Unexpected Death Justifies Divorce Settlement Change

One of the things that the family court seeks to do when divorce settlements are being made is to achieve finality. Where a settlement has been agreed by the court, it is normally difficult to vary it unless a significant and unpredictable event happens within a reasonable period after it was reached which undermines the reasoning on which it was based. Such a circumstance is called a ‘Barder event’, named after the leading case dealing with this sort of occurrence.

In a recent case, a very wealthy couple, who lived on a country estate, separated. The final settlement provided that the wife (who was considerably more wealthy than her husband) would pay her husband two lump sums and that neither party would have a claim against the other when this had been done. The first payment (£8.67 million) was to be made within 14 days of the court hearing and the second within 14 days of the man’s mother vacating the house she occupied on the estate.

The first payment was made and the man transferred more than £1.6 million to his mother’s solicitors to enable her to purchase a house. However, before the second tranche was payable, he committed suicide, leaving his entire estate to his three adult brothers.

The ex-wife went to court to have the order varied, arguing that her ex-husband’s death could not have been predicted and that the settlement would have been significantly different had his imminent demise been known about.

His brothers argued that the settlement was not based on their late brother’s future needs but on his entitlement to a share of the estate, and should thus remain unchanged.

The family court accepted that the event could not have been foreseen and that the husband’s award was based on his expected future needs, not on his entitlement to a share of the family wealth.

The judge then had to ask the question, “If I had been sitting in court in November 2014, knowing that the Husband was to die in less than a month, what would my award have been?”

Noting that the husband had assets of his own exceeding £2 million, the judge concluded that the appropriate settlement would have been £5 million. The second tranche of the settlement was therefore discharged and the man’s executors were ordered to repay £3.67 million from his estate to his former wife.

While this case involved a ‘super rich’ family, the principles are of general application. Contact our family team for advice on the financial and other aspects of relationship break-up.