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Changes in Family Law due to Covid

The drastic measures ushered in as a result of the Covid pandemic have affected all aspects of our way of life. This includes the practical changes to the way the family justice system operates, which are unprecedented in such a short space of time. Most family Court hearings are now by telephone or video link and client meetings are now by video link, saving clients the need to travel.

The dramatic and sudden cessation of economic activity has also had a profound impact on some asset valuations, particularly business and property. Also the massive volatility in stock prices has caused the Courts to re think how assets are divided fairly on divorce. Last year Judges accepted that investments had been devalued as a result of the pandemic and so should not be taken into account as an asset and also applied a 10% discount to the trading value of a business to reflect the likely Covid disruption.

Unemployment has also risen dramatically and income from investments that may have been relied on may no longer be available with many Companies withholding dividends. Courts have had to take this into account when considering the term of any Maintenance Order as well as the amount to be paid.

Courts have also taken into account the ability of parties to raise funds necessary to discharge their liabilities, as the strain on income has caused lenders to be much more cautious. Last year a court accepted that a husband’s commission income would be much reduced due to Covid and therefore gave him a year to raise funds, rather than a period of months, as would have been usual.

There will inevitably be more economic uncertainty to come and the issue of valuations and employment will no doubt continue to pose challenges for both parties and the Courts.

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