Once a financial order has been made by the court, whether by consent or following a contested final hearing, the court expects the parties to abide by the terms of the order.
This might be to transfer property or shares or other assets to the other party or, pay a lump sum of money.
But what if financial circumstances change after the making of the order? Can a party apply back to the court asking that the court changes the terms of the order?
Is Covid-19 one of these circumstances?
Deborah Marsh, associate and collaborative lawyer in the family team at Wake Smith Solicitors, looks at the practical points and why the costs risk, should you get an application wrong, means expert advice is essential.
Deborah said: “It is extremely difficult to have a financial order set aside or varied as to its capital terms, by which we mean the terms dealing with, for example, what property each will receive or a lump sum payment.
“However, in circumstances where an unforeseen event occurs shortly after the making of the order, that fundamentally changes the basis and effect of the order, then it is possible. It is also possible to vary a lump sum that is to be paid by instalments.
“A recent case, FRB v DCA (No 3) and (No 4), where the implications of Covid-19 were highlighted was not successful, but it has not closed the door fully.
“In this case, the husband's evidence surrounding the financial effects of the pandemic on his fortunes was lacking and it was for the husband to prove.”
The Judge further commented: “I have also considered the topsy-turvy financial times in which we now live. The major stock market indices are now at a high level and have rebounded to above their pre-Covid-19 levels. Most commentators believe that, at some stage within the next couple of years, the world economy will be back to where it was. It is essential to view H's application in the long term as well as in the short term.”
“So, the husband in this case, given his fortunes and lack of proper evidence, was unable to convince the court but, there may be circumstances where the effects of the pandemic are such that an application will succeed.
“However, great care must be taken before such an application is made to the court. If unsuccessful, the other party will be entitled to ask for a costs order in their favour, therefore the party applying having to fund their own legal costs and paying the legal costs of the other party as well.
“Other applications could instead be made for example, to vary the amount or timing of an ordered lump sum. Serious consideration needs to be given to which application or applications should be made depending on the circumstances of each particular case.
“Whatever the path, expert advice from a family solicitor is needed. If you get an application wrong, the costs risks can be high.”
For further advice on all family law matters contact Deborah Marsh at Wake Smith Solicitors on 0114 266 6660 or at [email protected]
