Is a final financial order on divorce always final?

Is a final financial order on divorce always final? Our family home was transferred to my ex-wife shortly before the coronavirus outbreak. 

Subsequently, my business has collapsed. Had this happened before the court order I don’t think the judge would have given the house to my wife in its entirety.

Can the order be changed given the exceptional circumstances?

Thousands of court orders were made last year and could be reviewed after coronavirus

Mark Harrop, a family lawyer in London-based solicitors Family Law Partners, replies: This is a really interesting question. Some elements of financial orders are easier to change than others. 

Maintenance payments, for example, can always be varied. If someone has lost their job it can be fairly straightforward to have those payments reduced or suspended. 

You can also vary the timing of lump sum instalments if the original timetable is no longer affordable.

Other elements, including transferring properties, are far harder to change. This is because it means reopening part or all of the case to reassess the fairness of the original order, something judges are extremely reluctant to do. 

Mark Harrop, a family lawyer in London-based solicitors Family Law Partners

Underpinning this is idea that orders should give divorced couples certainty and finality so they can move on with their lives.

To have any chance of succeeding a number of tests need to be met. 

First, you need to show a significant change in circumstances within months of the final order. 

Second, the change needs to have been both unforeseen and unforeseeable at the time the order was made. 

Third, the change must undermine the basis on which the original order was made.

It helps to look at some real-life examples to understand how the court has dealt with these three questions in the past.

One early case concerned a husband who transferred the family home to his wife to live in with their children. Tragically, five weeks later the wife killed herself and the children. This was obviously both significant and unforeseen. 

The purpose of transferring the house was to provide a home for the wife and children. Their deaths negated that purpose and so the court allowed the husband to reopen the case.

In contrast, in another settlement made shortly before the 2008 financial crisis the husband agreed to pay his wife a lump sum of £11million. 

He retained shares in his company valued at £15million. Over a period of nine months the value of the shares fell by over 90 per cent, leaving him in net debt. 

The court said that share prices are known to fluctuate and so the drop, while dramatic, was not unforeseeable. It refused to change the order.

Where does coronavirus fall on this spectrum? Until the court has heard one of these applications we won’t really know.

In 2008 the court did not look at the cause of the stock market crash or whether that particular financial crisis could have been predicted. 

It was enough to say that crashes happen and that everybody knows that the price of shares can go up and down, sometimes dramatically. Claims based on drops in values of shares, houses or other property as a result of coronavirus are likely to be treated the same way.

A judge will review why the family home was awarded to your ex-wife before reopening a case

What we can say is that the enforced closure of businesses, the financial impact of lockdown and the government’s stimulus measures in response are truly unprecedented. 

It is difficult to see how the current situation, with businesses being told to close their doors and people to stay at home, could be described as anything other than unforeseeable.

That brings us back to the third test – whether the change has undermined the basis on which the original order was made. 

You have not said why the judge decided to transfer the family home to your wife, but there may be some clues in their judgment. You will need to look at why the settlement was structured in the way it was. 

Did the judge think you could afford a comparable property from your business income? 

That may no longer be true. Or was the judge’s priority to ensure your wife was adequately housed? 

If so, a change in your fortunes may have less bearing. This is a difficult question that judges will have to assess on the facts of each application. 

Finally, it is important to emphasise that although we do not yet know how judges are going to treat these applications, waiting until we do may be too late. 

If you want to change your order you will be expected to act promptly. These could be expensive and risky applications to make, so it is vital you take specialist legal advice on your particular situation before doing so.