When your solicitor asks for bank statements dating back months, please believe us when we say they are not just being difficult! Gemma Francis, a Conveyancer in WSP Solicitors’ Residential...
The impact of Covid-19 upon divorce and financial settlements
COVID-19 and the resulting lock-down has had a significant impact on family life and it is widely predicted that divorce rates will rise as a result.
In addition, many who were in the midst, or had recently finalised the terms of a separation when the pandemic struck, are now faced with a world that looks very different to the one they envisaged when they embarked on the process.
What will the impact of the coronavirus pandemic be on divorcing couples? Beth Evans, Head of Family Law at WSP Solicitors looks into this below:
Divorce Proceedings during COVID-19
Family solicitors have embraced remote working, and whilst the pandemic has undoubtedly had an impact on the already stretched court system, and things are moving more slowly, it remains possible both to issue new, and to progress existing divorce proceedings through the Courts.
Impact on Financial matters
It remains the case that financial settlements can be negotiated, and implemented, either on a voluntary basis or through alternative dispute resolution such as mediation or arbitration in the current climate. If agreement is not possible, applications for financial remedy arising from a divorce can be made, or progressed, through the Courts and hearings and now regularly taking place remotely by telephone or appropriate video conferencing platforms.
That said, the pandemic has undoubtedly brought with it a range of challenges in addressing the financial aspects of a divorce. Quantification of assets, job insecurity, assessment of future needs and the availability of mortgages and other finance, are obvious difficulties in these unprecedented times. In the current climate it is difficult to obtain an accurate valuation of property, pensions, investments and business assets and to assess the parties’ needs moving forwards in the face of such uncertainty. Terms which were being considered only a few weeks ago may now look very different and a revaluation of asset values and positions is likely to be required.
Options to address these challenges might include involving a financial adviser, pension expert or property specialist at an early stage, looking to agree some parts of the settlement whilst leaving other matters open, reassessing the risk weighting of available assets and then redistributing those assets accordingly and/ or considering whether it is possible to build safeguards within the settlement terms. For many, agreeing an interim position whilst agreeing to delay long term settlement negotiations for a period in the hope that the storm will pass or the future at least will become a little more certain, may be the best way forward.
Those who finalised a settlement prior to the pandemic, but for whom that outcome no longer seems fair in the current climate, may have the option to vary certain aspects of that settlement either by agreement or an application to the Court. Consideration can be given to varying the timing to implement settlement terms, for example an extension to the date for the marketing and sale of the family home or payment of a lump sum. Orders for child or spousal maintenance can also be varied following a change of circumstances of the parties. However generally the capital components of a divorce settlement cannot be changed unless the circumstances are exceptional.
It is not yet clear whether the Court will accept arguments that COVID-19 was an unforeseen event undermining the basis of a financial order made prior to the pandemic and which can justify the setting aside of that order. However early consideration is likely to be important if you think this may apply to you. The issues are complex and past case law indicates that such an argument is likely to succeed in only a small majority of cases. In 2008 for example the Court of Appeal took the view that the market crash was not an event that would justify the reopening of a financial settlement. Only time will tell whether the devastating impact of COVID-19 on the health, life and economy of the nation will result in a different approach being taken.
Getting Legal advice on Divorce and Financial Settlements
The current circumstances require careful and detailed consideration of all the relevant issues. Advice from a specialist family solicitor at an early stage remains important to enabling you to make an informed decision as to how you wish to proceed and to achieving the best outcome for you and your family.
WSP Solicitors Family team are here to help you make life, less complicated. You can get in touch with Beth directly here or by filling out the form in the sidebar of this page. Alternatively, you can call us on 01453 847200