The Supreme Court recently handed down a landmark decision in Radmacher v Granatino  UKSC 42. The eagerly awaited ruling grappled with one of the hottest current debates in family law namely the enforceability of prenuptial agreements in England and Wales. From the late 1990s, the issue of prenuptial agreements has been perplexing the lower courts in this jurisdiction and their indeterminate status generated numerous calls for reform. Thankfully this has now been answered with the Law Commission investigating the various forms of marital property agreements. Yet whilst we await the Law Commission’s Consultation Paper, the Supreme Court on Wednesday 20th October 2010 provided a significant ruling which arguably represented the most important family law case decided by the Supreme Court and the most significant judgment dealing with ancillary relief matters since Miller v Miller, McFarlane v McFarlane  UKHL 24. Family lawyers are now frantically blogging and speculating as to the overall impact of Radmacher (see Human Rights in Ireland) but this post centres on a specific aspect of Radmacher, namely the gender dimension of prenuptial agreements.
Katrin Radmacher, a German heiress with an estimated wealth of £100 million sought to enforce a prenuptial agreement against her French ex-husband Nicholas Granatino. The reason for this was because after their marriage had broken down, Granatino ‘broke their promise’ that neither party would lay a financial claim on each others assets. Katrin Radmacher gave the statement detailing why a prenuptial agreement was taken out:
‘I know some people think of pre-nuptial agreements as being unromantic, but for us it was meant to be a way of proving you are marrying only for love. It was a natural part of the marriage process. In my case, my father insisted upon it to protect my inheritance.’
The prenuptial agreement would have binding effect in both Germany and France. Yet the route for challenge for Granatino was that the agreement had procedural defects (a lack of full and frank disclosure of assets, Granatino received no independent legal advice and the agreement did not envisage the arrival of their two children). At first instance Baron J awarded £5.85 million to Granatino recognising the presence of the agreement but believing that the procedural defects made undiluted ancillary relief more appropriate. The Court of Appeal reduced his lump sum award to £1 million and gave a sum for housing that would later revert back to Radmacher reflecting Granatino’s role as father, but not as husband. The leitmotif of the Court of Appeal decision was autonomy and that a carefully fashioned prenuptial agreement between autonomous individuals may be in certain cases a ‘compelling factor.’ Most interestingly, the Court of Appeal shifted the focus away from traditional paternalism and stated that as Granatino had worked for JP Morgan he should have obtained legal advice. Full and frank disclosure of assets was not necessarily that important as he knew Radmacher was wealthy. Both parties were deemed autonomous individuals capable of crafting an agreement representing a type of ‘fire insurance’ in case the worst befalls their marriage.
As a decision giving a green light for prenuptial agreements the Court of Appeal did touch upon the gender dimension. Thorpe LJ stated:
‘I do not accept that the seekers are the predominantly male super-rich, anxious to ensure that the contemplated marriage will not prove too expensive on its future dissolution.’
Whilst academics have shown that this statement has certain elements of truth (see Emma Hitchings), the gender construct of a wealthy male enforcing a prenuptial agreement against an economically weaker female has typified the debate surrounding prenups. Indeed it has been suggested that whilst women have been drawing up prenuptial agreements, it is still men who are first into the solicitor’s office (see here). The facts of Radmacher v Granatino go against that vignette which is why Lady Hale’s dissent in the Supreme Court is truly noteworthy.
The Supreme Court, with a majority of 8-1, dismissed Granatino’s appeal and affirmed the Court of Appeal’s earlier decision. The prenuptial agreement was not so defective as to render it unfair. The majority created a formulation for determining whether a prenuptial agreement would be binding:
‘The court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to the agreement.’ (para )
Whereas prior to this decision the presence of a prenuptial agreement was merely a factor that was placed on a sliding scale of importance, the Supreme Court maximised the role that the agreement could play. Thus provided there were no contract law vitiating factors at the time the agreement was drawn up and that when the agreement is enforced, it is ostensibly fair, the court will give effect to it. Fairness was key and factors that would affect whether the enforcement would be deemed unfair centred on whether the reasonable requirements of any children were met and how long ago the prenuptial agreement was signed. The majority were keen to stress that if enforcing the prenuptial agreement forced one party onto state support or enabled an entrepreneurial business man to retain the fruits of his labour at the expense of his wife who looked after their children this was likely to render the prenuptial agreement unfair. In contrast, where both parties have wealth and are not economically in need, the principle of sharing (which metamorphosed from the ‘yardstick of equality’ created in White v White  1 AC 596) was likely to be displaced by the terms of the prenuptial agreement. Unsurprisingly this is the very essence and purpose of these types of agreement.
Lady Hale’s dissent was persuasive and argued that Granatino should be awarded his London property for life. Various reasons were given for disagreeing with the majority ranging from sweeping generalisations by the majority regarding nuptial agreements and fears over judicial activism, but a particularly compelling reason was provided:
‘… the court hearing a particular case can all too easily lose sight of the fact that…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 … Would any self-respecting young woman sign up to an agreement which assumed that she would be the only one who might otherwise have a claim, thus placing no limit on the claims that might be made against her, and then limited her claim to a pre-determined sum for each year of marriage regardless of the circumstances, as if her wifely services were being bought by the year? Yet that is what these precedents do. In short, there is a gender dimension to the issue which some may think ill-suited to decision by a court consisting of eight men and one woman.’
The fact specificity in Radmacher amply demonstrated that the Supreme Court was creating an important precedent in a case that had ‘very unusual features.’ This caution was justified and Lady Hale’s frequent reference to the Law Commission reform process shows that whereas the majority favoured practitioner certainty, Lady Hale was thinking ahead to the ‘usual’ cases that would apply the principles of Radmacher. This gender dimension was arguably overlooked by the majority and Lady Hale overtly linked this to the glaring lack of women sitting in the Supreme Court.
Now that the test case of Radmacher has been decided, the dust will settle and its principles interpreted in future cases. It is likely that more prenuptial agreements will be concluded, but the fear of a ‘boom’ is probably misguided. It is likely that over time the construct of marriage will be further recalibrated by the parties themselves, giving effect to party autonomy. But the fact that the defects in Radmacher were not fully analysed may mean that women may be disadvantaged when negotiating prenuptial agreements. Requirements for full and frank disclosure, obtaining independent legal advice should be bright-line principles for prenuptial agreements to protect an economically weaker party from the inequality of bargaining power often inherent in a prenuptial agreement. If they can be sidestepped and patrolled by an inherently subjective, judicial construct of fairness, they provide no protection. Statements of giving effect to party autonomy correlate to modern movements in family law, yet surely a closer focus on vulnerability may better reflect bargaining within an interpersonal relationship. Reliance alone on the court’s application of fairness, quite frankly, may not be enough of a safety net.