When a couple divorce in England and the court has to decide on how the finances are to be dealt with the judge exercises a wide discretion having regard to a number of particular factors. These include such things as the parties' respective financial resources and needs, their ages and the length of the marriage. The relevant statute makes no direct reference to pre-marital agreements.

Pre-marital agreements are generally held to be unenforceable in England although, in some cases, significant weight has been attached to them. In an important decision in July 2009 the Court of Appeal attached what it described as "decisive weight" to the terms of a pre-nuptial agreement, slashing the award previously made in favour of the applicant husband, Mr Granatino. Ms Radmacher and Mr Granatino, German and French nationals respectively, had been married for 8 years and had 2 children. Ms Radmacher was an extremely wealthy heiress said to be worth in excess of £100million. Mr Granatino had been a successful investment banker but his wealth was insignificant compared to his wife's.

Prior to the marriage Ms Radmacher and Mr Granatino had signed a German pre-marital agreement. When they got divorced, the judge who first dealt with the matter awarded Mr Granatino just over £5million of which half was intended for his housing and the balance by way of capitalised maintenance.

Ms Radmacher appealed to the Court of Appeal arguing that the first judge had not placed enough emphasis on the pre-marital agreement. The Court of Appeal agreed and reduced the award so that Mr Granatino only received the award in his capacity as a father rather than as a spouse. The consequence of this was that the housing fund was to be returned to Ms Radmacher when the youngest child reached 22. The sum designed to support him was also reduced, the intention being that he would have sufficient money to live on only until the youngest child was 22.

Mr Radmacher then launched his own appeal which was heard in March 2010 and the long awaited judgment from the Supreme Court is due on 20 October 2010.

In giving its judgment the Court of Appeal echoed an earlier Privy Counsel decision in determining that any change to the law to formally recognise pre-marital agreements required legislation. It was not for the court to bring about such a change. It is quite likely that the Supreme Court will adopt the same position but it is hoped that the court will take the opportunity to give further clarity on the relevance of pre-marital agreements pending any change to the legislation. By way of example should it be necessary for certain safeguards to be put in place before pre-marital agreements are taken into account, i.e. should there be a requirement for an exchange of financial information and the opportunity for each party to take independent legal advice before signing?