Post-Nupitals Are Gaining Sway; Brian Myerson Was Forced to Stick to His Expensive Divorce Agreement, despite the Credit Crunch Wiping out His Fortune. Kevin Harris-James Looks at Why the Myerson Divorce Case Means the Rules of the Game Are Changing
Byline: Kevin Harris- James
These are challenging times as the economic recession impacts upon divorce settlements and the manner in which family lawyers advise. I am seeing notably more clients now who find themselves simply unable to meet existing financial obligations arising out of a divorce settlement - whether that settlement was by consent or judicial determination.
Many such clients have been waiting in hope for guidance from the Court of Appeal in the Myerson case. Unfortunately, their hope was in vain, although it will come as welcome relief for the recipient of the settlement.
Brian Myerson agreed settlement terms with his wife. He retained the other assets consisting mainly of his shareholding and various properties. It was agreed that he was to pay her cash settlement by instalments over four years, the first payment being pounds 7m within three months of the original order.
During the period between the settlement and the first instalment falling due, however, the value of his shares plummeted and, as a consequence, he was unable to meet the payment.
He therefore appealed the order on the basis it was rendered unfair and unworkable given the collapse of the global economy.
The Court of Appeal rejected the appeal, showing little sympathy for the debilitating impact of the recession upon those in difficulty meeting divorce settlements.
So, following on from Myerson and looking at the conditions which are collectively referred to as the 'credit crunch', what would I advise? First, Myerson is a cautionary tale for the unwary.
Second, we need to consider reaching an agreement before the court makes an order, sometimes even before divorce, and this is where Post Nuptial Agreements come in. Many people are aware of Pre Nuptial Agreements, as a means to protect the assets of the individual parties prior to marriage in the event of either party subsequently seeking a divorce. .
Although not legally binding in this country, the divorce courts are increasingly taking them into account.
Circumstances change during the course of a marriage and this means that Pre Nuptial Agreements may need a degree of revision to re-direct the division of assets should that become relevant, for example the birth of children, an inheritance or a lottery win. These changes may be regarded as Post Nuptial