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With the fast-developing global pandemic COVID-19 wreaking havoc on our daily lives, there is a dense feeling of uncertainty in the air. What does this mean for those in the midst of a relationship breakdown, or indeed those who have already come out the other side but remain connected to their ex-partner by way of children or ongoing maintenance?
20 March 2020
This article explores a few of the issues that may be encountered in the upcoming months, which will be spent battling coronavirus and preparing for its aftermath.
For those embarking upon divorce and separation
Reports from China already suggest a spike in divorce rates as couples start to spend significant (and at times, stifling) amounts of time together. With London just a few steps behind China and other European cities, family lawyers here are preparing for a similar trend.
Inevitably, a key consideration for a separating couple is going to be how to deal with their finances. The starting point for any case is a 50/50 split of all assets in the matrimonial pot, subject to the principle of needs. That means that if one party ‘needs’ a certain amount of money to rehouse appropriately, perhaps in order to house a child of the family with them, then the court can depart from the equal split and award one party more than half. Arguments often arise both in the context of ‘needs’ and also in establishing what is in the matrimonial pot in the first place (for example inherited assets or assets acquired before the marriage may be treated differently).
As we have already seen rather alarmingly in the financial markets, coronavirus is having a substantial impact on asset values. This means that what might have been available in the matrimonial pot a month ago, is now significantly less. An asset slump such as this is usually in the interest of the financially stronger party, the ‘payer’, rather than the financially weaker party, the ‘payee’. Now is therefore a good time for the payer to seek financial resolution, whereas the payee may want to slow the process down.
It is also worth noting that often in cases where the finances are complex, parties need to appoint a third-party expert to carry out valuations of assets, for example properties and companies. In the current climate, parties may find it difficult to appoint experts to carry out these valuations, especially if we go into lock-down.
So, what is the best way forward for those wanting to press on with their divorce and financial settlement? Lawyers are of course well-equipped to continue solicitor to solicitor negotiations and the President of the Family Division has released guidance to ‘keep business going safely’ and to move the court system onto a remote platform as far as possible, as soon as possible. It is also likely that there will be an increase in those using Alternative Dispute Resolution (‘ADR’), which is a process designed to move the court system to something akin to the private medical system. For those willing to spend a bit more, you can pay for your own Judge (usually a senior barrister) to conduct a private hearing. There are various advantages to this, for example you can choose a specialist who is guaranteed to have read the papers, you move at your own pace and you can pick your own date and forum. The family courts are likely to feel the strain of the coronavirus on their already very busy daily lists and by investing into the ADR process, you are likely to be in a much more controlled environment, sooner.
For those who are already divorced or separated
As the reality of the coronavirus is starting to sink in, we are already starting to hear from clients who are worried about their income streams in the context of ongoing maintenance obligations.
The general principle is that if there is a material change in circumstance, you can make an application to vary maintenance. Whether or not the impact of the coronavirus will constitute such a change will be very fact specific. Perhaps you have been made redundant or own a company that is facing significant financial difficulty. It is worth noting that the courts have a very broad discretion in variation applications and it is certainly going to be worth considering if you find yourself in a position that you simply cannot continue to pay your ex-partner at the level you are currently paying.
On a practical level, the payer in this case may want to write to their ex-partner to explain the difficulty and the anticipated drop in income and suggest a temporary reduction of maintenance (giving sufficient notice, rather than invoking an immediate change). It will then fall on the payee to enforce the maintenance order, but again, bear in mind that the court is likely to be lenient on the payer in the next few months while we see how things pan out.
Finally, it is worth noting that there may be issues with child arrangements. Children are going to be spending much more time at home and issues could arise if isolation obstructs child contact. Similarly, problems may arise where supervised contact has been ordered and social workers are no longer able to assist, or grandparents are too elderly to be relied on.
Parents should try to stick to agreed child arrangements as much as possible, but inevitably there will need to be an element of flexibility and generosity when one party misses out on time with the children. Ideally, parents would be able to resolve these issues amongst themselves, or with the support of lawyers, however sometimes it will be necessary to involve the courts. Be mindful that courts are likely to expect reasonable accommodations to be made, especially in the context of this uncertain and unsettling environment.
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