COVID-19 has had a severe impact on all of us; not least couples who are divorcing. Adding to the emotional and financial upheaval (which is almost inevitable for a relationship breakdown), we now have a hugely uncertain economic climate.
Of late, we have seen businesses closed and jobs lost even in areas which were previously seen as safe employment. This has led to many asking the question: “What can be done if one party to a divorce falls upon hard times unexpectedly after the divorce is finalised?”
What is a Barder Event?
The case of Barder v Barder (1987) established that the Courts may grant applications to set aside existing financial orders on the ground of ‘new events’ which have occurred shortly after the divorce order was made. Recent events have led family practitioners to question the application of ‘new events’ in light of COVID-19 and whether the pandemic would provide sufficient grounds to revisit and set aside a recently made settlement.
Successfully raising a Barder Event has been tough. For instance, in Myerson v Myerson, (a case arising out of the 2008 Financial Crisis) the husband attempted to raise a Barder Event by claiming the crash caused his financial position to deteriorate dramatically. The Court dismissed this by concluding that such losses were part of the natural process of price fluctuations and a reasonably foreseeable risk when investing on the stock market.
Why may COVID-19 be different for divorce?
COVID-19 is a worldwide virological disaster. It has forced governments to take drastic and previously unconsidered measures. It can be argued that coronavirus was not reasonably foreseeable and was not, for instance, borne out of volatile global stock markets. However, despite the enormity of the crisis, the recent case of FRB v DAC (No.3) suggests that the Court will be reluctant to accept an application to set aside a financial order due to COVID.
Here, the husband (and son of an immensely wealthy Indian family) argued that he did not have the means to pay £64million to his wife as made in a final order in June 2017. The husband argued that the pandemic constituted a Barder Event which caused an “enormous reduction in [his] financial worth” in his hotel, airline, and care home businesses.
However, the Court dismissed the husband’s application stating that it would be improper for a Court to vary financial orders on macro-economic grounds (i.e., COVID-19) and that the husband failed to provide evidence (such as trading figures, profit and loss accounts, underlying documentation, and valuations) that would, at face value, prove there had been a fundamental change in is worth.
The significance of this case is that an applicant:
In a very different situation, the Court in the case of Nasim v Nasim  considered a Barder Event was had occurred as the children of the family had to move in with the husband following a violent incident between the Wife and her eldest daughter (then aged 13) just six weeks after a final order was made. This might indicate that in the context of COVID-19, if seriously health consequences led to a significant change in a family’s living arrangements, then the Court would consider this.
However, to date, a successful case for raising a Barder Event due to COVID-19 has not been made. If it does, it will provide clarity and assistance in understanding the Court’s attitude to similar world events in the future.
If think that COVID-19 will impact the outcome of your divorce and would like to speak to a divorce lawyer please contact the head of the Family department, Jane McDonagh.
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