In the event that something unforeseen and unforeseeable happens following a financial remedy order that undermines the basis of a financial settlement, following a divorce, it is open to either party to apply to the court to reopen the financial remedy proceedings and to potentially appeal the terms of that Order.
In order to be successful it is necessary to satisfy the court that there has been a “Barder” event. This reference refers to the case of Barder v Barder 1987.
The Courts are always mindful to not open the floodgates to applications and subsequent cases have clarified that changes in the value of an asset even where significant would not qualify as a Barder event.
Many lawyers wondered at the start of the Covid pandemic how this would affect financial settlements and the ability to apply to the court citing Covid as a Barder event. In the case of BT v CU, Mostyn J said in response to the question of whether COVID-19 is capable of being a Barder event, that the answer was ‘probably not’, although ‘…as always, it depends on the specific facts of the case’.
The Court has previously considered such applications following financial crashes but even when shares have lost all their value, in cases where a party has chosen to retain the more risk laden assets, the Court has not intervened and allowed the appeal.
It is however worth noting the distinction between an Order that has been made following a contested hearing and an order being made following an agreement between divorcing couples. When the Court is asked to make a final Order, because the parties cannot agree, they are duty bound to consider if either party is retaining more of the risk laden assets and this can often be reflected in an unequal division of assets.
The Court has further determined that global economic crashes are a natural impact of price fluctuation. Thorpe LJ’s approach in the case of Myerson, was that ‘…once the couple are divorced and their capital divided, they cannot normally expect to profit from, any more than they should expect to lose by, later changes in the other’s fortune’. Certainly, where a property is transferred to one party and the other party’s interest is shown as a charge back by way of a lump sum to be paid, is more of a risk than a percentage being shown, as a percentage will follow the up and downs of the market.