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You may be in a situation where you have previously agreed on a financial settlement with your ex-spouse / civil partner, which has formed part of a consent order or, you have been in proceedings, and there is a final order which determines what should happen with your finances. Where orders cannot be implemented effectively, you may need to make an application to vary that order.
Orders that can be varied are defined in section 31 Matrimonial Causes Act 1973 (MCA 1973). With very limited exceptions, it is mainly only income and maintenance orders that can be varied. Orders for capital payments cannot be varied. However, lump-sum orders by instalments can, in some circumstances, be varied.
What orders can be varied?
The following orders can be varied:
- Maintenance pending suit. These are interim maintenance/periodical payments;
- Periodical payments and secured periodical payments, subject to section 28(1A) of the MCA 1973, which provides for a non-extendable term of the periodical payments;
- Lump sums payable by instalments.
- Provision for children. This includes periodical payments, secured periodical payments or a lump sum payment by instalments, for the benefit of any child or children;
- Settlement orders. This is an order for the settlement of property for the benefit of a spouse or child;
- Sale of property. This is an order for the sale of a property within an order for secured periodical payments, payment of a lump sum or property adjustment.
- Pension sharing order. A pension sharing order can only be varied if it was made before Decree Absolute and the application is made before the pension sharing order takes effect.
What orders cannot be varied?
- An order for a lump sum or sums under section 23 of the MCA 1973, not payable by instalments;
- Property adjustment orders (except if part of a settlement order above); and
- A pension sharing order after the decree has been made absolute.
The words “Liberty or permission to apply” within an order does not give one party permission to vary the order if prohibited by section 31 MCA 1973.
Sometimes, it is not clear what the original order intended. On any application, the court will consider all material facts to try and ascertain what the original Judge was intending or, if it was an agreement by consent, what the parties intended. This will likely mean obtaining copies of previous files and looking at the details in open and without prejudice correspondence. If the case was before the court at the time, a copy of the final court bundle would be a good starting point for any solicitor looking into the prospects of success of a variation application.
The family court has wide discretion when dealing with a variation application. The first consideration is always the welfare of any children. Further, the court will look closely at whether there has been any change in circumstances. Unless there has been a significant change in circumstance, it can be difficult to establish grounds for a variation of the order.
The person applying to vary the order must provide sufficient evidence that supports their case. This is often by way of a narrative statement (and potentially exhibits), which will be attached to the application itself.
There is a duty on the court to consider a clean break and whether a clean break is now appropriate. This is particularly relevant to cases where someone is applying to vary periodical payments.
The court has a duty to apply the overriding objective of fairness. The court must deal with matters proportionately. For example, one case may need a complete review, whereas another, only a light touch review.
The court will consider the decreasing income of one party, the increasing income of the other, and any increase or decrease in responsibilities.
The court will also examine whether there has been any financial mismanagement since the original order was made. For example, if one party exhausts their capital, the other party should not be expected to meet the needs created by that financial mismanagement.
Any side letters sent at the time, such as where one party agrees not to apply to extend the term of a periodical payments order, are relevant.
Effect of the Covid-19 pandemic
Due to financial hardship caused by the pandemic, we are seeing increasing numbers of variation applications.
We have dealt with several cases recently where the lump sums payable to ex-spouses are not possible, as the marital home (and sometimes, investment properties) have not sold for as much as envisaged at final hearing. This is a change in circumstances that would warrant an application to vary.
Of course, there are a few cases where the pandemic has positively affected one party, such as a dramatic increase in the value of the business or their income (for example, a PPE supplier). This could be classified as a “Barder” event, which is an unexpected event that may invalidate the financial remedy order altogether. In such a case, consideration needs to be given to have the original order set aside:
In short, where an event has occurred since the order was made, the following criteria must be met in order to apply:
- the new event which had occurred invalidated the basis for the order, and if appealed ‘in time’, that appeal would be certain, or very likely, to succeed;
- the new event happened within a relatively short period of time of the order being made;
- the application to appeal out of time had been made promptly by the person seeking to reopen the order; and
- granting leave to appeal would not prejudice innocent third parties if the outcome was changed.
Here to help
If you require any advice regarding the variation of a financial remedy order, you can contact one of our specialist Family Law Team.
