Can divorce settlements be re-opened

Can divorce settlements be re-opened

When a financial order recording a financial settlement is made it is intended to be final or at least as final as possible.

In many cases there will be a clean break. This means that the order is intended to be a final order.

In some cases there will be provision within the divorce settlement for maintenance. Maintenance can be varied (if there are changes in circumstances). Sometimes when maintenance is reconsidered, a maintenance order can be replaced by a lump sum order – which effectively pays off the maintenance claim and achieves finality at that point.

Normally when there is ongoing maintenance, there will be finality in the financial settlement so far as capital is concerned. (Assets such as houses, savings and pensions).

There are however circumstances where a divorce settlement can be reopened. This could be in the following circumstances:

If the court has made an error

If the court has made an error – then the divorce settlement can be reopened through an appeal.

There are various rules concerning the circumstances in which an appeal can be made which we will expand upon in a future blog.

If the court has not made an error

If there is no error from the court, then the divorce settlement can be reopened in the following circumstances:

• A fraud has been committed
• There has been a material non-disclosure
• A subsequent event has occurred which was unforeseen and unforeseeable at the time that the order was made and which invalidates the basis upon which the order was made. (Lawyers will refer to this as a Barder event – Barder v Barder being the most prominent case when the courts gave guidance about the circumstances when a divorce settlement could be reopened in these circumstances).

Material non-disclosure

There is a duty on parties within a divorce to provide full and frank financial disclosure to each other and to the court. This applies to both contested proceedings and to negotiations leading up to a consent order.

The form which is submitted to the court together with a draft order contains a declaration of truth which is signed by the party. The form E – which is the standard form used for financial disclosure also includes a statement of truth which needs to be signed.

The duty to provide full and frank disclosure is ongoing. This means that any changes in circumstances need to be disclosed in a timely way.

The duty to provide full and frank disclosure always arises.

If the divorce settlement order is made by agreement/consent then there must be a valid consent to the terms of the divorce settlement by both parties. A nondisclosure of material information will also mean that the court will have been asked to approve the terms of a divorce settlement based on incorrect information.

Applications to overturn a divorce settlement on this basis can be complicated and potentially expensive – although cost orders can be made against the person who has misled everyone – so if such a situation may have arisen you need to seek legal advice as soon as possible.

A subsequent event has occurred…

If a Barder event has occurred there can be an application to the court to overturn the divorce settlement.

The new event needs to be both unforeseen and unforeseeable and to have occurred since the approval of the divorce settlement and the events need to invalidate the basis of fundamental assumptions upon which the divorce settlement was approved

The new event needs to have occurred within a relatively short period of time after the approval of the divorce settlement. Normally no more than a few months and almost certainly less than a year. What will count will be very fact specific.

Examples of events could be the death of one of the parties (as happened in the case of Barder) or a party remarries rapidly after the divorce settlement was approved or one of the parties receiving a significant inheritance, or sometimes a significant in unforeseen change to 1 of the parties housing needs – perhaps children moving from one household to the other.

These cases are very fact-specific and it is important that if something has happened which might represent a Barder event that you seek legal advice as soon as possible.

Why do I need to provide so many financial documents for my divorce?

The reason why both parties need to provide so many financial documents is because there is an ongoing duty on both parties to a divorce to provide full and frank financial disclosure.

Full and frank means not simply telling the other person what assets are worth, but producing documents to prove the value of assets.

If a solicitor is instructed to advise a client in connection with their divorce settlement they will wish to ensure that there has been full and frank financial disclosure. If their client instructs them not to seek full and frank financial disclosure – the solicitor will wish their clients to sign a fairly full disclaimer – which passes responsibility for the consequences of not having full and frank disclosure to the client. The solicitor is not able to do their job properly unless they are satisfied that they have full information.

If a client does not seek full disclosure from the other party – then it is likely to make it much more difficult for them to try and claim later on that the divorce settlement was bad and/or that they have been misled. They should have sought full disclosure for their own protection in the first place.

If there are negotiations through solicitors (including through collaborative family law) or if there is a court application, the solicitors will expect their clients to complete form E and will ask for all documents in the checklist at the back of for me to be provided. Further documents can also be requested. If there are transfer values to any pensions of more than £100,000 then there is also a likelihood that a specialist pension report will be sought.

The same follows for financial disclosure in family mediation. A lot of time at the start of the family mediation process will be spent in the gathering together of the parties financial information. The mediator will also produce a joint financial summary. This is a necessary task which is for the protection of both parties. If mediation takes place without there being financial disclosure – then any reasonable solicitor will advise their client against proceeding with what has been discussed in mediation at least until such a time as they are satisfied that full and frank financial disclosure has fully taken place.

Therefore, in answer to the question – everyone needs to provide so many documents in order to ensure that they are making good decisions and also decisions which are going to be as final as possible.

What happens if we don’t get a financial order?

The alternative to achieving a divorce settlement based on full and frank financial disclosure is to do nothing. This might save money in the short term – but this could also/is likely to mean that one of the parties is not receiving what they should receive as a fair divorce settlement.

The potential financial claims that both are able to make following a divorce can still be activated years later and the financial claims from each party to the divorce are only terminated by their own remarriage or death or the eventual making of financial order at a later date.

If a financial claim is pursued years after a separation – the date when the court considers the circumstances of the parties will be the current date – although the court will take into account the situation of the couple when they separated and what has happened since. Seeking a divorce settlement after a long delay is not normally a good idea.

Divorce settlements should be dealt with at the time of the divorce. Divorce settlements can be dealt with in an amicable way. We are of the view that collaborative family law and family mediation supported by legal advice are normally the best ways to proceed. If everyone is proactive and constructive then the obtaining of a divorce settlement does not need to be excessively expensive. Naturally, there is a cost involved – but this is inevitable. High conflict will add to cost.

Therefore, if you are divorcing – best to get good legal advice as soon as possible. We will be happy to help.