News article published on: 15th April 2020
On 11 April, The Financial Times reported on:
- challenges to settlements as finances become strained
- a surge in inquiries from individuals seeking to reduce maintenance payments due to Covid-19
Reporter Lucy Warwick-Ching explored how the coronavirus pandemic has affected stocks markets throwing them into chaos and resulting in rising unemployment. This is causing problems for some divorcees with maintenance payments to make.
Mark Freedman, a senior partner in our family law team, commenting on the impact of the pandemic said:
“If one party agreed a settlement on the basis of the value of their shares and then saw those investments plummet in value then they could theoretically appeal to the courts to review that agreement or decision.
The normal rules relating to divorce allow either party to appeal the final settlement within 21 days. The current unprecedented circumstances could allow cases to be reopened.
“I fully expect people whose finances have been affected and have recently concluded divorce agreements to appeal to the courts for an adjustment,”
“An appeal can be lodged under what is known as a ‘Barder event’ a reference to a legal precedent set in 1987.
Impact on divorce settlements – unforeseen and unforeseeable events
“A successful appeal would depend on whether a judge views the coronavirus outbreak as an “unforeseen and unforeseeable” event. This is questionable and open to interpretation but I would expect clients to certainly try, and if one person was successful then many cases could open the floodgates.”
The case of Myerson tested this principle, in 2009 – a husband appealed out of time after his share portfolio lost 90 per cent of its value in the year following a divorce. In the Myerson case, the husband lost his case after the courts held that the event — the global financial crisis — was not unforeseeable or unforeseen.