With the current uncertainty as to how the economy will cope during, and following, COVID-19, it may be that some of the terms of your financial settlement are no longer viable, or indeed possible. Ordinarily, it is extremely difficult to back out of an agreement, once it has been reached in the Family Courts. This is particularly so where it has been approved by a Judge, and is therefore legally binding.

In rare circumstances, one can apply to reopen the case and vary the settlement on the basis that an unforeseen event has occurred shortly after reaching settlement, such that the settlement has been undermined. This is known as a Barder event, following the case of Barder v Barder 1987.

It may be possible to argue, therefore, that some of the financial consequences of COVID-19 could be included in the remit of “rare circumstances”. For instance it is arguable that the following could be undermined by the economic consequences of COVID-19 where there is:

  • An agreement to sell shares or other investments to fund a lump sum payment, particularly by a certain date;
  • An agreement to pay increased child maintenance, or spousal maintenance, on the basis of your income. This is particularly important where you have encountered a redundancy or a reduction in your pay (although this alone may only constitute the consideration of an application to vary the terms of an agreement that is more affordable) ; or
  • An intention to sell the family home, and rehouse separately using the proceeds of sale, and/or a remortgage. Job losses and a very limited pool of likely buyers and sellers (if any) could frustrate your attempts to action this part of the agreement.

There are several examples of cases where changes in the value of assets and/or in your employment status have been viewed as Barder events, enabling parties to move away from the agreement they have reached and it would be important to have due consideration of these in advance of any application to the Court.

Each case will therefore turn on its individual facts. The 4 conditions for the circumstances to qualify as a Barder event are:

1. A new event must occur after reaching settlement, and must invalidate the basis or a fundamental assumption on which settlement was made (i.e. an appeal would very likely succeed);

2. The new event was within a relatively short time following settlement, likely a matter of months;

3. The application for leave to appeal on the basis of Barder is made reasonably promptly;

4. Receiving leave to appeal would not prejudice third parties, e.g. the appeal would not undo the sale of the family home to a buyer who has acted in good faith and who has paid market value.

If you would like any further information on any of the above, or would like to discuss your particular circumstances and how Knights could help, please contact a member of our Family team.