Financial settlements on divorce are considered final once approved by the court. However, there are exceptional circumstances where it may be possible to revisit or set aside these final orders.
Understanding when and how this can happen is crucial for anyone who believes their settlement may have been unfair or based on incorrect information. This article explores some of the grounds used to set aside a final financial order on divorce.
Fraud or material non-disclosure
The most common ground for challenging a financial settlement is fraud or fraudulent non-disclosure, typically where one party has deliberately concealed assets, income or other relevant financial information during the divorce proceedings. The court requires both parties to provide full and frank disclosure of their financial circumstances, and any failure to do so can leave a settlement open to challenge and, if successful, the final order will be set aside.
Material non-disclosure doesn’t always require deliberate deception. If one party fails to disclose significant assets or income, even though oversight, this can still provide grounds for setting aside the order. However, the undisclosed information must be substantial enough that it would have materially affected the court’s decision or the settlement reached by the parties. Minor omissions of assets of relatively small value, such as a forgotten savings account with a small balance, are unlikely to succeed as grounds for challenge.
To succeed with this type of claim, an individual must typically be able to demonstrate that the non-disclosure was significant, that they were not aware of the hidden assets at the time, and that the settlement would have been substantially different had the information been available.
Undue influence or duress
Financial settlements can also be set aside where one party was subject to undue influence or duress when agreeing to the terms. This might occur where there has been domestic abuse, emotional manipulation, or where one party has exploited a significant power imbalance to secure an unfair advantage.
Undue influence can be subtle and doesn’t have to involve direct threats. It might include situations where one party has exploited the other’s vulnerability, lack of legal representation, or emotional distress to secure an unreasonably favourable settlement. The court will consider whether the disadvantaged party had independent legal advice and whether they truly understood the implications of the agreement.
Proving duress or undue influence can be challenging, as it often relies on demonstrating the psychological pressure or manipulation that occurred during negotiations. Evidence such as medical records, witness statements, or correspondence can be crucial in establishing these claims.
The Barder Principle
The Barder Principle, established in the landmark case of Barder v Caluori, allows for settlements to be set aside where there has been a dramatic and unforeseen change in circumstances that undermines the fundamental basis of the original order.
For a Barder claim to succeed, several strict criteria must be met. The change in circumstances must have occurred shortly after the order was made, it must have been unforeseeable at the time, and it must fundamentally undermine the basis on which the order was made. Additionally, the application to set aside must be made promptly after the change becomes apparent.
Common examples include the death of one party shortly after the order, a substantial inheritance that was not foreseen at the time of the agreement or order made by the court, or the discovery that assumptions about future earning capacity were fundamentally wrong. However, fluctuations in share prices or property values, or changes in employment circumstances are unlikely to be considered a grounds to set aside an order.
Take advice
Challenging a financial settlement is complex and expensive. The courts set a high bar for these applications, recognising the importance of finality in divorce proceedings.
Before considering such action, it’s essential to take specialist legal advice to assess whether your circumstances meet the necessary criteria and whether the potential benefits justify the costs and risks involved.
Contact our Family Team
The Family team at Bishop & Sewell has a wealth of experience in dealing with family law, finances on divorce, and pre and post-nuptial agreements. Please email family@bishopandsewell.co.uk or contact 020 7631 4141 and ask to speak to our Family Law team
