The impact of the coronavirus crisis on business valuations in divorce settlements
The Family Courts have adapted quickly to the challenges presented by lockdown. Divorce petitions are still being processed and hearings are taking place remotely wherever appropriate. Parties are also being encouraged to make more use of private hearings and alternative dispute methods such as mediation and arbitration. All of these measures mean that couples who want to divorce, or continue with existing proceedings, can do so. But should they?
It is best practice to discuss, and ideally agree, a divorce petition before it is filed. This helps avoid the unnecessary cost and stress of a divorce being defended by the recipient spouse. If couples do not feel able to do this with their soon-to-be-ex they can at least prepare their petition so they are in a position to move ahead when the time is right.
Anyone filing on the basis of the other party’s unreasonable behaviour will want to consider the details of that behaviour particularly carefully now. It is not difficult to imagine a recipient spouse, and perhaps even a judge, taking issue with a petition which is based solely on behaviour during the lockdown period, a time when few of us have been at our best, especially if it is filed shortly after any significant lift on restrictions.
Divorcing spouses can prepare by collecting financial information whilst lockdown continues: bank statements can be sought, property documents collated and outgoings analysed. They may, however, face difficulties when it comes to valuing key assets such as businesses, property and pensions.
Some people will have a divorce settlement which is now impossible or unfair to implement. In exceptional circumstances parties can set aside an order and, more commonly, orders can be varied if the situation demands it. Those who think they are in this position should take specialist family law advice and consider all options available to them for finding a solution, from mediation and private hearings to court proceedings and arbitration.
The road ahead is far from clear and some people will have good reasons for pressing pause on their divorce. For those who want to move forward, though, creative solutions can be found.
This blog was first published in eprivateclient in May 2020 - How is COVID-19 affecting divorcing couples? (subscription required).
You may be interested in reading our other blogs in this series about changes in financial circumstances as a result of the coronavirus crisis and its impact on divorce settlements and maintenance:
If you concerned about the impacts of COVID-19 on your divorce settlement and you would like advice on how to best proceed, please contact a member of our team.
Please note that the general guidance provided within this blog is accurate at the time of writing (22 May 2020). It does not constitute legal advice and specialist advice should be sought in individual circumstances.
Cady Pearce is a Senior Associate in the family and divorce team. She advises on a range of private family matters involving both finances and children. Cady has experience of complex financial cases and often deals with cases involving overseas assets and unusual issues. She previously worked in the financial litigation team at Magic Circle law firm and is familiar with complicated financial structures. She has a particular experience in advising City professionals and businesspeople.
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