COVID-19, Barder Events, & the case for variation of financial orders

April 14th 2020

The unprecedented situation caused by the COVID-19 pandemic across the globe has already shown that it will have a lasting impact on society. This week the British Government advised that social distancing measures were likely to last months rather than weeks. Many businesses have already responded by taking advantage of the Coronavirus Job Retention Scheme or pursuing redundancy. The financial markets have continued to fall as the economy slows down and the threat of another recession looms.

For many of our clients who are currently going through – or have recently gone through – financial remedy proceedings, concern over the impact on both income and asset valuation has proven to be significant.

In this article we discuss some of the ways in which these challenges can be addressed.

Valuations of assets

The downturn in the economy is likely to have a significant impact on the valuation of properties, businesses, pensions, and other investments. Many individuals currently going through divorce proceedings will need to revise their expectations on what a positive outcome would be for them due to a sharp decrease in the valuation of assets and the need to provide for both parties in the long term.

Changes to settlements

It is usually not possible to make amendments to settlements relating to the separation of assets except under a limited number of circumstances, and there is a strict time limit for doing so.

One of the circumstances where a financial order can be appealed outside of the time limit is called a “Barder Event”, which is where an unforeseen event undermines the terms of the pre-existing settlement. These principles have been invoked due to factors such as changes in employment status, remarriage, and inheritance, they have also been used when the value of assets has changed significantly.

It is certainly possible that the COVID-19 pandemic could constitute a Barder Event, but Courts have been reluctant to allow this to be happen in the past. In order for any appeal to be successful on these grounds, the following criteria must be met:

  • That the event would have meant that any appeal was very likely to succeed.
  • That the event had taken place within a short time period of the original order being made
  • That the appeal is made shortly after that event took place
  • That the appeal would not affect any innocent third parties

Next steps

It is clear that both the coronavirus pandemic and the resulting measures to limit the spread will have a material impact on the separation process for several individuals who have either recently separated or are currently in the process of doing so. If you feel that you have been affected then we would advise that you seek legal advice from your Solicitor.

Patrick Mulcare is a Director at Spratt Endicott and Head of the Family Law practice specialising in financial remedy following divorce or separation. He is a Resolution Accredited Family Law Specialist and Legal 500 Recommended Lawyer.