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Impact on Financial Matters Caused by Coronavirus

Impact on Financial Matters Caused by Coronavirus

Almost everyone will be feeling the effects of the coronavirus outbreak in some way and this is likely to include those parties trying to resolve their financial matters on divorce. The impact likely to be felt will include both in relation to the procedure of the Courts and the financial considerations that will need to be taken into account in relation to any settlement.

Court Procedure

Whilst there do not appear to be any imminent plans to close the Family Courts, temporary changes are being introduced as to the way matters are dealt with in light of the coronavirus outbreak. Such changes include:

  • Hearings at Court should be carried out by telephone or Skype where possible, rather than by parties attending in person.
  • Parties are being encouraged to use the accelerated procedure for First Appointments whereby directions are agreed by the parties and approved by the Court on the papers without the need for a hearing.
  • Parties are being encouraged to arrange their Financial Dispute Resolution hearings privately with such hearings being carried out remotely rather than by the parties attending in person.
  • Physical hearings with parties in attendance should only take place where it is absolutely unavoidable.
  • The physical lodging and handling of documents should be avoided with such documents to be emailed to the Court instead, and ebundles used where possible.
  • Judges are to endeavour to do as much work as possible from home.

Financial Considerations

The coronavirus outbreak has significantly impacted the global economy and financial markets in numerous countries. Whilst it is hoped that the global economy will recover there is no certainty as to how long this will take. The financial effects caused by the coronavirus could significantly impact parties’ finances and must, therefore, be taken into account in any financial settlement or financial order. Matters that may require consideration include:

  • Where assets have previously been valued (particularly if assets are held overseas), it may be necessary to consider revaluing them in light of the financial impact of the coronavirus outbreak. Such assets would include businesses, investments and pensions, whose value could have been significantly affected by the economic downturn.
  • Parties will, however, need to be careful in finalising a settlement where assets have recently been depleted or are likely to be depleted as a result of the effects of the coronavirus. It may be that the financial impact of the virus passes fairly swiftly and the assets return to their original value in the near future, or it may be that the assets take a very long time or never return to their former value. Such uncertainty can make negotiations difficult and it is worth noting that it is very rare to be able to re-open a settlement once it has been approved, even when there has been a sudden and dramatic change in the value of the assets.
  • Where a party’s income has been temporarily affected by the coronavirus outbreak this may need to be taken into account for the purpose of interim maintenance and/or a financial settlement.
  • Given the current uncertainty referred to above, parties may even be considering whether now is, in fact, the best time to resolve their financial matters or whether matters should be placed on hold for the time being.
  • If a party’s financial circumstances have been significantly impacted by the sudden economic downturn and a financial settlement or financial order has recently been made, immediate advice should be sought on the possibility of setting aside or appealing the Order, although this can be extremely difficult to do based on the current law.

The recent changes to the Court procedure, as well as the uncertainty and instability of the current economic climate, mean that expert advice from a family solicitor is likely to be particularly beneficial for parties seeking to resolve their financial matters on divorce at the current time.

 

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