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Matt Foster

Charles Russell Speechlys, London

charlesrussellspeechlys.com

 

Since late March 2020, the UK has been subject to a government-imposed lockdown in an attempt to contain the spread of Covid-19. This has raised fresh legal questions for family law practitioners ranging from financial matters to arrangements for children. The pandemic has also had an impact on access to justice. The English legal system soldiers on behind closed doors, and while remote hearings are becoming increasingly commonplace, the court remains under sustained pressure as it contends with limited resources.

Family law jurisprudence

Child arrangements

The lockdown was a cause of immediate concern for separated parents. Court orders governing child arrangements remain in place and parents are still expected to adhere to them. The UK government (belatedly, and after some initial confusion) addressed child arrangements as part of its official guidance, reassuring parents that children under 18 could be moved between their parents’ homes. However further guidance issued by the court makes it clear that just because the government says children can be moved it does not mean they must. The decision should be made after a sensible assessment of the circumstances, including the health of the child and the risk posed to any vulnerable person in either household.

While this is a sensible, pragmatic approach, it is arguably at odds with the overarching principle governing the law on children in England and Wales which states that: ‘the child’s welfare should be the court’s paramount consideration’.^[1]In theory, the outcome that is best for the child is the one that should be taken irrespective of the impact on any third parties such as the increased infection risk for vulnerable members of their household. However, in practice, the vast majority of practitioners seem to be following this pragmatic approach and it is expected that most judges would do the same if faced with such a choice.

Acting in agreement, parents can temporarily vary on order to work for their particular circumstances. If parents cannot agree on a variation, either can apply to the court. Unfortunately, in the current circumstances, it is unlikely that a substantive hearing will be listed in time to be of any real recourse, on which see below. The court (rightly) continues to prioritise cases concerning public children law, typically care proceedings where the child is at risk of serious harm, meaning it could be several months before an order can be varied formally. This delay inevitably exposes the system to abuse, with the primary carer being in a position to dictate child arrangements or withhold their consent in the knowledge that recourse through the court is unlikely to be effective in the short term.

Finances

Reaching a resolution

Constantly shifting, and in many cases collapsing, asset values have inevitably made it much more difficult for parties to reach or the court to determine a fair and workable financial settlement. However, economic change always benefits one party and the current situation will undoubtedly present an opportunity for many wealthier parties to ‘cash out’ on the basis of low asset valuations.

Liquidity is nearly always an issue for wealthy clients, a problem now exacerbated as businesses suffer cash flow problems and the property market stalls. In more complex cases, innovative solutions are usually required if a settlement is to be reached, often contingent on the sale of certain assets or the extraction of cash from corporate structures. In the current climate there may be little room for such creativity which in turn may mean that for some cases there is little prospect of a negotiated settlement at all.

While settling privately is often encouraged as it allows clients to avoid the costs, delays and stresses associated with the court process, parties should be wary of committing to anything while the global economic climate remains so uncertain. In English family law,^[2]once the parties agree to a settlement in principle it is very hard for either party to renege on that agreement. Clients must be aware that the court is likely to hold them to an agreement, even one that is reached amid economic uncertainty.

Reopening financial orders

Many are coming to terms with job losses, shrinking investment portfolios and collapsing businesses. Amid the uncertainty, meeting the requirements of an existing financial order may no longer be possible. Under English law there is the option (albeit in very rare circumstances) to apply to the court to set aside a financial order on the basis of an unforeseen event that invalidates the basis of the original order. Such events are called ‘Barder’ events after the case of the same name.^[3]In that case an order was made (by agreement) that the husband transfer the family home to the wife. Shortly after the order was made, the wife killed the children before taking her own life. Her estate sought enforcement of the order while the husband appealed to set aside the order. The husband was successful.

While the Covid-19 pandemic is arguably unforeseen and unforeseeable, distinguishable from the 2008 global financial crisis even, this does not mean that everyone who has suffered a financial loss can make a Barder application as the jurisdiction is very limited. The event must have taken place shortly after the date of the original order (normally within 12 months) and must be extreme to the point that it invalidates the very basis on which the order was made. Needless to say, the Barder conditions are rigorously applied and while a number ofapplications are likely to have already been made to the court, there is yet to be a reported case applying this test in the context of Covid-19.

Variation of maintenance

If a Barder application is unlikely to be successful, a concerned party can still apply for a variation of spousal maintenance; however, generally speaking, capital provision in financial orders cannot be varied. Even before Covid-19, applications by the paying party for downward variation of spousal maintenance were on the increase and they will no doubt surge as a result of the pandemic. There has been a move in recent years away from ‘joint lives’ maintenance (ie, an order for spousal maintenance until the death of either party or the remarriage of the receiving party), with the courts favouring limited terms and a ‘clean break’ if possible.

Child maintenance is also emerging as a casualty of the coronavirus. Normally dealt with by a government organisation called the Child Maintenance Service (except in certain circumstances, such as high income cases), child maintenance assessments are variable in line with the income of the paying party meaning an application can be made to have child maintenance reassessed to account for any reduction in income. If the court has made an order for child maintenance (typically only in ‘big money’ cases), applications can also be made to vary any such order.

Access to justice

Court hearings

Despite many assuming otherwise, the courts have continued to function despite the pandemic, albeit with significant delays as the system adjusts to operating at a vastly reduced capacity. Remote hearings are being conducted, where appropriate, via telephone or video conferencing and with varying levels of success. Often this is the approach taken for directions hearings. However in March, the Court of Protection heard a complex trial via Skype, involving over ten witnesses, several lawyers, three experts and two journalists.

Unfortunately, not all cases are being handled with such efficiency. Anecdotally, the majority of non-urgent trials are being adjourned, especially those which require witness evidence, and usually such a delay is likely to prejudice one party more than another. However, a key tenet of the English legal process is for a judge to be able to assess witness character and oral evidence – a task which becomes all the more challenging where hearings are conducted via video link, although as indicated above, this is not impossible.

Where hearings do proceed and decisions are made there will be increased scope for a party to appeal the decision of the judge due to the challenging circumstances and a marked increase in appeals is expected as more remote hearings take place. Indeed, the Court of Appeal has heard a number of cases recently in which the grounds of appeal challenged the way the trial judge had conducted the case remotely.^[4]

Alternative Dispute Resolution (ADR)

The significant court backlog has prompted a move towards ADR, such as mediation. With the ongoing uncertainty surrounding the court process, arbitration in particular is an attractive option for clients. It is almost always quicker and offers a bespoke service to parties, allowing them to highlight from the outset the particular issues they want determined. Furthermore, clients can be sure of an expert tribunal that is fully briefed and has had the time to consider the issues in detail.

Children matters

Although not appropriate for public children law cases, the arbitration process is well suited to the majority of private children law disputes. Since 6 April 2020, a significant extension in scope means that cases involving the temporary and permanent relocation of children to certain foreign jurisdictions can now be dealt with in arbitration. This extension in scope could not have come at a more opportune moment and offers parents a chance to bypass lengthy court delays and obtain quick, conclusive decisions about cross-jurisdictional arrangements for their child.

Financial matters

Since the UK lockdown began, there appears to have been a shift towards private Financial Dispute Resolution (FDR) hearings, an option which has long been the preferred choice for many practitioners dealing with wealthier clients. FDRs are a unique part of the English family law system, broadly analogous to judge-led mediation. A judge hears submissions from each party and gives a non-binding indication (as opposed to a binding judgment) as to the likely outcome if the matter proceeded to trial. The idea is that the indication will focus the minds of the parties and will encourage settlement before the costs of a trial are actually incurred. All substantive aspects of the FDR are without prejudice and attract a unique form of legal privilege, meaning they cannot be referred to later in the proceedings and the FDR judge is precluded from any further involvement in the case. This provides the parties with a valuable opportunity to make genuine attempts to settle without the fear that any concessions will later be used against them.

While normally heard as part of the court proceedings, FDRs can also take place privately by hiring an experienced family law practitioner to act as the FDR judge. It is expected that a wider range of practitioners will now turn to private FDRs to assist their clients in reaching a settlement outside of court, alongside other forms of ADR such as mediation and arbitration.

Looking forward

The repercussions of Covid-19 will long be felt within English family law. The backlog of hearings may take well over a year to clear and many clients will have to confront the reality of irredeemable financial losses and the knock-on effect this will have on their ability to meet their legal obligations.

Looking more positively to a post-pandemic world, it seems we can expect more remote hearings, especially for directions hearings, as the court becomes increasingly adept at facilitating the use of video and audio platforms. The lifting of the lockdown will no doubt give rise to a higher demand for nuptial agreements as couples rush to tie the knot following the postponement of many weddings. Applications for upward variations in maintenance are currently quite rare, but if the economy improves markedly this may be another thing that more clients consider.

In any event, the transition back to ‘normality’ is likely to bring only more change in the kind of issues faced by practitioners.

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