Usually when a financial order is made in divorce proceedings, it is very difficult to change it.
Here, David Connor examines whether the coronavirus pandemic is a reason for parties to look to change an order and how this can be done.
When is an order unfair?
Often these orders cannot be reopened, but sometimes events happen shortly after an order is made which were totally unforeseen at the time. As a result, the order can be viewed as unfair to one party.
An example of this would be one party benefiting from a large, unexpected inheritance shortly after an order is made.
The same party may have previously argued they had a need for a certain part of the capital to meet their housing needs. While making the order, a judge may have decided that capital should be split between both parties.
The party in receipt of the inheritance may now be in a much stronger position with significant funds to meet their housing needs outright. The other party may have been left in a position where their needs were not met. As a result, the court could alter the provision to make it fairer, with the order ‘set aside.’
Setting aside an unfair order
During these turbulent times, parties may find themselves in a position where a recent financial order is viewed as ‘unfair’ to one party.
In order for such an order to be set aside, the following must apply in order for the courts to examine it:
- There is a new event (known as a Barder event) which invalidates the basis, or a fundamental assumption, upon which that final order was made
- The event happened shortly after the order was made (usually no more than 12 months)
- The application to court is made promptly
- The set aside order should cause no prejudice to third parties who have acquired interest in property in good faith.
In addition, the changed order must result in something which is substantially different from the final order – not just slightly different.
Is the pandemic reason to set aside an order?
The courts have previously said that fluctuations in value which occur as a result of unusual economic ups-and-downs will not normally allow a set aside. For instance, sometimes people will receive shares as part of their financial settlement – these naturally fluctuate, as would property value.
However, the existence of the pandemic only became apparent in late 2019, and its effect on the economy was not foreseen. Even now we are only really beginning to understand the potential economic effects and the impacts on families.
Covid-19 has seen a significant shift in the UK economy with effects on business and individuals – this may well create unfairness in certain circumstances. Many people have been made redundant or are working reduced hours for less pay with uncertainty over their future.
Whether this is reason enough to set aside an order has yet to be seen. The courts are strict in how they interpret the law – these so-called Barder events are extremely rare and following the 2008 financial crisis the court considered that even this event should not be viewed as unforeseen.
However, legal experts in this field are debating whether the coronavirus could be argued as such an event. Anyone who feels they may have been disadvantaged by economic changes as a result of the pandemic, and a financial order now appears significantly unfair, legal advice should be taken quickly to explore the available options.
For further advice on this or any other divorce law matter, call David Connor on 01706 225621 or email him at david.connor@whnsolicitors.co.uk
