Will Coronavirus Affect My Divorce Settlement?

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As the coronavirus outbreak continues to affect people across the world, it’s a particularly uncertain time if you’re going through a divorce. With social distancing, services transitioning to remote working, and restrictions on moving home, is it currently possible for your divorce to continue?


In addition to issues concerning social distancing, the coronavirus has also had a significant impact on both individual businesses and global stock markets. Suddenly, your business may no longer be viable, you may have been furloughed, or your assets are worth significantly less than before. How does this impact on your divorce settlement?

Will my divorce be able to continue?

Whether your divorce is delayed will be determined partly by the process you and your ex-spouse are going through.

Many divorce cases conclude without a court hearing. Couples often agree financial settlement or arrangements for children between themselves or with the help of a solicitor or mediator. Cases typically only end up in court if couples cannot come to an agreement regarding financial or child-related matters.

Many legal professionals are continuing to work and are offering meetings by telephone or video call, and so it typically will still be possible to negotiate through your legal representatives.

Clearly there may be some delays in the process simply because of the transition to remote working. In addition, service levels may be disrupted due to illness or because of people self-isolating due to the virus.

Additionally, while it may still be possible to progress your divorce through your solicitors, obtaining valuation evidence as part of your financial settlement may be more difficult. You could experience a delay in obtaining valuations simply because the relevant experts are unavailable, or because court hearings have been adjourned.

The Ministry of Justice has said that, because most divorce cases do not require a hearing, it is not currently seeing any delays in the amount of time taken to deal with divorce applications submitted online.

If your case does require a court hearing then there may be some delays. Even though court premises are closed, some family court hearings are continuing remotely through telephone or video services such as Skype.

Bear in mind that the cases being heard tend to be urgent, perhaps because they involve domestic abuse or child protection considerations.

Can I put my divorce on hold?

While your divorce may be a stressful and emotional issue for you, in the light of the difficulties created by the coronavirus pandemic you may wish to put the process on hold. You may be facing employment uncertainty, looking after your children while the schools are closed, or caring for family who are isolated.

In addition, selling your family home may have been part of the settlement and restrictions on property sales mean you can no longer conclude the sale.

In these cases, you may want to speak to your legal representatives about pausing your divorce.

You may also wish to put your divorce process on hold because of the current economic uncertainty. Perhaps your assets have fallen in value because of global market volatility? Maybe your pension fund has reduced in value? Or, if you are a business owner, perhaps you have been forced to close your business and furlough staff?

If your finances have been affected as a result of the pandemic, you may also wish to pause the divorce process.

It is however worth noting that proceeding with your divorce after the pandemic passes is likely to be at a time when many others are doing the same. There could be more lengthy delays for divorces while this probable surge and resulting backlog is dealt with.

Can I renegotiate my financial settlement in light of coronavirus?

While the coronavirus pandemic has impacted many areas, it has resulted in significant stock market volatility around the world.

In mid-March 2020, both the FTSE 100 and Dow Jones saw their biggest one-day falls since the late 1980s. At its worst, the FTSE 100 index of leading UK companies had fallen in value by more than 30% since the start of the year.

When businesses closed their doors and ceased trading, unemployment rates have subsequently risen. Staff who have been furloughed may have seen their income fall, while self-employed workers are facing a serious cash flow crisis with work cancelled and no way of generating an income until government help arrives.

With a global recession on the way, your own finances may have been significantly affected by the pandemic. So, if you are going through a divorce – or if you are divorced and already pay maintenance – your current circumstances could be very different to where they were just a few weeks or months ago.

Fluctuations in asset values mean that a financial settlement could therefore suddenly look rather unfavourable for one party in your divorce. For example, if you had decided an equal split of assets, with one party keeping the family home and the other shares and a pension, the fall in global stock markets could significantly unbalance such an agreement.

If your divorce is currently in process then you may want to pause now in order that the financial settlement can be reviewed in light of recent events.

If your divorce has concluded, reopening a financial settlement is much more difficult. You can make an application to the court to challenge a financial order if a new or unforeseen event occurs which you believe makes the settlement unfair. Such an appeal can be lodged under what is called a ‘Barder event’.

What is a ‘Barder event’?

A ‘Barder event’ is an appeal to set aside an existing financial order, and refers to a legal precedent set in 1987.

In this case, the judge set down four conditions which must be met in order for you to make a challenge to a financial order based on a ‘new’ event. These four conditions are:

  1. The new event must have happened within a short time of the financial order being made.
  2. The application to appeal the order was made relatively promptly in the circumstances.
  3. The new event must have happened since the order was made, and it must invalidate the basis (or ‘fundamental assumption’) on which the court made the order.
  4. The appeal would not prejudice any third party who had acquired an interest in a property that was subject to the financial order.

This means that any appeal against a financial order that had been made in the recent past (before the pandemic) is likely only to be successful if the judge views the coronavirus outbreak as an ‘unforeseeable and unforeseen’ event.

Legal experts believe that if one applicant was successful in appealing a financial settlement because of Covid-19, many more such applications would follow based on this precedent.

Note that the 2009 case of Myerson saw a husband appeal a financial settlement after his share portfolio lost 90% of its value in the year after his divorce as a result of the global financial crisis. This appeal was unsuccessful as the court held the crisis was not ‘unforeseeable or unforeseen’.

In addition, the case of Maskell affirmed that a loss of employment is also unlikely to constitute a ‘Barder event’.

Every case will be different, and so even though the chances of success may be limited, there may be instances where an application to change a financial order may succeed because of the coronavirus pandemic. It’s important that you seek professional legal advice, and that you do so quickly.

 


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