When you go through divorce and dividing up the assets you need to sort out your financial matters with your soon to be former spouse. This can be done in a number of ways:-

• Through mediation
• Between yourselves
• Via solicitor negotiation
• Through the court process

However this is done, it is very important that both parties are on an equal footing throughout the negotiation process; that both parties reach an informed decision and both have had the opportunity to have independent legal advice.

At the end of hopefully not a very long and drawn out process you will end up with a legally binding court order approved by a district judge which reflects what you have agreed.

Sometimes one of the parties to divorce will want to change the order. If a district judge has made the decision at a final hearing, the process will be to appeal the decision of the district judge. If the parties themselves reached an agreement which was then reflected in a court order and approved by the district judge, it will be a case of setting aside the order or varying the order.

The process for appealing a decision of a district judge is not detailed in this article apart from to say that appealing a decision of a district judge can only be successful if it can be proved that the court has made an error as to the law of procedure or both or something very important has been overlooked; for example perhaps one of the parties did not have true capacity to understand

This note is about setting aside a financial order when parties have reached agreement following negotiations through mediation, between themselves or in the early stages of the court process when the district judge will try and help the parties reach agreement. The agreement is incorporated into a financial order which is approved by a district judge, sealed with the court seal and then becomes legally binding. This is final and the parties to divorce can then move forwards with their lives.

However, there are a number of reasons why someone would want to try and effectively cancel and order which has been made. This is called ‘ setting aside’ the order. For example, where there has been an error, a fault during the process or perhaps new information or new circumstances have arisen which would invalidate the substance of the order so the reason why the order was made is no longer valid.

However, a word of caution, the court will not set aside an order lightly. In fact, it is extremely difficult to set aside an order which has been sealed. This is because of the focus in family finance proceedings for finality for both parties so that they can move forwards often after quite a long process to sort things out. The bar is therefore very high and there must be a very good reason why one of the parties wants to set aside the order or part of the order (it doesn’t have to be all of it).

For example if there is an order that the family home is to be sold and proceeds divided and there is to be a pension sharing order, the party wishing to set aside the order may want to set aside just one of those parts of the order; it is not necessary to set aside both.

The rules for setting aside orders are set out in the Family Procedure Rules section 9 and the success in setting aside orders is recorded in case law

There are three main ways to set aside a financial order, in other words, one of three things has happened:-

1. Firstly if there has been Fraud, mistake or material non disclosure
The key factor or question which should be asked is
‘would this mistake, fraud or non disclosure have made a difference to the outcome?’
If, for example, your former spouse failed to disclose that they had an ISA 10 years ago which had £2000, it is very unlikely that this would have made a difference to an overall settlement.

This can be compared to one party failing to disclose that he or she was about to marry a multi millionaire and therefore their financial circumstances turn out to be very different to those circumstances disclosed at the time of the settlement on which the financial settlement was based; in other words whatever it is must make a difference to the point that it goes right to the heart of the basis on which the order has been made.

Similarly if one party has committed fraud, this may also provide a reason to set aside an order. When it comes to fraud, the burden of proving whether or not this would make a difference would fall on the fraudster.

2. Secondly, there has been a ‘ supervening’ event, the most obvious one being death of one of the parties. One of the key cases under this heading is a very sad case called’ Barder’ which involved the wife killing herself and the children just three months after the order was made. The order in such circumstances can be set aside because the factual basis on which the consent order was agreed has ceased to exist. However, a word of warning about supervening events, it is very important that :-

– The application must be made promptly
– The supervening event must go right to the heart of the settlement as in the case of Barder
– There is no prejudice to 3rd parties
– The event must have happened reasonably soon after the event. That said, each case is considered in its own set of facts

Death of one of the parties is the obvious supervening event. One example would be someone dying who already had an illness which is known about at the time of the settlement. In the case of Barder the wife was terminally ill but she was expected to live for another 5 years and it was on these facts that she was going to live another 5 years that the order was made. However, she killed herself within 3 months which was not foreseeable and not the basis of the order. Suppose though in a similar case there were teenage children who needed a home following the expected death of the wife who has the illness, in that circumstance the heart of the agreement (the children having a home) has not ceased to exist even if their primary carer dies sooner than expected.

Economic fluctuations are generally not considered to be supervening events. A good example of this is the Covid Pandemic which caused huge fluctuations in the value of assets and there were many people who tried to set aside orders after the pandemic but it was not considered to be a supervening event to warrant the setting aside of the order.

3. The third possible reason for setting aside an order is that the agreement was reached following undue influence; in other words, there was significant pressure imposed on one party by the other. This is why it is absolutely vital that if you are in the process of trying to reach settlement both parties should have had the opportunity to have independent legal advice and they must reach an informed decision from having full disclosure of the other party’s financial and personal circumstances at the time of the settlement. If you turn up at your soon to be ex spouse’s home with a pile spreadsheets setting out various options as to what you consider to be a good settlement and saying its really urgent that you sort everything out now because of some imminent event which is going to change your financial circumstances and therefore your spouse’s circumstance, the chances are that even if you do reach agreement which is put into an order and approved by a judge , there may be grounds for setting aside the order later on if your spouse feels that he or she was railroaded into the agreement.

In summary, to ensure finality, when entering into a financial agreement with your ex spouse or soon to be ex spouse which you want to ensure cannot be set aside in the future, it is important that, whichever way you get to that agreement;

1. The financial agreement absolutely must follow a full and frank financial disclosure of your financial circumstances and also your personal circumstances at the time of the settlement ;
2. you must have both had independent legal advice or at least the opportunity to take independent legal advice and if your spouse chooses not to there is a signed clause saying that they have had independent legal advice, they have chosen not to take legal advice and they are fully informed and understand what it is they are agreeing to

If you think that there are grounds to set aside a financial order for one of the reasons above. Then it is important to take legal advice before making the application to set aside