Whilst we are all living in unprecedented times and there are no certainties about when we will come out of the government imposed Covid-19 lockdown and know the full economic impact of coronavirus, questions are already being asked about whether the family court can be asked to change a financial court order because of the effect of Covid-19. In this blog we look at if you can ask a court to change your financial court order because of coronavirus.
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Cheshire and Manchester based Evolve Family Law solicitors are working online to advise existing and new family law clients on all coronavirus related family law questions including financial issues arising from Covid 19. If you need advice on your financial court order or any other aspect of family law call Evolve Family Law on 0345 222 8 222 or complete our online enquiry form to set up a video conference or telephone appointment.
Can a financial court order be changed?
Many people think that once a financial court order has been made then ‘’that’s it’’ but some aspects of a financial court order can be changed by making a variation application. Examples of when you can apply to vary a financial court order include:
- Applying to stop spousal maintenance payments
- Applying to reduce or increase the amount of spousal maintenance payments
- Applying to extend the length of time that spousal maintenance payments are paid for
- Applying to discharge or vary a child support maintence requirement contained in a financial court order such as a child support court order for step-children, a top up child support order or a child support order for a disabled child
- Applying to end or vary a school fees order so that you are no longer required to pay school fees or the order is changed to vary the percentage amount of the school fees you are required to pay under the school fees order
- Asking the court to capitalise the spousal maintenance payments in the financial court order so instead of ongoing monthly spousal maintenance payment a lump sum is paid as a one off payment
- Applying to the court to change the mechanics for the sale of the family home if the financial court order included an order that the family home should be sold. Whilst the court won’t normally change how much you should receive from the sale proceeds, the court can give directions about the sale price of the family home or say whether an offer should be accepted or say whether the choice of estate agent should be changed or to order that a family law judge can sign the legal paperwork to sell the family home if one owner refuses to do so.
These are the types of clauses contained in a financial court order that can usually be changed either by agreement with your ex-husband or ex-wife or through making an application to vary specific clauses in the financial court order.
Covid-19 and changing financial court orders
Given the financial and economic impact of Covid-19 some people want to make more drastic changes to their financial court order and want to know if they can apply to change:
- An order to transfer the family home into the sole name of their ex-husband or ex-wife as their ex-spouse can no longer secure a mortgage to take over the mortgage liability so they want the family home sold instead
- An order that the amount of a lump sum payment is reduced to reflect the reduction in the value of the overall family assets because of the drop in the value of investments or in the value of a family business
- An order that on the sale of the family home the ex-husband or ex-wife will get a fixed amount from the equity in the family home and their ex-spouse will get the balance of the equity
- An order that one ex-spouse retains cash assets and the other retains more illiquid assets (such as a share portfolio or shares in a family business) that are now either difficult to sell or would have to be sold at a significant undervalue to the value given to the asset at the time that the financial court order was made.
There are many other examples of situations where one spouse now thinks that the financial court order, either made by agreement with their ex-spouse or after a contested court hearing, is now very unfair and prejudicial to them.
Court rules say that although you can apply to vary or change some parts of a financial court order (like the payment of spousal maintenance or the mechanics of the sale of the family home) you can’t apply to the court to change the capital elements of the financial court order (such as the amount of a lump sum payment or whether assets should be split differently to that ordered by the court) unless you:
- Appeal against the financial court order – you can only do this if you can say that the family judge either got the facts or the law wrong. There are time limits in which to appeal against a financial court order
- Apply to change the financial court order because of a Barder event (including the capital elements of the financial court order).
What is a Barder event?
A ‘’Barder event’’ is when an unforeseen event invalidates the fundamental assumption on which a financial court order was based. You may therefore think that the family court will treat Covid 19 as a Barder event as none of us, politicians included, realised the significance of the flu like virus in Wuhan when news of the illness was first confirmed by the Chinese authorities on the 31 December 2019.
However for something to be deemed a ‘’Barder event’’ the family court has previously decided that:
- The event must have occurred after the making of the financial court order
- The event must invalidate the basis, or the fundamental assumption, on which the financial court order was made
- The event must have occurred within a short time of the making of the financial court order
- The application to change the financial court order has to be made reasonably promptly
- Permission to pursue a Barder case won’t prejudice a third party who has bought or acquired an asset that is now the subject of the Barder court application.
The key to making a Barder application is to do it quickly. If you leave things to ‘’see how coronavirus pans out’’ then you may leave it too late to apply to court to change the capital elements of your financial court order. As timing of the Barder application is crucial it is best to take expert family law advice as quickly as possible.
Is Covid-19 a Barder event?
What amounts to a Barder event is determined by a judge using guidance issued in earlier court of appeal decisions.
In 2008, the court of appeal decided that the global financial crisis and stock market crash was not an unforeseen event because markets fall and rise. Other court cases have said that natural market fluctuations aren’t a Barder event. However, many would argue that a global pandemic, wiping billions off the value of the stock market, was neither natural nor foreseeable back in early December 2019. Whether the impact of Covid 19 on the value of a family business or on an investment portfolio is treated as a Barder event on is yet to be tested but much may depend on the particular personal and financial circumstances of your case and that is why it is best to get expert legal advice.
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Cheshire and Manchester based Evolve Family Law solicitors are here to answer all your family law questions whether it is a coronavirus related family law question, child contact, help with leaving an abusive relationship or financial issues arising from coronavirus. If you need advice on aspect of family law call us on 0345 222 8 222 or complete our online enquiry form to set up a video conference or telephone appointment.
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