Family - Divorce and financial settlement

Below are some common questions we have received from clients concerned about the impact of COVID-19. If you have a question that has not been answered below, please submit your question here, and we will respond to your query directly.

Question: I want to get divorced and sort out my financial affairs with my spouse. Can I do so?

Answer: Yes – the courts are still receiving petitions for divorce or dissolution of civil partnerships. It may not be the easiest time to finalise your finances but there is nothing to stop you reaching an agreement with your spouse now if you want to, and the courts are still able to approve financial settlements (which is important – see below). There is also nothing to stop you from making an application for the court to determine your finances if you cannot reach agreement with your spouse. However, be aware that the court is prioritising urgent interim applications (such as to meet urgent outgoings or to freeze assets).

Question: I reached a financial settlement in relation to my divorce just before the pandemic, it’s not affordable for me now, can I renege on it?

Answer: In some circumstances, the answer is likely to be yes. In others it will be no. It may depend on the nature of your resources, when you reached the settlement, whether you reached the settlement by consent or whether it was imposed or perhaps encouraged upon you. It may also depend on whether a Judge has approved the settlement or not, and whether the order made by the Judge has been sealed by the court. It may even depend on whether the order has been partially implemented or not or relied on by your spouse in some way, and the way in which your resources were divided by the order.

If you simply renege on a settlement or order without engaging proactively with your spouse you can expect that they might apply to enforce whatever has been agreed or ordered. You will likely have to decide whether to formally apply to be released from the settlement or order that you have finalised. In normal times the court will usually hold people to bargains that they have made, including where those bargains can be deduced from correspondence or interactions between lawyers acting for both parties, even if the bargain has not been signed. But these are not normal times and it is likely that fewer people will be kept to bargains.

Question: I can’t afford my spousal maintenance payments, what can I do?

This can be an incredibly stressful situation for clients. You can try to negotiate a reduction in the maintenance, whether temporary (a suspension) or permanent (a discharge, or a clean break). The most important factor is likely to be the extent to which your income has changed from what it was when the order was made, or the extent to which it might change in the future.

If you can't negotiate a variation or clean break then you can make an application to the court. You will then have to decide whether to stop paying maintenance in the meantime. Breaching an order is a serious matter but the court does have the power to release you from having to pay any arrears that have accrued to your former spouse in the meantime. That does not mean that it will do so. If you act unilaterally without a court order and reduce what you are paying to your former spouse you can expect an application by them to enforce the order. This could leave you liable not only to pay any arrears that accrue but also your ex-partner's costs. It is likely that in some cases, the courts, in due course, will recognise that some people have had no option but to act unilaterally to some extent due to the financial impact on them. This might be especially relevant if their former spouse is not being reasonable in accepting a reduction. The critical question will be the proportionality of their reduction.

Question: The court has just made a final order in relation to financial settlement in my divorce, is it still effective?

Answer: There has yet to be a test case on whether the current Covid-19 outbreak, and the impact on many people's livelihoods, is what we call a 'Barder event'. A Barder event is an event which has undermined the whole basis, or assumption, behind the order that was made, and enables usually the paying party to escape their obligations under the order.

In the case of Barder, the husband was ordered to transfer his share of the family home to his wife but tragically the wife died very soon after the order was made. She had made a Will leaving her assets to her mother. The husband managed to get out of having to comply with the order (opposed by the wife's mother). However, Barder events tend to be case specific rather than general. So for example in 2009 the Court of Appeal, in a case called Myerson, made clear that the "credit crunch" was not a Barder event. Nevertheless, it did not rule out something similar being such an event if the paying party had an order imposed on them (rather than consenting to it).

It may also be important that the court said that the credit crunch was simply an example of natural price fluctuations – it must be questioned whether the current Covid-19 crisis was foreseeable in the same way (or, if it was, when it was) and whether the lockdown and the impact it has had is in any way natural. We think that although some spouses may well, in the light of what has happened and what will happen, find a way to be released from their obligations, the courts will want to keep very tight control over the types of cases in which this is possible, and how. That may mean Covid-19 is not classed as a Barder event, or that it is only potentially a Barder event in specific types of situations.

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Question: My financial order says that I will sell my house, I don’t think it will sell for months now, what can I do?

Answer: The reality is that the person in occupation of the property will probably have to remain in situ until the property is sold. The other spouse, who may have anticipated renting until the sale, may have to move back in (if it is safe to do so). It all depends. Some orders do seek to anticipate a relatively lengthy sale process and seek to ensure clarity about interim arrangements, including interim finances, until sale. But it is also fair to say that some orders do not (for example they are agreed when a buyer has been found and has perhaps made an offer to purchase the family home). If your order does not make clear what should happen, or you find yourself in circumstances which could not have been anticipated (for example one spouse has to pay maintenance to the order pending sale to pay the mortgage but has lost their job or been furloughed), then you could consider trying to negotiate an interim variation with your spouse. If you are unable to do so successfully then the same points made above apply. You can make an application to the court, and you will be faced with the difficult decision pending a hearing about whether you can act unilaterally in some way (assuming you can) and to what extent.

Question: My former spouse has just started financial remedy proceedings, is the court running and what does this current situation mean for the litigation?

Answer: Yes the courts are running and you will need to comply with any orders for disclosure of financial information and documentation (and any other orders) until the court determines otherwise. It is highly likely that any hearing listed in your case will be conducted either by telephone (if directions cannot be agreed) or by Skype/Zoom/Teams, etc. The emphasis from the courts is very much on the need for litigants to agree directions where possible and to use other forms of dispute resolution if they are able (such as mediation or arbitration) to resolve any issues. This includes issues which would normally be handled by the courts (so for example the timing and ambit of expert evidence).

We think it is unlikely, however, that many courts will expect litigants to settle their financial affairs on a final basis during this time (unless the outcome should be obvious or is not impacted by the fluctuating value of assets). So most financial court work will be focussed on disclosure, protecting assets, financing of legal fees, interim finances, and the extent to which expert evidence is useful at the moment (and the ambit of that evidence). However, that does not stop parties from reaching settlements if they can or if they want to. Many financial specialists are adept at conducting 'Private FDRs', that is, a court led mediation. It is where someone who gives both parties a (remote) steer as to what outcome they would decide on if they were the Judge at a final hearing. Such an option can save parties a lot of time and money.

Question: I was attending mediation with my former spouse and we had just agreed the values of all our assets, what happens now?

Answer: You will have to decide which of the assets will need to be revalued, and whether it is worth doing so at the moment (and if it is not, then when the exercise should be undertaken). If you do not have separate legal representation your mediator can help with this.

Question: I am due to make an instalment payment of a lump sum under my financial remedy order but I can’t afford it, what can I do?

Answer: It is possible, albeit traditionally difficult, to vary the quantum of a lump sum by instalments (as distinct from a single lump sum, or separate single lump sums, which can only be varied as to timing). However, in the current climate it remains to be seen whether this rule will be relaxed. Traditionally, it has always been more straightforward to persuade a court that the timing of a lump sum should be adjusted, even significantly, rather than the quantum. As ever, it all depends and if you are able to, seek legal advice.

Question: I think it is too risky to divorce and the moment but I want to progress the financial settlement with my spouse, are there any other options?

Answer: Yes, you can agree a separation agreement and implement it now without it being approved by a Judge. However if not approved by a Judge it will not become an order. Therefore you run the risk of your spouse trying to go behind it in the years to come on the basis of a change of circumstances (although equally you may benefit from having that option available to you).

Question: Can I begin mediation at the moment?

Answer: Yes, many mediators (including ours) have facilities to enable remote mediation sessions with clients during the Covid-19 lockdown. This may involve both you and your spouse being on a video call with the mediator, to begin the route towards reaching a financial settlement. The process of financial disclosure and raising questions of disclosure can all be done remotely and so you should feel confident that mediation remains available.

Family - Domestic violence

These are some (unfortunately) commonly asked questions from our clients concerning domestic violence.