Unsurprisingly, the coronavirus crisis has led to an increase in the number of enquiries to solicitors from concerned clients, in relation to financial and children matters.
The pandemic has had a hugely negative impact on the economy. Businesses are struggling to survive and many are likely to fail, despite government financial assistance. Many retirees have seen their investment income reduced and those hoping to sell or purchase properties are unsure how to proceed, assuming they are even in a position to do so. The very real possibility of property prices falling may have a huge detrimental impact on separating couples in the throes of trying to negotiate a financial settlement.
Many employees lucky enough to be furloughed, rather than made redundant, may struggle on a reduced income to pay spousal and/or child maintenance pursuant to existing court orders or Child Maintenance Service (CMS) assessments.
Similarly, many recipients of maintenance (usually wives and mothers) will struggle to meet their monthly outgoings from reduced maintenance payments.
So what can the parties do? If the payer of maintenance has a reduced income, he or she should seek to agree a reduction amiably with their ex-partner, perhaps with an agreement to pay off the arrears by installments at a later date. If this is not possible, he (or she) may approach the CMS to assist.
If maintenance is payable pursuant to a court order less than 12 months old, the payer must apply to the court for a downward variation and a judge will determine the issue.
Similarly, if the payee of maintenance (usually a wife or mother) receives a reduced amount of spousal and/or child maintenance, they should seek to resolve matters amicably and if this fails, they will need to apply to the court (or the CMS) to enforce the order, including the arrears. A judge has the discretion to write off arrears if it is appropriate and fair to do so.
Clients have also asked if the current crisis should be a reason to seek to overturn a recently agreed financial settlement, for example, as a result of a significant decrease in the value of property or shareholdings. Some readers may recall the well publicised case of Mr and Mrs Myerson shortly after the 2008 financial crisis. The husband sought to overturn the court order because the value of his shareholding decreased significantly from several millions to approximately £500,000 whilst the wife’s share of the matrimonial assets (cash and property) remained protected. The court dismissed his application because “the natural processes of price fluctuation whether in houses, shares or any other property, and however dramatic, do not satisfy…” the relevant test to successfully overturn a financial order. Whether or not the decrease in assets, as a result of the coronavirus crisis is sufficient to lead to an unhappy spouse successfully overturning an agreement or court order remains to be seen. No doubt they will argue that such extreme unforeseen circumstances are different from the normal risk associated with “natural price fluctuation”.
The matrimonial home (and sometimes investment/holiday properties) is often the most valuable asset in financial proceedings and it is not unusual for this to be sold as part of the financial settlement, to allow cash to be made available to both spouses to purchase alternative properties. The uncertainty over house prices and indeed the ability to actually proceed with the transaction means that parties can no longer assume that the funds will be made available to them to move forward with their lives.
However, bearing in mind the financial and emotional cost of court proceedings, the parties may wish to consider mediation or seek to resolve matters with the assistance of collaboratively trained solicitors.
The Coronavirus has led to uncertainty about a child who is subject to a Child Arrangements Order (formerly called a contact order) visiting the parent with whom he or she does not normally reside. Although children (and adults) are not allowed to be outside their home for any purpose other than for the well publicised exceptions, the Government has issued guidance to address this discrete issue. “Where parents do not live in the same household, children under 18 can be moved between their parents’ homes”. However, although this is an exception, it does not mean that contact must occur. Both parents should decide if it is appropriate for the child to visit the other parent’s home.
Sadly, some parents with whom the child resides have used the current lockdown to prevent contact taking place and therefore, on 24 March 2020, the Rt. Hon. Sir Andrew McFarlane, President of the Family Division and Head of Family Justice issued “guidance on compliance with family court child arrangements orders”.
According to the guidance, where parents acting in agreement exercise their parental responsibility to conclude that the arrangements set out in a Child Arrangements Order should be temporarily varied they are free to do so. However, any agreed variation should be recorded in writing.
When parents cannot agree that the child will spend time with the other parent, the courts will expect alternative arrangements to be made to establish and maintain regular contact between the child and the other parent such as contact via skype, zoom, WhatsApp and so on.
If the parents cannot agree alternative arrangements, they should seek legal advice as to how they may be able to agree matters with or without the need for a court application. As always, good communication is key to resolving the issue.
Many vulnerable people in the household are at risk of physical and emotional abuse if they are unable to leave the property due to the current lockdown. However, being at risk of domestic abuse is an exception to having to stay at home. Refuges remain open and the police will provide support to all individuals who are being abused.
This article first appeared in Wealth Briefing https://www.wealthbriefing.com/html/article.php?id=187258#.Xr0GkERKjIV