Varying a Financial Consent Order


15 September 2022

By Farhad Islam

A Financial Consent Order sets out the financial agreement between you and your ex-spouse in relation to the division of the matrimonial financial assets. Once approved by the Court, the Financial Consent Order becomes legally binding and can be enforced should it be breached by a party.

Financial assets include: –

  • Property (both jointly and solely owned).
  • Savings, investments/shares and pensions (including business assets).
  • Debts.
  • Personal possessions – e.g. furniture, car(s) etc.
  • Spousal maintenance.
  • Child maintenance.
  • Any other expenses e.g. life insurance/private healthcare.

On a side note, there is a misconception that your finances are dealt with as part of your divorce. This however is incorrect. Your divorce only brings to a legal end your marriage. Accordingly, if you fail to resolve the finances as part of/immediately after the divorce, both you and your ex-spouse are effectively leaving yourselves open to claims from one and other. It is always advisable therefore to resolve the finances at the same time/immediately after the divorce.

Reaching a financial settlement on divorce is often painstakingly negotiated over many months (if not years), so as to reach the fairest outcome for both parties. Nevertheless, despite the best intentions of the parties, lives move on and circumstances change; what may have been an appropriate Financial Consent Order at the time of a divorce may no longer be appropriate in the future.

The UK has seen a period of economic instability in recent years, with COVID-19 being the main catalyst (not to mention Brexit). We are now in the midst of a cost of living crisis. At the time of writing, inflation stood at 10.1%, albeit has since (marginally) decreased to 9.9%. Inflation is predicted to rise to 23% by the end of the year. Food prices alone are expected to rise by 15% by the year end. Energy prices are also on the increase. Whilst the government’s intervention to place a cap on energy prices is most welcomed, it seems the general public will ultimately be left to foot the bill for many years to come. This will undoubtedly place a strain on people’s finances, particularly as prices continue to rise faster than wages, which may, in turn, impact on people’s ability to satisfy their financial commitments (including those made following a divorce).

The question therefore is, can a Financial Consent Order be varied to factor where circumstances do change? Consent Orders are ordinarily considered a ‘clean break’ between the parties, meaning that neither party will be in a position to make a future financial claim against the other. There are however some aspects of a Financial Consent Order that can be varied. The circumstances in which a Financial Consent Order can be varied are (non-exhaustive):

  1. Stopping spousal maintenance payments.
  2. Reducing or increasing spousal maintenance payments.
  3. Extending or reducing the length of time spousal maintenance payments are paid for
  4. Capitalise the spousal maintenance payments, meaning rather ongoing monthly payments a one-off lump sum payment is paid instead.
  5. Remove or change a child maintenance requirement contained in the Financial Consent Order.
  6. End or change a school fees order that you are no longer required to pay school fees.
  7. Change the arrangements pertaining to the sale of the former family home. The agreed percentages i.e. how much each party should receive from the sale cannot be changed.
  8. Pension sharing order. However, this can only be changed if it was made before Final Order (Decree Absolute) and the application is made before the pension sharing order takes effect.
  9. Lump sums by instalments.
  10. Settlement orders. This is an order for the settlement of property for the benefit of an ex-spouse or child of the family.

Notwithstanding the above, there are aspects of the Financial Consent Order that simply cannot be varied. The Court will not entertain any application to vary the capital element of the Order, such as the amount of a lump sum payment (not payable by instalments) or whether assets should be split differently to that already agreed in the Order. The only way this may be possible is by challenging the Order. However, to succeed, you must show one or more of the following: –

  • Your ex-spouse did not provide full and frank disclosure.
  • The valuation of any asset was miscalculated, either by mistake or fraudulently.
  • You signed the Order under emotional distress or lacked mental capacity e.g. suffering from a mental illness.
  • Something happened soon after the Financial Consent Order was approved/sealed by the Court, which would change the terms of your agreement – e.g. you have an accident that makes you unable to work or your ex-spouse comes into a large sum of money.

The factors which might give rise to a change of circumstances significant to varying a Financial Consent Order are (non-exhaustive): –

  1. Any material increase/decrease to the incomes of the parties;
  2. Any windfall of capital to either party;
  3. Changes in geographic location;
  4. Cohabitation or re-marriage;
  5. Loss of employment;
  6. Ill-health or death of either of the parties or any dependants.

When considering an application to vary a Financial Consent Order, the Court will consider all material facts to try and ascertain what the parties intended. The factors the Court will consider are (non-exhaustive): –

  • Welfare of any children of the family. This will be the Court’s first and primary concern.
  • Any change in circumstances- the change(s) need to be significant.
  • Specific evidence presented with the application.
  • Whether a “clean break” is warranted.
  • Fairness.
  • Financial circumstances of both parties- the Court will consider the reduced income of one party, the increased income of the other, and any increase or decrease in responsibilities.

You and your ex-spouse will be expected to engage in the disclosure of your financial circumstances- the Court will not otherwise be in a position to properly determine the application.

The first step in varying a Financial Consent Order is to reach out to your ex-spouse and invite them to re-negotiate. This can either been done directly with your ex-spouse, with the assistance of solicitors, or mediation. If this is not possible, then the only solution would be to make an application to Court to vary the Financial Consent Order.

Ultimately, whether you succeed in varying a Financial Consent Order will very much depend on whether there has been a significant change in your circumstances. The cost of living crisis alone may not be enough to justify the variation of the Order. Indeed, we have recently seen cases come before the Court (AJC v PJP [2021], EWFC B25 & FRB v DCA (No. 3 [2020] EWHC 3696 (Fam)) seeking the variation of a previously made financial order, with COVID-19 being citied as the primary factor. Whilst the Court acknowledged the devastating impact COVID-19 had had financially, the Court was not inclined to vary the previous order.

If you believe you have grounds to vary a Financial Consent Order, it is crucial that you seek advice from a solicitor right away, as they will be able to guide you through the next steps.

This is not legal advice; it is intended to provide information of general interest about current legal issues.