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Barder - The Good, the Bad and the Ugly

Aug 13, 2020, 08:48 AM
Covid, Barder, Pension
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Date : Aug 18, 2020, 09:29 AM
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Much has been written about the case of Barder v Calouori [1988] AC 20 (“Barder”) in the initial stages of the COVID-19 lockdown. It was held out as the means by which maybe, just maybe, it might be possible to reopen a case where a substantive financial order has been made on the basis that the COVID-19 pandemic is an event which has invalidated the basis, or fundamental assumptions of the original financial order.

Barder was a desperately sad case where the wife took her own life thereby invalidating the basis of a consent order by which the husband had agreed to transfer his interest in the family home to her. The threshold is incredibly high in terms of the event being both ‘unforeseen’ and ‘unforeseeable’ and there are additional conditions that must be met before a Barder application will succeed. For example, and in the context of COVID-19, the order must have been made shortly before the outbreak of the pandemic (a matter of months at the most); the application to set it aside must be made promptly and in undoing any transactions, no third party rights  can be unfairly prejudiced. Although the husband’s application in Barder succeeded, there are indeed very few examples of similar successful applications. The good thing about it is that the remedy is there if the conditions can be met and the court will use its discretion to substitute what it believes to be fair provision on the circumstances prevailing.

What is apparent immediately from even a brief review of the cases where a Barder application has been made is the heavy preponderance of those applications that fail. The process for resolving/adjudicating financial claims on divorce can be long and extremely expensive and is often highly damaging of future relations between the parties, especially where they have children. It may feel like an attempt to claw back a highly valued asset, or have a second bite at the cherry, but in all such cases, the prospect of another round of expensive litigation is unwelcome. This is the bad about Barder. Some, indeed many, will be tempted to try and argue that the rule in Barder applies if only to   bring about some sort of reduction/repayment and achieve a more ‘balanced’ outcome. Successful appeals in family cases are rare, still less attempts to reopen orders or settlements on the grounds of some event or happening which is said to invalidate the basis upon which the order was made. It may be no bad thing that the bar is set so high as it should serve to deter all those from applying unless they have the most exceptional combination of factors deserving of revision.

Finally, and at the bottom of the heap, there are the ugly, i.e. those who will try and take advantage without cause or justification of a happening such as the COVID-19 pandemic to try and get out of or reduce an obligation to which they agreed only a short time previously. In those early days and weeks after lockdown, many were struggling to establish home working routines, the efficient operation of IT systems, keeping up with changing rules and procedures such as allowing divorce petitions to be filed online and for court hearings to take place remotely. Some slippage will have occurred and gaps will have emerged. Take for example the sealing and sending out of court orders. Sometimes the obligations set out in those orders will have expired before the order is even received.

The emergence of such problems in an already complicated area such as the implementation of a pension sharing order on divorce and the potential for problems increases. The rules are complicated, as is the process and the requirements which the parties and the pension providers have to follow and observe to effect a transfer from one pension scheme to another  where, as with most orders,  the transfer of benefits is to an external scheme. The vast majority of schemes are likely to have seen significant falls in their values since March 2020, but that is not a reason to avoid or ignore the obligations conferred by the order. It can turn ugly, however, where the pension member who is remaining in the scheme and who therefore continues to be the client of the pension provider, invites the transferee to ‘pick another date’ for implementation and represents that the request has come from the pension provider or worse, tries to enlist the support of such pension provider with this request. Such a happening would not constitute a Barder event, but there are already stories emerging about surreptitious attempts to change dates and re-write orders and a handful will no doubt make the headlines, for all the wrong reasons ,  in due course.

Please note that the general guidance provided within this blog is accurate at the time of writing (10 July 2020). It does not constitute legal advice and specialist advice should be sought in individual circumstances.

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