head of TLT's family team comments:
"At first glance, it would be tempting to interpret the decision as making pre-nuptial agreements enforceable in the English courts. In fact the Judgment says the opposite: pre-nuptial agreements remain unenforceable as contracts between husband and wife when they separate in this jurisdiction.

However, they are one of the factors that the court will take into account under its wide discretion, and in certain circumstances (as happened in Granatino) they will be upheld in the terms agreed. Each case will be decided on its facts: in Granatino the court was particularly keen to take into account that under the French or German jurisdiction the husband would have been bound by the pre-nuptial agreement and would have got nothing. In the High Court, the decision was that the husband should receive approximately £5m and this latest decision in the Court of Appeal reverses that.

The Court of Appeal was very careful to say that they are not changing the law: only Parliament can do that. Pre-nuptial agreements will be upheld on a case by case basis, dependent always on the particular facts of the case.

The Law Commission has been charged to carry out an in-depth enquiry into whether pre-nuptial agreements should be binding in England and Wales as they are across Europe. The Court of Appeal has expressed strong opinions in a powerful Judgment in Granatino about issues that the Law Commission should take into account and any Bill that they draft as a result is due to be ready in 2012.

Whether a Bill making pre-nuptial agreements enforceable does become law will very much depend on political will at that time. The Law Commission has a difficult job to do in balancing the expectation of couples that they should be able to sort out their finances without the court interfering and protecting vulnerable people and children when marriages break down. For now, the advice that we give to our clients remains as before: pre-nuptial agreements (or pre-marital agreements - the terms are interchangeable) are not binding in the English courts but they are, properly drafted by specialists, extremely persuasive and worth having."