Can you revisit a clean break order due to COVID-19?
Whilst the UK is slowly easing out of lockdown at different rates, the unprecedented times of the global COVID-19 pandemic have had a devastating impact on financial investments and resources. No one is able to predict what the total economic impact will be or how long this crisis will last.
A vast number of people have experienced a dramatic change in their personal financial circumstances since lockdown began. Some have been faced with the prospect of redundancy. Others have opted into a salary sacrifice scheme or had a freeze on any bonus payments. A large proportion of the working population have been furloughed or faced business closures and all this has meant a huge reduction in the value of assets and investments.
There will be a few people who are going through a relationship breakdown and may have recently agreed or entered into a financial settlement which includes a clean break and is based on pre-COVID valuations of the marital assets. Therefore they may be asking whether it is possible to revisit the terms due to the financial impact of COVID-19?
The idea of the clean break clause within an Order is that once all martial assets have been divided, spouses or civil partners agree that they will be unable to make any further claims against their ex in the future, either whilst their ex is alive or when they pass away. The idea is to give a finality to the relationship and allow both parties to move on without fear that their ex may try to claim a share of assets accrued after the relationship has ended.
If a financial settlement has yet to be sealed by the Court as a formal order, either party could put the matter on hold or revisit the terms fairly easily as negotiations can be reopened and the value of assets looked at again. If a financial settlement has already been made into a court Order, the process of re-opening the case is trickier but not impossible. To re-open a sealed Order a party to the Order must establish one of the following grounds:
- Material non-disclosure
- Certain limited types of mistake
- A subsequent event, unforeseen and unforeseeable at the time the order was made, which invalidates the basis on which the order was made
The last point is relevant in this global crisis as COVID-19 and its impact on the economy could be classed as an unforeseen event. In order to try and be successful in relying on this ground, 4 additional factors need to be proven:
- The new event invalidated the basis or fundamental assumption upon which the order was made;
- The new event had occurred within a relatively short time of the order. No precise time limit was set down, but it was ‘extremely unlikely’ that it could be as much as a year and in most cases will be ‘no more than a few months’;
- The application for leave to appeal out of time should be made reasonably promptly and
- The interests of third parties should not be prejudiced.
If two ex-spouses or civil partners have recently had their financial settlement sealed by the Court and it includes a clean break clause, It may be possible for an application to be made to the Court to revisit the terms of the Order. However, each case is fact specific and success will depend very much on the settlement terms reached, the level of assets involved and how much co-operation is received from the ex-spouse or civil partner.
If anyone is in this situation and would like any advice on whether they can revisit a clean break order due to the financial impact of COVID-19 please contact our family department where our family solicitors will be on hand to advise and assist with the process. Call on 01473 617 317 to book an initial consultation.
Amanda Erskine is a solicitor in the Family department at Barker Gotelee Solicitors in Ipswich.