By Vanessa Lloyd Platt, Lloyd Platt & Co
In the often complex and emotionally charged landscape of divorce proceedings, one crucial aspect that demands meticulous attention is the division of financial assets and liabilities. Amidst the emotional turmoil, it’s imperative to seek expert legal advice to ensure a fair and equitable resolution.
Over the years as a legal practitioner, many clients have asked whether a financial order in divorce is intended to be final or not. Most consent order agreements, approved by the Court are final. However, there are limited circumstances where consent orders can be varied by the Court.
Financial Court Orders and Maintenance
Orders for payment of spousal maintenance or child maintenance can always be varied if the circumstances change for the better or worse. Courts have always accepted that circumstances can change. The party who has been ordered to pay the maintenance can lose their job or receive a reduced salary, or the party receiving the maintenance may commence a job that pays a significant sum. Either of these circumstances can lead to the parties applying for a variation of the maintenance order.
If an application is made to the Court to vary a maintenance order, the Court has a very wide discretion as to how to deal with the application. Section 31.7 of the Matrimonial Causes Act 1973 simply states that the Courts have regard to all the circumstances of the case. The first consideration being given to the welfare of any children under the age of eighteen, and the circumstances of the case will include any change in circumstances since the order was made which have arisen.
Financial Court Orders and Deliberately Increasing Expenditure
In the majority of cases there would have to be a change in circumstances in order for the Court to order a variation of the maintenance order. If, however, a party deliberately chooses to increase their outgoings by, for example, buying a bigger house with a bigger mortgage, then the Court will not consider that that is a change of circumstances that will warrant a variation downwards of their maintenance payments.
Financial Court Orders and Remarriage
Similarly, if a party remarries someone who has significant assets, including income that is going to be utilised towards the family expenditure, then an application can be made for a variation upwards since it can be argued that the party’s income has been freed up by the contribution being made by their new wife or partner.
When to Apply for a Financial Court Order Variation
Applications for variation of financial orders in divorce, particularly those applied for downward variations, still have the effect of stopping the orders temporarily until the Court can determine whether there should be a variation made.
However, if the Court determines that you could have been making payments throughout and have chosen not to do so, hiding behind the application, then they would order the arrears to be made and may order you to pay the legal costs.
The moral of this is that applications for variation should only be made if the circumstances would warrant it.
The ability of the Court to vary other types of orders in a consent order is much more limited. In some circumstances the following orders can be varied:
- An order for the payment of a lump sum, but only if the lump sum is payable by instalments, in which case the Court can consider extending the time for payment.
- An order for sale of the property. If difficulties have arisen because of the market, then the Court can extend the time.
- A Pension sharing order, where it is intended that the pension should be shared between the parties. Only in very rare cases where the application to vary is made before the final order of divorce, formally known as Decree Absolute. Once the decree has been made, the Court can’t vary.
This means that the Court can’t vary lump sum orders except those made by instalments. It cannot vary the order to transfer property, although they might be able to extend the timing, or the vast majority of pension sharing orders.
Further, if there has been a very unforeseen event, known as a Barder event, which undermines the whole basis upon which the order was made, the Court can again set aside the order. These kinds of events are exceedingly rare and do not apply in most cases.
Non-Disclosure or Hiding Assets
Parties should realise that financial orders in divorce made will be final except those in highly exceptional circumstances where the whole order might be set aside, like in cases where it has been demonstrated that there has been fraud, monetary non-disclosure or material non-disclosure by one of the parties during the proceedings.
If this would have made a difference to the settlement at the time it was made or imposed by the Court, the Court can set it aside. If hidden money and property, pensions, savings and investments are discovered after a financial order has been agreed upon, it can lead to several potential consequences:
- Legal Action: The party who concealed assets may face legal consequences for non-disclosure. This could result in court proceedings to revisit the financial settlement.
- Revision of Financial Order: The discovery of hidden assets could prompt a review of the financial order by the court. The court may amend the order to reflect the newly discovered assets, ensuring a fair distribution of assets between the parties involved.
- Financial Penalties: Lack of financial disclosure or hiding assets leading to an unfair financial split during divorce proceedings is generally frowned upon by the court. The party found to have hidden assets may be subject to financial penalties or sanctions imposed by the court.
- Loss of Credibility: Concealing assets can damage the credibility of the party involved, potentially affecting future legal proceedings or negotiations.
- Recovery of Hidden Assets: Depending on the circumstances, the court may order the party who concealed assets to disclose and surrender them as part of the divorce financial settlement.
In summary, the discovery of hidden assets after a financial order has been agreed upon can significantly impact the outcome of divorce proceedings, potentially leading to legal action, revisions of the financial order, financial penalties, and loss of credibility for the party responsible for the non-disclosure.
Tailored Solutions for Every Client
Divorce proceedings can be emotionally taxing, but with the right support and advice, navigating financial agreement matters becomes more manageable. At Lloyd Platt and Co Solicitors, we offer unparalleled expertise in family law and financial matters, guiding clients through the complexities of financial court orders with confidence and clarity.
From the first appointment, all through the consent order process to safeguarding against changes in court orders, we are committed to advocating for our clients’ best interests every step of the way. Choose Lloyd Platt and Co for expert advice and support in your divorce journey.
If you want support and advice any aspect of financial orders in divorce, please fill in our form below, call us on 0208 343 2998 or click to contact our divorce lawyers in London.
