The Impact of Covid-19

Financial and emotional stresses caused by the Coronavirus pandemic have placed intolerable strains on many relationships. For some, this period will be a catalyst for change. The lockdown restrictions may have wreaked havoc on the value of businesses, properties, pensions & earning capacities. Everyone considering separation will be worrying whether this is an appropriate time to separate, given the economy is in such a state of flux and there is so much uncertainty. Some may be struggling to comply with orders made prior to the lockdown period.

Whilst the President of the Family Division has indicated that Family Courts are “open for business as usual”, many cases are being adjourned, or hearings are being dealt with remotely by telephone or skype. Mediations can take place via zoom, which may suit those who are anxious about meeting their estranged partner face to face.

Privately Funded Negotiation Hearings

The use of privately funded negotiation hearings, known as Private FDRs, and arbitration hearings can be used effectively to progress cases involving children and finances to circumvent delays caused by the court process. Both private FDRs and arbitration involve hiring a judge for the day dedicated to resolving your case. Private FDRs have a high success rate for achieving a settlement. Decisions made in arbitration can be made into court orders and enforced as such. 

Adjournment of court applications may be used appropriately to provide time to obtain reliable indications of values of businesses, properties and pensions. RICS surveyors are now able to conduct internal inspections to value properties. Letting & estate agents are also open for business. Forensic accountants and pension actuaries are mindful of the effects of the pandemic on the value of businesses and pensions. 

Court Orders

In relation to orders which have already been approved and sealed by the Court before lockdown, it may be possible for you to either apply to vary the court order or to seek advice as to whether you could apply to appeal out of time and set aside the original order if your financial circumstances are radically altered. 

The Court has power pursuant to section 31 of the Matrimonial Causes Act 1973 to vary the following orders:

  • Maintenance pending suit and any interim order for maintenance for a spouse
  • Any maintenance order 
  • Any secured maintenance order
  • Any provision for payment of a lump sum by instalments
  • Any deferred order for a lump sum by instalments
  • An order for sale of property
  • A pension sharing order

Powers to Vary

When exercising its powers to vary, the Court will look at all the circumstances of the case, first consideration being given to the welfare of any child of the family under the age of 18, and the circumstances of the case shall include any change in circumstances in any matters to which the Court was required to have regard when making the order to which the application relates.

Spousal maintenance payments may no longer be affordable for the payer who might have lost employment or might have been placed on furlough. Equally, the payee may have encountered financial hardship as a result of losing a job. The Court has the power to temporarily suspend spousal maintenance payments or increase payments to meet needs. The Court may reduce spousal payments to a nominal amount, with increased maintenance payments to become effective once the paying party returns to work.

Paying a Lump Sum

There is no statutory power to vary a lump sum order, only to vary the timing of payment of a lump sum. However, the Court does have power to vary a lump sum order payable by way of instalments. If the lockdown has made it difficult for a payer under a court order to pay a lump sum ordered, the payer could potentially apply for permission to appeal out of time to set aside the order upon the basis that the Coronavirus outbreak is an unforeseen event which has fundamentally changed the premise upon which agreement was reached. It could be argued that the Coronavirus outbreak represents a Barder event. 

It is not known to what extent such applications will be successful, as previous cases brought on the basis of a Barder event have rarely succeeded. However, we have never had a Coronavirus pandemic before, and this event may have affected the values of the assets to such an extent that an appeal may well be successful.

The Court may be more willing to accept temporary variations to Orders and will be hesitant to make permanent variations when the long-term economic effect of the pandemic remains so uncertain. 

As with every case, the costs of a Court application must not outweigh the benefit which is sought. Litigation finance may assist you in financing the cost of your case if you do not have funds to pay for a solicitor.

Here to Help

Our expert Family Team are here to support you through the Covid-19 period and can offer comprehensive and reliable advice on your finances. If you would like to speak to a member of our Team, please call 0161 941 4000 or email the Family Law team.