The impact that this is having on businesses is particularly evident with some businesses asking employees to take unpaid leave or reduce their hours or terminating contracts all together. We are anticipating a number of client queries relating to this and how this may affect financial settlements and arrangements.
This issue is particularly relevant in the context of maintenance payments wherein the payer is reliant on their income to pay a maintenance payment ordered by the court. For illustrative purposes, I set out below a fictitious example:
Bob and Rose divorced in 2018. They agreed a financial settlement at mediation and this was incorporated into a Consent Order by VWV which was approved by the Court. Amongst other arrangements such as the lump sum of £50,000 and transfer of one of the jointly owned properties, Bob agreed to pay Rose £3,000 per month maintenance for a period of 5 years. Bob is an actor in a leading soap and in light of the social distancing recommendations filming of the soap has been dramatically reduced. As such, Bob's income will be reduced and he is worried that he will not have enough money to pay Rose each month.
Orders that can be varied are defined in section 31 of the Matrimonial Causes Act (MCA 1973). With limited exceptions, only income orders can be varied. Capital orders are final orders and cannot be varied, except as to detail.
If Bob wishes to reduce the payments he makes to Rose each month, he would need to apply to the court to vary the original order. When reviewing Bob's application, the court has a wide discretion and will, amongst others, apply the principles below:
At first instance, the court will consider the welfare of any children of the relationship that will ultimately be reliant on the maintenance payments. The court will also consider how reduced filming will financially effect Bob's salary as well as how long this is likely to go on for. Further, they consider what additional resources Bob has during this time and whether he can meet the maintenance payments in any other way. Of course, it may be that Rose's financial position has changed too so this is likely to be considered.
Each matter will be considered on a case by case basis and as mentioned above, the court has a wide discretion so the outcome of an application is not certain.