Posted: 28 / 04 / 2020
The pandemic’s far reaching economic impacts will affect all those already divorced with continuing financial settlements and those intending to divorce.
Unhappy couples might want a divorce after this period of lockdown, but it might become unaffordable if there is a loss of income from lower sales, jobs being lost and families being faced with a recession. If the marital wealth is held in shares or market based funds, a substantial drop in the value of assets, including pension funds, will have already been experienced. A reduction in the value of assets will be in the interest of the financially stronger party who will want to seek a financial resolution as soon as possible. The financially weaker party will want to see if the financial situation improves before embarking on negotiations.
During this lockdown period parties will find it increasingly difficult to appoint experts to carry out valuations of assets eg property valuations. Nevertheless up-to-date valuations of assets should be obtained before a settlement is agreed/ordered, particularly where valuations had been obtained prior to the pandemic including business valuations that have already been prepared by a forensic accountant. This will add to costs but this is likely to be minimal when compared to the potential amount lost if relying on over-inflated valuations.
Many parties that are already divorced or separated are worrying about their wealth and income streams in relation to ongoing maintenance obligations and other orders. However existing arrangements may be varied if there is a material change in circumstances such as being made redundant or owning a business that is in serious financial difficulty. The Courts may be sympathetic to requests to vary orders until there is more certainty however it will depend on how much the individual’s wealth has decreased and whether the Courts view the pandemic as ‘unforeseen and unforeseeable’-a Barder event.
It’s envisaged that there will be a flood of people wanting to reduce payments and vary orders in due course.