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Covid-19 – Family Financial Orders

Covid-19 – Family Financial Orders
April 30, 2020 Emma Birch

Pound coins displayed on a black surfaceFor those that have recently agreed a financial court order there may be questions you have if there has been a sudden change in your circumstances  about whether that financial court order can be altered.  The big debate is whether Covid 19 is a Barder event.

So what is a Barder event?

It refers to a principle from the 1987 case of Barder v Barder.  In this case the court ordered the husband to transfer his interest in the matrimonial home to the wife who was caring for the parties 2 children. Sadly a  short time later the wife killed the children and took her own life. The husband lodged an application with the court for leave to appeal the original order out of time. It was decided in that case that the events were both new and that they undermined the basis of the original order.

The case set down four principles that need to apply in any successful application to change such an order. In summary they are:

  1. New events have occurred since the order was made which invalidate the basis or the fundamental assumption from which the order was made.
  2. The new events have occurred within a relatively short time of the order being made.
  3. The application for leave to appeal the order out of time should be made reasonably promptly.
  4. Third parties should not be prejudiced by the grant of leave to appeal out of time.

Successful cases  based upon the Barder principle are rare and the majority of applications for Barder appeals have failed.

If you are dissatisfied with a financial order made, broadly you have the option to appeal the decision within 21 days. If that limit has passed there are two options,  firstly to apply out of time if there has been a Barder event or secondly to apply to set the order aside on the basis of fraud, mistake, undue influence, non-disclosure or lack of capacity at the time the order is made.

If you wish to rely upon there having been a new event, then it must be have been unforeseen and unforeseeable. A  case involving the collapse of the housing and financial markets where one party lost 90% of their capital assets was deemed by the court to not be a Barder event.

In early January 2020 China confirmed that it had identified a new virus. On 11th March 2020 the world health organisation declared it a pandemic. So if you have done a deal and obtained an order very recently, the question is whether the current situation was reasonably foreseeable? The truth is that we don’t yet know whether the courts will think Covid 19 is a Barder event but court orders that Emma Birch, Partner, Head of Matrimonial & Family, Enoch Evans LLPare being agreed now, with the pandemic being known are unlikely to fall under Barder, but if the order was made recently then you might have an argument for a Barder event. These are unprecedented times  – so who knows!

To me there are two things that are certain. The courts will not want to open the floodgates to lots of claims and you will need to act quickly.

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