|UK Makes Landmark Divorce Ruling|
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THE British Supreme Court ruled in favor of a German heiress on Oct.20 in a divorce dispute with a former investment banker, making pre-nuptial agreements binding for the first time under English law - provided they are fair.
The court supported Katrin Radmacher in the multi-million pound dispute, deciding that the agreement she signed with her ex-husband Nicolas Granatino to protect her fortune should be binding in England, even though it was signed in Germany.
"Today's decision means a hugely important change in English law," Radmacher's lawyer Simon Bruce told reporters outside the court. "Pre-nups are now binding, so long as they're fair. Katrin is delighted that Britain has upheld fairness."
British courts had previously considered pre-nuptial agreements not binding when deciding who gets what when a marriage fails, unlike in other parts of Europe.
The high-profile case sets a precedent in divorce law and could have implications for the popularity of pre-nuptial agreements in the United Kingdom, legal commentators said.
"The Radmacher ruling means anyone with any wealth or who expects to come into money and is getting married would be absolutely crazy not to have a pre-nuptial agreement because the full weight of the law will finally be behind it," said Liz Allen, a divorce lawyer with law firm Stephens Scown.
"In recent years we've seen the English courts gradually apply more and more weight to pre-nups. But this will open the floodgates for thousands of couples. They will become par for the course to protect wealth, instead of being seen as an American import," she added.
Granatino, a French former JP Morgan banker, had gone to the Supreme Court after appeal judges slashed his divorce settlement from more than 5 million pounds (US$7.9 million) to 1 million pounds.
Newspaper reports said Radmacher, a paper company heiress, is set to inherit more than 100 million pounds. Granatino told the Supreme Court he had not realized the extent of her wealth when he signed the agreement.
The court voted eight to one in support of Radmacher, with Lord Phillips, president of the court, saying pre-nuptial contracts can have "decisive or compelling weight".
However, courts would still have the discretion to waive pre-nups if they are not fair or do not provide for the needs of the children of a marriage, Phillips wrote.
Radmacher said in a statement afterward: "For Nicolas and me, in our homelands - France and Germany - these agreements are normal.
"We made a promise to each other that if anything went wrong between us, both of us would walk away without making financial claims on each other. The promise was broken.
"I know some people think pre-nuptials are unromantic, but for us it was meant to be a way of proving you are marrying for love," she said.
The opinions expressed do not constitute investment advice and specialist advice should be sought about your specific circumstances.
Published on our website on Oct.22, 2010