Lockdown and divorce – the new normal 

Laura Guillon, Hall Brown
X The Business Desk

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By Laura Guillon, Senior Associate at Hall Brown

The way that we live and work has changed radically over the course of the last 12 months.

As the world gradually emerges from lockdown, some of those changes will become permanent for our homes and businesses: a shift now widely referred to as ‘the new normal.’

We have already noticed how those very different commercial and domestic circumstances might impact on divorce.

Now, what I’m about to say next might sound strange to a casual observer – especially as it comes from a family lawyer who has dealt with many hundreds of marital breakdowns over the course of her career so far – but there is never a good time to divorce.

Even short-lived marriages were generally entered into for a good and romantic reason. I don’t believe that many couples exchange vows with the expectation of being added to the divorce statistics.

There were, of course, some who forecast that being forced to live and work together at home would immediately result in a blizzard of divorce petitions.

Figures produced by the Ministry of Justice showed instead that the number of financial remedy applications issued between April and June last year – the formal start of the process of dividing a couple’s assets – was down by almost one-third on the same period in 2019.

During the first phase of lockdown, the courts, couples and lawyers like myself needed to come to terms with what it all meant.

As the months have passed, though, the realisation has dawned that Covid-19 is going to continue to affect how couples divorce for some time to come.

Whilst at the beginning, courts may have been even more cautious than normal about the valuations of family businesses, the fact that the economic impact of the pandemic is not a short-term blip has allowed everyone to proceed with greater certainty.

Even so, the last 12 months have seen the finances of many individuals and enterprises badly dented.

That already seems to have reversed a trend in the terms on which spouses separate.

Courts have been increasingly keen in recent years to see husbands and wives achieve a clean break rather than the indefinite provision of maintenance or ‘periodical payments’ as they’re known.

The number of such arrangements had fallen by six per cent in the two years before lockdown, while clean break orders are five per cent more frequent than in 2014.

Nevertheless, the courts have already recognised that a clean break may not be possible for some individuals for some time to come.

There are those businessmen and women who have such confidence about their firm’s ability to bounce back that they are willing to hand over the bulk of their current liquidity to avoid any future claims.

After all, as the Governor of the Bank of England, Andrew Bailey, insisted recently, there is ‘light at the end of the tunnel’ despite the challenges to recovery which remain.

The pattern and pace of divorce is likely to follow that of the general economy just as it did after the global recession of 2008.

Although that might tempt some spouses to delay discussions on finances in the hope that their other half’s fortunes may rebound in the near future, I would suggest that’s a bad idea.

No-one can predict the future with any real accuracy, especially with health experts believing that a third wave of the coronavirus pandemic is on the horizon.

The valuations which form the critical part of a divorce settlement are simply a snapshot of a couple’s financial state now when their marriage is at an end.

Dragging one’s heels in the hope of securing even a marginally better deal carries no guarantees and risks increasing tensions with your former partner and potentially increased costs.

 

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