Most of the high-net-worth (HNW) clients advised and represented by us are relieved when the Court finally grants a divorce-related Financial Order and they can finally put the legal aspects of their divorce behind them. However, although a clean break is highly desirable, the Court can vary Financial Orders sometime in the future if certain circumstances arise.

The Coronavirus pandemic has resulted in requests for the Court to vary Financial Orders relating to nominal periodic payments. For example, in the recent case of AJC v PJP [2021] EWFC B25, the Applicant was an airline pilot who lost her job due to the ramifications of the pandemic. She asked the Court to temporarily convert a previously granted Nominal Periodical Payments Order into a Substantive Maintenance Order until the airline industry started employing people again. However, the Applicant’s former husband argued that he too had suffered financially because of the Covid-19 pandemic.

In rejecting the application, the Court held that varying a nominal order upwards is different to varying a substantive periodical payment where the payee receiving maintenance of a prescribed amount understands that it may decrease if their income increases and may increase if the payer earns more and they can demonstrate need. It was held to be unreasonable to convert the Order as the Applicant had been financially self-sufficient at the time it was made, eight years had passed, and the parties’ youngest child was now 14 years old. Furthermore, the change in circumstance resulted from the economic impact of a pandemic affecting billions, not from a disadvantage generated by the relationship between the parties.

AJC v PJP illustrates that the Courts will not vary a Financial Order without good cause. However, in certain circumstances, changes are justified. But before we examine how a Financial Order can be varied, let’s briefly recap what they are.

What is a Financial Order?

There are several types of Financial Orders provided by the Court to ensure the financial settlement you have agreed in negotiation and/or mediation (a Consent Order) or a decision by the Court is wrapped up in a legally binding directive.

Common Financial Orders include: Clean Break Orders

Pension Sharing Orders Property Adjustment Orders Maintenance Orders
Lump Sum Orders

Can I appeal a Financial Order?

If you believe the Judge has made a mistake in applying the law to your case, you can apply for permission to appeal the Financial Order issued by the Court. When considering whether to grant permission to appeal, the Court will consider:

a)  Whether your appeal has a realistic chance of success, and

b)  Is there a convincing reason for the appeal to go ahead?

The Court has several remedies it can grant if your appeal is successful, including:

Affirming the Order.
Setting aside the Financial Oder.
Varying the Order.
Directing the lower Court to consider a specific aspect of the Order again.

What Financial Orders can be varied by the Court?

Under certain circumstances (see below) an application can be made to vary a Financial Order related to the following:

Maintenance pending suit.
Periodical payments and secured periodical payments. Lump sums by instalments.
Provision for children.
Deferred lump sums.

Settlement orders.
Sale of property.
Pension sharing orders (before the decree absolute is granted).

What type of Financial Order cannot be varied?

The Court cannot vary the following type of Financial Orders:

An order for a lump sum or sums under section 23 of the Matrimonial Causes Act 1973, not payable by instalments.

Property adjustment orders (except if they relate to the sale of the property concerned). A pension sharing order after the decree absolute has been granted.

How do I apply to vary or appeal a Financial Order?

The first step to take in applying to vary a Financial Order is to speak to an experienced Family Law Solicitor. They will examine your situation and establish if your existing Order can be varied.

There are several situations in which the Courts will consent to vary a Financial Order, including where one party to the Order:

Exerted undue influence over the other.
Misrepresented their financial situation or committed fraud to achieve the Order they wanted. Misrepresented other facts required to ensure the Order was just and fair.

Financial Orders can also be varied if it is shown that an event has occurred which obliterates the fundamental elements of the original agreement. This is known as a “Barder” event. The Courts have not ruled out the impact of the Coronavirus pandemic as sufficient grounds to qualify as a “Barder” event that could trigger an application to vary a Financial Order however generally these applications are limited in scope and things such as house prices falling or shares in a company being worth more or less is not going to be sufficient to vary an order.

In summary

Applications to vary existing Financial Orders can be made for all sorts of reasons, including ending ongoing spousal maintenance payments to achieve a clean break to a change in financial circumstances due to Covid-19. Our Solicitors specialise in dealing with HNW divorce and financial settlements. We act for both sides, having successfully applied for and defended many cases involving the variation of Financial Orders.

Edwards Family Law is a niche London-based firm specialising in high-net-worth divorce and international family law. To find out more about divorce and financial settlements, please phone +44 (0)20 3983 1818 or email contact@edwardsfamilylaw.co.uk. All enquiries are treated in the strictest confidence.