Can divorce settlements be reopened?

Can divorce settlements be reopened?

There is a general principle of finality in litigation. This means that the court’s final order is intended to bring the matter to a conclusion. In other words, litigation is not to last forever.

The principle applies to final financial remedies orders in the same way as it applies to final orders in other types of proceedings. Accordingly, once a divorce settlement (whether agreed or decided by the court) is incorporated into a sealed final order then the financial remedy proceedings are at an end.

But are there any circumstances in which divorce settlements can be reopened, after the order has been made?

The answer to this is that there are. A financial settlement can be reopened, but only in very limited circumstances. The principle of finality will only be put aside if there is a good reason to do so.

There are essentially three categories of cases in which a financial remedies order may be reopened:

1. Where the judge making the order fell into error;

2. Where there has been no error by the judge, but there is some issue with the material that was before the court when the order was made; and

3. Where subsequent events have changed a fundamental aspect of the order.

We will now look at each of these in turn.

Where the judge fell into error

Where a party believes that the judge who made the order fell into error then they can seek to appeal against the order. However, anyone considering an appeal should be aware that the law provides a high bar to appeals, as we will see in a moment, in part because of the principle of finality, referred to above. As a result, a successful appeal against a financial remedy order is quite unusual.

Before pursuing an appeal it can be a good idea to raise the possibility that they fell into error with the judge, as it is possible for the judge to change their mind.

If the judge does not change their mind and correct the error then if the party is still not satisfied they will need to apply for permission to appeal. Permission will only be granted if there is a real (realistic as opposed to fanciful) prospect of the appeal being successful, or there is some other compelling reason to hear the appeal.

If permission is granted then the party can proceed with the appeal.

Financial remedy appeals must be made within 21 days of the order that is being appealed, unless the court agrees to extend that time.

An appeal may be allowed where the decision was wrong or unjust for procedural irregularity.

The court may conclude a decision is wrong or procedurally unjust where:

1. An error of law has been made; or

2. A conclusion on the facts which was not open to the judge on the evidence has been reached; or

3. The judge has clearly failed to give due weight to some very significant matter, or has clearly given undue weight to some matter; or

4. A process has been adopted which is procedurally irregular and unfair to an extent that it renders the decision unjust; or

5. A discretion has been exercised in a way which was outside the parameters within which reasonable disagreement is possible. (Judges deciding financial remedy cases will often have quite a wide discretion as to exactly what order they may make so that, for example, it may in a particular case be within their discretion to award a party anything between one half and two-thirds of the assets.)

So, appealing is one way to reopen a divorce settlement, albeit unusual. What of the other ways?

Issues with material before the court

The second way of reopening a divorce settlement involves having the financial remedies order set aside.

This relates not to the judge making an error, but rather the situation where there is some issue with the material that was before the court when the order was made.

There are various types of such issues.

One type of issue is where there has been fraud on the part of one party, for example where that party presented forged documents to the court. Where fraud is established it is highly likely that the order will be set aside, unless the perpetrator of the fraud can show that at the time the order was made the fraud would not have influenced a reasonable person.

Another, rather more common, type of issue is where there has been non-disclosure by one party, so that the court did not have all of the information it should have had when it made the decision. If the non-disclosure had been innocent and would not have made a significant difference to the outcome of the case then the court may decline to set aside the order. But if the non-disclosure had been on purpose and would have made a significant difference then it is likely that the order will be set aside, so that the court can reconsider the settlement.

A third type of issue is where there has been undue influence. This can happen, for example, where one party has sought to influence the other to agree to a settlement that is unfavourable to them, or to agree not to pursue a claim against certain assets.

Another example is where there has been a mistake at the hearing when the order was made, for example a mistake as to the value of an asset. Obviously, the mistake will have to be proved, and will have to be so significant that it was likely to have altered the order that the court made.

Getting an order set aside for one of these reasons is again quite unusual, as the judge making the original decision is obviously likely to have been aware of any fraud or non-disclosure, and will have guarded against any undue influence or mistake.

Subsequent events

The final category of cases where a financial remedies order may be reopened is where subsequent events have changed a fundamental aspect of the order.

Once again, there are strict rules about this, and the circumstances in which an order may be set aside because of subsequent events are quite limited.

An application to set aside an order because of subsequent events is called a ‘Barder application’, after a 1988 House of Lords case by that name, and the subsequent event is known as a ‘Barder event’.

If a Barder event is proved, then the court will allow the party making the application to appeal against the order out of time.

In the Barder case the House of Lords set out four conditions that would have to be satisfied before the court would grant permission to appeal out of time:

1. That the new events that occurred since the making of the order invalidate the basis, or fundamental assumption, from which the order was made, so that, if leave to appeal out of time were to be given, the appeal would be certain, or very likely, to succeed.

2. That the new events have occurred within a relatively short time of the order having been made.

3. That the application for leave to appeal out of time should be made reasonably promptly in the circumstances of the case.

4. That the grant of leave to appeal out of time should not prejudice third parties who have acquired, in good faith and for valuable consideration, interests in property which is the subject matter of the relevant order (for example where the matrimonial home was sold under the terms of the order).

So what type of events have satisfied these conditions?

One example occurred in the Barder case itself.

In the case the husband and wife agreed a settlement whereby the husband was to transfer his interest in the former matrimonial home to the wife, who would be looking after the parties’ two children, in full and final settlement. The settlement was incorporated into a consent court order.

Tragically, only five weeks after the order was made, and before the transfer had been put into effect, the wife killed the children and then committed suicide. In her will, she left her estate to her mother. Her mother then sought to enforce the order, and the husband sought to appeal against the order out of time.

The House of Lords held that these exceptional facts did fulfil the four conditions above. In particular, the fundamental assumption behind the order was that the wife and the two children would, for years to come, require a suitable home in which to reside. That assumption was totally invalidated by the deaths of the children and the wife within five weeks of the order being made, and accordingly the appeal was allowed.

Since 1988 there have been other successful Barder appeals, arguing various Barder events, such as changes in the value of assets, cohabitation or remarriage of a party, and even changes in the law. However the courts, mindful of the principle of finality, have generally been reluctant to grant them, with the result that relatively few have been successful.

Can your divorce settlement be reopened?

As we have seen, divorce settlements can be reopened, but only in very limited circumstances.

If you want to have divorce settlements reopened it is essential that you first seek expert legal advice. Attempting to have divorce settlements reopened can be very expensive, often with little or no prospect of success.

We can provide you with the advice you require. To speak to one of our specialist lawyers complete the form on this page.