Lady Hale goes down fighting as Supreme Court backs prenups

In one of its most significant judgments, the Supreme Court has ruled that prenuptial agreements can be given 'decisive weight' by the courts.

However, the eight male Supreme Court justices, whose ruling in Radmacher v Granatino [2010] UKSC 42 was wrongly hailed by the media as ushering in a new era of 'binding' agreements, failed to secure the backing of the only female justice.

It is understood that failure to achieve unanimity delayed the handing down of the judgment, following the hearing in March.

In a powerful and sometimes angry judgment, Lady Hale said there was 'a gender dimension to the issue which some may think ill-suited to a decision by a court consisting of eight men and one woman'.

Lady Hale said that underlying the issue of prenups were 'profound questions about the nature of marriage in the modern law and the role of the courts in determining it'.

She went on: 'We have now arrived at a position where the differing roles which either may adopt within the relationship are entitled to equal esteem.

'The question for us is how far individual couples should be free to rewrite that essential feature of the marital relationship as they choose.'

Lady Hale described the law of marital agreements as a 'mess' but said 'the democratic way of achieving comprehensive and principled reform' would be to leave the issue to parliament, advised by the Law Commission.

'There is some enthusiasm for reform within the judiciary and the profession, and in the media, and one can well understand why,' she said. 'But that does not mean that it is right.'

She said that courts might 'too easily lose sight of the fact that, unlike a separation agreement, the object of an ante-nuptial agreement is to deny the economically weaker spouse the provision to which she '“ it is usually although by no means invariably she '“ would otherwise be entitled'.

Lady Hale said: 'Marriage is not only different from a commercial relationship in law, it is also different in fact'.

She went on: 'There may be people who enter marriage in the belief that it will not endure, but for most people the hope and the belief is that it will.

'There is also a public interest in the stability of marriage. Marriage and relationship breakdown can have many damaging effects for the parties, their children and other members of their families, and also for society as a whole.

'So there is also a public interest in encouraging the parties to make adjustments to their roles and lifestyles for the sake of their relationship and the welfare of their families.

'All of this means that it is difficult, if not impossible, to predict at the outset what the circumstances will be when a marriage ends. It is even more difficult to predict what the fair outcome of the couple's financial relationship will be.'

Lady Hale said a nuptial agreement should not 'stand in the way of producing a fair outcome'.

She concluded that the Court of Appeal had erred in law and the husband, Nicolas Granatino, should have been entitled to his English home for life. The eight male justices agreed with the Court of Appeal that the sum of £2.5m for housing should not be Granatino's absolutely, but should be held by him only for his years of parenting.

Lord Mance gave different reasons for agreeing with the majority but said the 'starting point or onus' was unlikely to matter once all the facts were before the court.

William Massey, partner at Farrer & Co, which has been acting for Katrin Radmacher since the Supreme Court hearing in March, said he did not think the Supreme Court ruling was unfair to women.

'Women have the opportunity before entering a marriage to negotiate the terms on which a divorce might happen at a later stage,' he said. 'It is always possible not to sign a prenup.'

Massey said prenups would be particularly relevant to older couples marrying later in life.

'If they have their own wealth, they may want to ensure their assets are separate so they can leave them to their own children. People do not need to be massively wealthy in these circumstances.'

Massey said prenups could be designed to last only a few years or until there were children.

'We have a number of clients who do not have a huge amount of wealth, but they do have wealth they are likely to inherit from their family.

'The impetus for the agreement may not come from them, but from their family. Often where wealth is created by previous generations, there is a culture in that family of protecting it for the future.'

Massey said the courts would now start from the premise that the prenup should be upheld unless it is shown to be unfair.

'It is still going to be difficult for solicitors to advise on what the appropriate terms for a prenup should be if one wants to be absolutely certain that there is never going to be a question of it being overturned.'

He added that he did not believe that the Supreme Court's ruling would undermine the institution of marriage.

'Some may argue that prenups are unromantic, but why should people not be able to reach their own agreements provided they do so on an 'eyes wide open' basis?'