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Tracy Cross

Tracy Cross

Partner & Head of Family

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What if Covid-19 impacts a recent financial settlement or order?

Usually an order made or approved by the court setting out a financial settlement within divorce proceedings, is final and it is very difficult for that to be changed in any way.

However, where an order has recently been made, or approved, by the Court, and the foundation for that order has been changed as a result of the recent Covid-19 outbreak, is there anything you can do?

It may be possible to apply for leave to appeal against the order or set it aside because of the Covid-19 crisis.  Such an application on this basis is often referred to as a ‘Barder type event’ referring to the case by this name some years ago in which the principles of such applications were set out.

Essentially, the following principles need to apply for such an application to be considered;

  1. The event must have been unforeseeable and occurring after the order has been approved;
  2. The event needs to have happened very recently;
  3. Any application for leave to appeal needs to be acted upon swiftly;
  4. The application must not impact on any third-party interests.

Whether an application of this nature based on Covid-19 would be successful still remains to be seen.  The Court will want to do what it can to limit a flood of applications due to Covid-19 and maintain a situation where people can still rely on their financial outcomes.

What if you’ve just finished your negotiations but don’t have an order yet?

If you have just concluded financial negotiations, you may now feel that the outcome is not going to work because of the current crisis.  The other party may not want to consider a different outcome and often, where an agreement appears to have been reached but an order hasn’t been approved, there can then be a dispute about whether the Court should treat the agreement as concluded and approve an order in those terms.

Again, at this time, it’s difficult to know how a court will treat any such application for a financial order in those circumstances as the situation is still so new, however it may be easier to look at a financial settlement again before an order is made than just after.  Every effort should be made to engage the other party if the impact of Covid-19 is so detrimental such that the basis for the agreement becomes fundamentally unfair.

It’s worth remembering that any litigation will be costly as well and likely to take many months to resolve.  Alternatives such as mediation can help to speed up discussions and see if an agreement as to the way forward can be reached and may be particularly useful where parties haven’t got an order and want to avoid court.

Specialist advice will certainly be necessary in these situations fortunately the highly experienced Family Lawyers at Band Hatton Button LLP remain able to work through the current crisis and provide a full service to all clients, old and new.