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Coronavirus - The impact on matrimonial financial settlements

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In these difficult times when we are all adjusting to our new routines during lockdown; trying to home educate our children; worrying about the safety of our jobs etc. one of the areas that is troubling many divorcing couples is what the impact of the coronavirus may have on matrimonial financial settlements. In some circumstances it is highly likely that recently divorced couples and couples going through the process at the moment, may now struggle to pay financial settlements that were agreed in the last couple of months due to loss of income or the value in their assets decreasing so they now can't meet the payments.

Once the parties agree financial matters by way of a consent order, or if in court proceedings once an order has been made, there is a legally binding order.

Is it possible to reopen a case as a result of the coronavirus?

When advising clients about the circumstances where an order may be overturned, we refer to these as a “Barder event”. This stems from a 1987 court case where the Court found that an original order could be overturned if an event takes place shortly after the original order was made which then undermines the basis of the order itself. The Court found that such an event must be unforeseen and unforeseeable. 

There have been many court cases involving this argument since this case and those that have been considered tend to involve death; remarriage or cohabitation; loss of employment; inheritance; decrease or increase in the value of assets. Only a few of these cases have successfully shown a Barder event and had the order overturned.

The reported cases clearly show a high threshold that needs to be met in order to be successful. Many cases have failed to be reopened as the court was not persuaded that the circumstances of their case were sufficient for the order to be overturned.  More often than not these cases would fail as the threshold is so high to meet in order to be successful. It was right that the court took this stance as it didn’t want to be overwhelmed with cases trying to alter the terms after the agreement or order had been made.

However, given the uncertainty around the impact of the coronavirus in the shorter and longer term, many are now wondering if the virus itself might constitute a Barder event.

Could the outbreak be unforeseen? Unforeseeable? We certainly haven’t ever experienced an outbreak like this in our lifetime but is this sufficient to overturn an order?

Barder arguments are, by their very nature, difficult to succeed in. However, one can have sympathy for those who agreed their cases in say November or December 2019 prior to the first reported cases in China. At that stage no-one could have foreseen the global pandemic. It maybe that those cases may succeed on a Barder argument given that no-one could have foreseen the worldwide impact of the pandemic.

However cases that were dealt with in January 2020 to March 2020 which have been agreed/approved will be more difficult to show a Barder event when we could have perhaps foreseen the consequences of the virus, given how quickly it has spread across the world and how it has affected different countries and their economies.

However, what is probably right is that the settlements that we agree now are almost certainly going to fail on a Barder event if we try to use the Coronavirus as a reason for overturning the order. It is therefore vital that any settlements that are entered into now are done so in the knowledge that they will likely be upheld and not overturned.

Ultimately, we are in unprecedented times and it is important that you seek legal advice before entering into any financial agreement as it may be difficult to claim a Barder event based on fallout from the coronavirus now as we all know the risks to our assets; livelihood and health as a result of it.

If you have any queries about any issues raised in this blog, please do not hesitate to contact our Family Team.

Disclaimer: Anything posted on this blog is for general information only and is not intended to provide legal advice on any general or specific matter. Please refer to our terms and conditions for further information. Please contact the author of the blog if you would like to discuss the issues raised.