It has long been the problem that pre-nuptial agreements, entered into by a prospective husband and wife, are not legally binding. This has meant that anyone wishing to rely on such an agreement has had to put up a strong fight to persuade a court to uphold its terms.

The reasoning behind such agreements is that the couple agree in advance how their assets should be shared in the event of getting a divorce, in an attempt to avoid costly and lengthy proceedings and the media attention that often accompanies them, should the worst happen.

However, in the recent Supreme Court decision of Radmacher (formerly Granatino) v Granatino [2010], it was held that the ex-husband, Nicolas Granatino, of German heiress Katrin Radmacher, should be held to a pre-nuptial agreement signed by him stating that in the event of divorce, he would not claim anything against his wife’s fortune. The majority of the judges were of the opinion that properly drafted agreements should be treated as legally and contractually binding.

Their reasoning was based on the fact that the agreement was freely entered into by both parties who were fully aware of its implications and that there was nothing in the circumstances to render it unfair to uphold its terms.

There was only one dissenting argument, on the basis that such agreements are inconsistent with the importance that should be attached to the status of marriage and that the matter of reform should be dealt with by the legislature and await the outcome of the current Law Commission review on the subject.

The decision brings the UK more in line with many other European countries in which pre-nuptial agreements are legally binding. It means that more pre-nuptial agreements should be upheld by the courts in the future, with the onus moved to the party seeking to evade its terms.

The case does not mean that all pre-nuptial agreements will now be upheld and it will still be open to the Courts not to do so where their terms are deemed unfair in the circumstances. Relevant factors mentioned by the Court include hardship, the effect on any children of upholding such an agreement and the length of the marriage.

It is now more useful for people to enter into pre-nuptial agreements, provided that they are properly drafted by a legal practitioner. For advice and assistance on all pre-nuptial and divorce matters speak to Cheryl Low on 01708 757575