Financial Proceedings - Is Coronavirus (COVID-19) a 'Barder' Event?
A Barder event is an unforeseen event which invalidates the fundamental basis on which a financial remedy order has been made. If this situation occurs, an application can be made to the Court asking for the order to be revisited.
However, there is a notoriously high threshold for this application, with it being necessary to demonstrate that the event occurred shortly after the order was made, the application was made promptly and the event was entirely unforeseen. With all of this in mind, does the coronavirus pandemic fit these criteria?
The Financial Impact of Coronavirus
As a result of the pandemic many businesses have depreciated in value and there has been a large increase in redundancies. This poses two questions for those that have had a financial remedy order made based on their worth prior to the pandemic:
- Has this event changed their financial wealth so immensely that the order is now based on an entirely different scenario to the one at hand?
- Will the court accept this as a Barder event?
What Does Case Law Say?
This scenario has recently been put to the Court in the case of HW & WW, 2021 EWFC B20. In this case, the husband was the Managing Director of a wholesale distributor of printers and computer software which was worth £3.5 million in March 2020 (when the financial order was made). However, by the time that he was due to pay his first lump sum payment of £750,000 to his ex-wife in June 2020, the pandemic had greatly reduced the commercial prospects of his company and he defaulted on the payments.
This led the husband to make an application to the Court to set aside the order based on the fact that the pandemic had financially impacted him and a Barder event had occurred.
The Court agreed that the pandemic is an "extraordinary event, different in nature and scale, to any similar world event in the lifetime of the parties" and it was found in principle, that the COVID-19 pandemic "can open the door to a successful Barder claim".
Nevertheless, in this case the husband's application was rejected on the basis that the effect of the pandemic was reasonably foreseeable in March 2020.
What Does This Mean?
Whilst the pandemic did not constitute a Barder event in this case, the judgment indicates that it can potentially be argued to be a Barder event in an appropriate situation. However, the bar is set high and the circumstances it is likely to be accepted are few and far between.
