Mahesh Madlani. Axiom Stone looks at how lockdown is affecting the financials
As the Covid-19 pandemic causes us to remain in lockdown across the UK, those that are currently considering or going through a divorce are likely to have questions about how this uncertain and turbulent situation might affect them.
Divorce during lockdown
The lockdown will not affect thoughts about, or the progress of, a divorce. The courts have confirmed that online applications are continuing to be processed and disputes can be dealt with remotely.
If you are currently contemplating a divorce, you will need to consider a few additional factors before beginning the process. This is particularly true if you and your spouse are living together or one of you have been furloughed, causing a substantial change to your financial situation.
If you are going through a divorce, your process is still continuing to progress. For example, if a court date had already been set before the COVID-19 outbreak it is likely to still go ahead where possible either remotely by telephone or video link.
Financial settlements in the court process
If your agreement has already been lodged at court by consent order there were already inherent delays in the court process before the pandemic struck. The current situation has intensified the delays, but rest assured that the court will get round to approving and sealing your order.
If you have already reached a court-approved settlement and believe that it is no longer fair due to the circumstances of the lockdown, it is important to seek legal advice and guidance as soon as possible. It is crucial to get early legal advice as, in this type of scenario – where you are potentially reopening your case because you feel that the settlement is no longer fair and reasonable due to the current pandemic – your next steps need to be carefully considered.
What happens to negotiations?
If you have reached a financial agreement, but have not yet submitted this to the court, you may wish to consider a temporary change to the agreement until the lockdown has finished. This way, the court can take into account any changes to either party’s financial situation as a result of the lockdown.
It is clear that financial arrangements made before the lockdown may need to be reviewed and updated to ensure that any settlement negotiations are conducted in the correct context. For example, the value of your pension, investments or property are likely to have been affected by market fluctuations during the pandemic. The true impact of the virus outbreak on our economy will not be known for a long while, so delaying the decision-making in these times is not unreasonable.
As ever, negotiations will depend on the expectations of the parties and when they wish to settle. As the pandemic continues to produce uncertainty it is best to consider pragmatic solutions. Additionally, if you are in the process of selling property before or during your divorce proceedings, you will need to take into account government guidance on purchasing and selling properties during the lockdown. For more information on whether you can still proceed with the sale of your home, see our update on home moving during the coronavirus outbreak *
Regardless of how far your divorce has progressed, it is always best to seek pragmatic solutions and consider temporary changes to agreements. As the courts adapt to remote hearings during the lockdown, it is inevitable that some matters are being prioritised – but financial remedies is not one of them. Therefore, you may wish to consider different legal solutions such as Alternative Dispute Resolution (ADR) or you may want to consider a Private Financial Dispute hearing
If you are currently in negotiations, you may also wish to consider waiting for the lockdown to end to see how the markets react before agreeing the final settlement.
Manisha Raja – Senior Associate
“During the corona virus crisis the family courts have been adapting to working remotely but quite often the less urgent cases typically financial cases are being adjourned at short notice, after the lockdown we anticipate that there will be a backlog of cases to re-list and a long road of waiting ahead. If you find yourself in this situation and want to discuss an early resolution then there are other options such as mediation, private FDR or arbitration whichever is more appropriate.”
Note: the information contained in this article is accurate at the time of publication on 19 May 2020. The remarks in this article are not a substitute for legal advice on the specific circumstances of any case.
Should you require assistance in relation to divorce proceedings and reaching a financial agreement arising from divorce proceedings or for further information in relation to this article, we would be delighted to hear from you. Please contact our Senior Associate, Manisha Raja on 0208 951 6983 or MR@axiomstone.co.uk for further information.