The law relating to pre-nuptial agreements may be strongly affected in the future by the case of Radmacher v Granatino decided by the Court of Appeal.

The facts of this case were that Mr Granatino, a French national, married Ms Radmacher, a German national, in 1998. The marriage lasted until 2006 and they had two children during the course of the marriage. Ms Radmacher belonged to a wealthy industrial German family. They came to live in England and in due course sought a divorce in England. By the time of the divorce it was calculated that Ms Radmacher was worth approximately £100 million.

Mr Granatino at the time of the marriage had been a banker and had earned in the region of $500,000 per annum. However, during the marriage he had given up this job and returned to university at Oxford to pursue a doctorate. Much of the wife's wealth had been given to her by her family during the course of the marriage.

Prior to the marriage the wife's family had been concerned to ensure that if they gave any capital to Ms Radmacher then her future husband would have no claim upon it. Ms Radmacher therefore had a pre-nuptial agreement drawn up by a German law (in German, a language Mr Granatino did not read) which excluded Mr Grantino's claims in the event of divorce. Mr Granatino did not have independent legal advice of his own and there was no meaningful negotiation. The wife simply said, 'Take it or leave it'. Further, two children were born during the marriage but the agreement did not vary in any way if there were children.

These were all factors which would traditionally have led the court to discount the pre-nuptial agreement and to decide the case on the basis of 'needs'. This is what the High Court judge did at first instance. It is fair to say that Mr Granatino did not say that his 'needs' amounted to half his wife's wealth. What he sought was a house for himself and capitalised maintenance. His total claim was in the region of £5 million. Ms Radmacher appealed to the Court of Appeal.

What was striking about the decision of the Court of Appeal was how forcefully each of the three judges expressed the view that adults ought to be free to make their own bargains. They therefore decided that although Ms Radmacher ought to buy her husband a house he would only have the right to occupy that house while the children were dependent. Thereafter the house was to revert to Ms Radmacher.

This decision suprised most in the profession and it also seems to be inconsistent with the Privy Council case of McLeod v McLeod. (The judges in Privy Council cases are the same judges who used to sit in the House of Lords and now sit in the Supreme Court). Nevertheless it has changed the perception of the law in this area and the profession is waiting to see how it develops.