Myerson: the impact of the credit crunch on preexisting divorce settlements

Abstract

With the recession in full swing and a declining global economy, the Court of Appeal in Myerson v. Myerson [2009] EWCA Civ 282 was asked to consider whether significant changes in the value of matrimonial assets, following the onset of the credit crunch, should be seen to be a sufficient reason for setting aside a divorce settlement and dealing afresh with financial matters. In their much-anticipated judgment, the Court made it resoundingly clear that a reduction in the value of assets as part of what was described as the ‘natural processes of price fluctuation’ did not satisfy the legal test for a change in a settlement. Thereby, they failed to provide relief to those who, in more stable times, had formed settlements involving risk-laden assets. The Court restated current law under which judges are reluctant to reopen orders in all but the most exceptional of circumstances and preserved the obscure nature of the successful Barder, showing determination to adhere to the principles of certainty and finality even in these difficult times. This commentary will proceed to examine the Court's reasoning for adopting such an approach and the cautionary message that their ruling sends out to credit-crunched individuals attempting to reopen their divorce settlements.

Keywords:

• financial provision
• ancillary relief
• appeal against consent order
• Barder test
• global financial crisis leading to significant reduction in value of husband's assets
• whether order for ancillary relief should be set aside