The Coronavirus pandemic – what if you have just achieved settlement of financial matters upon divorce and things have now changed significantly? What can you do?
In UK Law, there are understandably, very limited grounds upon which you can ’overturn’ a financial order. These include fraud, a significant failure to disclose assets or other highly relevant information, and mistake. However, another possibility which has emerged in caselaw is a situation where shortly after the order was made there was an event which was unforeseeable at the time the order was made, and which effectively undermines the whole basis of the order . This is often referred to as a ‘Barder event’ following the 1987 case of Barder v Barder.
The coronavirus pandemic may arguably be a ‘Barder’ event, but until a case is brought before the courts, we will not know whether the courts agree. In Barder the court set out certain conditions which need to be satisfied in order to justify an application:
- new events have occurred since the making of the order that invalidate the basis of the order/agreement;
- the new event has occurred within a relatively short time after the order;
- the application should be made promptly; and
- the application should not prejudice other relevant parties if the order was changed.
It should be made clear that cases that have been successful on Barder principles are in the minority – most do not succeed. The Court of Appeal heard the case Myerson v Myerson back in 2009 which was based on the impact of the 2008 financial crisis. In that case, the husband argued that the dramatic fall in the value of shares undermined the basis of order, but his appeal was dismissed with the court stating ‘… the natural process of price fluctuation whether in houses, shares or property, and however dramatic, do not satisfy the Barder test.’
However, the current global crisis is completely unprecedented (in contrast to an economic recession) with large swathes of the world placed on “lockdown” by national governments. This has had a devastating impact on almost all sectors of the economy, from small businesses and the self-employed to multi-national companies. Share prices have plummeted, many people have lost their jobs and we are in period of great uncertainty. These dramatic changes in circumstances could well invalidate the basis on which an order was made, depending on the facts of the case. The court is likely to look more favourably on an application where financial ‘needs’ can no longer be met due to the unforeseen event rather than one where there is a surplus of assets over needs.
If you have a recent financial order/settlement and your situation has changed as a result of the coronavirus outbreak, you should seek urgent advice by contacting our specialist family solicitors at E J Coombs.
