Challenging Divorce Settlements in Light of Coronavirus

We consider in what circumstances settlements in divorce can be reconsidered.

Is My Financial Settlement Final?

The most secure and final method of concluding a financial settlement is to have your agreement set out in an order which is approved and sealed by the court. This then becomes final and binding on the parties once decree absolute is obtained in the divorce proceedings.

If parties do not obtain a court order and the settlement is simply by agreement, then the parties will continue to have the right to financial claims against each other, even after the divorce is concluded.

Can My Financial Order Be Varied?

As a general rule, parties only get 'one bite of the cherry'. Therefore, financial orders are final. However, there are some exceptions to this rule in a limited set of circumstances.

Firstly, parties can apply to have an order set aside if they are able to prove that there has been fraud, mistake, non-disclosure or misrepresentation.

Where a party is ordered to make maintenance payments, the amount and length of time for the payments can be increased or decreased if the paying party's circumstances change. In the current economic climate, those who receive or pay maintenance may need to consider applying to the court to vary their order.

We have reported on this in further detail in our 'What is the Impact of Coronavirus on Maintenance Payments?' blog.

Parties can also appeal to the court after an order is made where they feel that the order was wrong. The appeal should be done immediately, or at the latest within 21 days of the order.

A party may appeal to the court outside of this timeframe where their circumstances have changed because of an unforeseeable and unforeseen event, known as a 'Barder event'. This is where -

• a new event has occurred since the making of the order that invalidates the basis on which the order was made,
• the new event occurred within a relatively short time of the order being made (ie no more than a few months),
• the person seeking to change the order applies to the court promptly,
• the change does not prejudice third parties.

In the case of Barder, a financial order to transfer the family home to the wife was set aside where she sadly took her own life and killed her children. The purpose of the order was to meet the needs of the wife and children, which was then invalidated.

Can the Coronavirus Pandemic Be a Barder Event?

The coronavirus pandemic has already had widespread damaging financial effects. Financial events such as the 2008 financial crash have been considered by the court in the past as potential Barder events, in particular where it has resulted in a drastic change in the value of assets. However, the court concluded that the 2008 financial crash was not a Barder event. This is because the drop in share prices were viewed as the result of a natural fluctuation in price and part of an ordinary economic cycle.

However, there is room for argument that the coronavirus could be a Barder event. The pandemic is arguably different to 2008, the measures the government have taken to lockdown the country are unprecedented and therefore the economic implications may not be seen as part of an ordinary economic cycle. It was also arguably unforeseeable and unforeseen due to the speed in which the pandemic and its implications have affected the population.

A key aspect of qualifying for a Barder event appeal is to make an application to the court promptly. Therefore, if you do consider that you have suffered losses in your recent divorce settlement due to the pandemic, please do get in contact with us for further advice.

If you require specialist legal advice relating to your settlements in these unprecedented times, we are able to offer telephone or video conferencing appointments at a time that is suitable for you.

Please contact Samantha Hickman in our Family Law team on 07464 544 828 , or complete the form below.