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'How Do I Revisit My Divorce Settlement?' by Tony Roe.
9 April 2009 :: Newbury Business Today

Divorce lawyers are seeing increasing numbers of business clients who want to revisit their divorce settlements due to the current economic climate. This could be being spurred on by a few high profile cases which have hit the headlines.

The media reported that one buy-to-let entrepreneur, with £4.7m still to pay of the lump sum awarded to his wife over the next three years, wanted to reopen his case because his worth had plummeted. Meanwhile, a City fund manager, Bryan Myerson, wants back some of his former wife’s £9.5 million divorce settlement. Mr Myerson retained stocks in Principle Capital Holdings, where he worked, but was "hit by the earthquake of the global financial crisis”. With another £2.5m still to pay, the husband is arguing that his wife has 105% of the assets. The Court of Appeal has yet to give judgment on the appeal.

So, if I don’t like my divorce settlement, can I simply ask the court to change it? No. In every case, the court has a duty to consider whether or not there should be ‘a clean break’, In other words, a dismissal of each spouse’s claims against the other. Orders dividing the matrimonial pot are intended to be final. They generally provide for no further claims, certainly as far as capital and property  are concerned. Maintenance is a different issue.

To appeal or set aside a matrimonial finance order is not a simple process. Time limits are short.

What if I agreed to the order in the first place, can I revisit it? This is possible, whether by appealing the order, setting it aside or applying for a rehearing, but the grounds are narrowly defined. Examples may be where a “consent order” has been based on fraud, misrepresentation or mistake. Given that full and frank financial disclosure is key to what order is made, if a significant financial detail is withheld, this may enable the matter to be brought back to court.

In a recent case, a wife went back to court to set aside the matrimonial settlement saying that she would not have agreed to the order if she had known of the husband’s potential change in employment status and increased salary. The husband had not told his wife, or the court, that he was in negotiations with another firm for a possible move and an increase in salary. On her appeal, the judge found that this Goldman Sachs financier had failed to disclose relevant information but held that, even if it had been revealed, it would have made no difference. By the time the wife had taken this decision to the Court of Appeal, the matter settled as the husband had, in the words of his barrister, “received dispiriting news about his income, which relates to his bonus."

A delay in taking a matter back to court can be fatal to its chances of success. Where a former spouse argues that a new event has undermined the basis of the order, it is imperative to act quickly. These “Barder events” are named after a tragic House of Lords case where the home was transferred to the wife who five weeks later committed suicide and killed the children.

Spousal maintenance paid on an ongoing basis can be revisited, to be increased or decreased. It can also be paid as a lump sum but, whilst ongoing periodical payments end automatically on the recipient’s remarriage or death, there is never a refund of capitalised maintenance. Once lump sum maintenance is paid, there is no come back.

These days, spousal maintenance orders are inflation-proofed by being linked to the Retail Prices’ Index. With the RPI falling to 0% in March 2009, this may no longer be any comfort. Either former spouse can apply to vary such an order up or down, particularly if circumstances have changed. This can trigger capitalisation, assuming that there is enough money around, to include an order against a property or a pension scheme or a lump sum.

The law provides that a lump sum order paid by instalments can be varied in just the same way as a spousal maintenance order. This is often overlooked by divorcing couples but is one of the applications Mr Myerson made to the Court of Appeal.

The flow of former spouses looking to have settlements reconsidered is likely to continue during this downturn in the economy. However, specialist legal advice is a must to navigate the pitfalls and time limits properly.

Footnote: Since this article was written for publication, the Court of Appeal has given judgment against Mr Myerson.

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