Barder, Barder, Blah, Blah

If you are currently dealing with financial matters arising from a divorce or separation and/or you have recently obtained a Court Order, then you may or may not be familiar with the name of ‘Barder’.

We are all, unfortunately, a little too familiar with the terms ‘pandemic’ and ‘COVID-19’ - but what does this have to do with family law matters, and why has the name of Barder become associated with it?

If you have instructed a specialist family law solicitor, then you should have been advised that to achieve finality of your financial matters on divorce or separation, a court order will need to be obtained. There are some situations where a court order is capable of being varied - for example, if it includes maintenance payments to the other person - but the main aspects of the court order that deal with capital i.e. payment of a lump sum or property transfer are usually not variable.

That is, however, unless the court considers that there have been exceptional circumstances that mean the order will need to be reviewed and, if those circumstances make the order unfair on either party, then it may be set aside.

Examples of this include:

• Where one party has failed to disclose assets in their name, and if they had been disclosed before the order was made, it would have altered the terms of the agreement reached, or the judge’s decision;
• Where a significant mistake has been made; or
• An unforeseen/unforeseeable event has occurred since the order was made which undermines it – this is where Barder comes in.

Barder Event

To understand what the court considers to be an unforeseen or unforeseeable event, we need to look at the case of Barder v Barder [1988]. In this case the parties reached an agreement, and the court made a consent order, which provided for the family home to be transferred to the wife in order to meet her needs and the needs of the parties’ two children. Tragically, five weeks after the order was made, the wife killed both children and then herself.

As a result, the husband appealed to the court for the order in relation to the transfer of the family home to be set-aside. The House of Lords (who used to have the final say on cases before the Supreme Court was founded in 2009) found the deaths invalidated the basis of the family home being transferred to the wife, as it was no longer required to meet her needs or the needs of the children.

As the actions of the wife were unforeseeable, the court allowed the husband to challenge the order transferring the family home to the wife – he was successful in this and out of these tragic events came four conditions that need to be satisfied before the Court will consider other ‘Barder Events’.  In brief, they are:

• New events have occurred since the order was made that invalidate the basis, or fundamental presumption, on which it was made;
• The new events occurred within a relatively short time of the order being made;
• The application for permission to appeal the order out of time is made reasonably promptly in the circumstances of the case; and
• Granting leave to appeal out of time would not prejudice third parties who have acquired interests in property which was contained in the order.

Later cases on this point also introduced the principle that the ‘new event’ must be unforeseen / unforeseeable and it must have altered the value of the asset being challenged substantially which impacts the balance or fairness of the order made.

Is COVID -19 unforeseen/unforeseeable?

This issue is being debated by lawyers up and down the country but until the court has provided their input, we simply don’t know. It is worth noting here that it has always been difficult to succeed in arguing that something was a ‘Barder Event’ so the current events are not cut and dry.

The test as to whether an event in unforeseen/unforeseeable is an objective one and suggests something is outside of the norm. So in reality yes, COVID-19 as a virus and the impact it has had globally was not foreseen. But the most important thing to establish is whether the actual financial impact was an unforeseen/unforeseeable event.

When we look back at the judges’ decisions when they had to consider the financial crash of 2008 and whether the impact of that financially was an unforeseen/unforeseeable, it was decided that it wasn’t. The reason given was that the 2008 crash and subsequent financial crisis was part of the ‘natural cycle of price fluctuation’ so not unforeseen. Presumably then, the courts are likely to consider the financial impact of COVID-19 as a similar outcome to the 2008 crash and conclude that it was a foreseeable event.

However, we are now experiencing a second wave of the virus and are soon entering into a second national lockdown. As a result, the financial struggles individuals/companies/independent businesses etc. suffered earlier this year are more than likely to resurface putting them in an even worse position than they were before. So, if the financial impact of the first wave of COVID-19 was not considered an unforeseen event would the second wave be?

The honest answer is that we just don’t know until the Courts are asked to make a decision on this. But, the virus has been unpredictable to date and the long-term impact globally is unknown. so in reality can a decision on this be made until we have some indication about this?

Final thoughts

Practically, if you are in the process of discussing and agreeing financial matters it would be worth considering whether the pandemic to date has impacted the value of assets i.e. companies, pensions and seeking professional guidance on this and the likelihood of recovering any lost value.

If you have agreed an order recently but it has not been approved, or if you have a court order that was made in the last year to 18 months and you feel that the pandemic has made the terms unfair, then I strongly recommend that you seek and obtain specialist advice from a family law solicitor.