The long term impact of Coronavirus on the economy is as yet unknown.
What we do know is that many people have a financial settlement on divorce that is based on their financial position before the current pandemic, which may now seem a world away.
A lot of people will be wondering whether a court order be changed to reflect these new circumstances?
Court Orders: Will They Be Changed As A Result Of Coronavirus?
Some elements of a court order can always be subject to change.
For example, the amount of maintenance can go up or down and the length of time it needs to be paid for can be reduced or sometimes extended if there is a relevant change in circumstances.
If you have a lump sum that is to be paid in instalments this can also be changed.
The court would be reluctant to change the amount, but the timing of the payments can be changed depending on the circumstances.
These options could prove to be a lifeline for some families who have seen their income dramatically drop over the course of the last few weeks.
What About Capital Assets & The Family Home?
There are of course other types of court order which usually cannot be changed, typically those dealing with how the capital assets are divided and what happens to the family home.
These are usually set in stone, however there are a small proportion of cases where these orders can also be changed. Most commonly this is when there has been a significant mistake or one person has failed to disclose a significant asset.
There are also however a small number of cases where a financial order is changed as something unforeseen has occurred which fundamentally undermines the order.
Many people are now asking, is Covid 19 an event so unforeseen that court orders should be changed as a result?
This is a complex area of law and as yet the theory has not been tested by the court.
Learning From The Financial Crisis In 2008
What we do know is that after the financial crash in 2008, the court determined that market volatility did not justify changing an order, even though the drop in value of the assets concerned was significant.
What we don’t know is whether the courts will see Covid 19 as a similar example of the ups and downs of the financial market, or something unprecedented and completely unforeseeable.
It may be that a person who has suffered a drop in their assets due to fluctuations in the stock market will be seen differently to a small business owner who’s business has become completely unviable almost overnight.
At Sinclair Law we are experts in financial settlements on divorce.
It is our view that inevitably there will be cases where things have changed so radically that it is arguable that a previous order should be overturned.
There are also options in relation to parts of the order that would be capable of change in any event.