If the relationship breaks down, she may find herself trapped in the marriage for fear of the consequences of divorce – and trapped if she leaves, because of the constraints of the prenup. She is at the mercy of her spouse. Such a scenario is not uncommon in other countries but in England and Wales, despite the ruling in Radmacher v Granatino last year, we still do things differently.

In my experience – and I accept, of course, that I am instructed when things go wrong – the existence of a prenup can cause resentment to build and anger to surface. Eventually, the couple’s relationship can wither on the vine. I’ve seen it happen, and I have also been contacted by readers of this blog who have been caught up in these types of agreement and don’t know what to do.

It can be argued that that you enter into a prenuptial agreement freely and of your own will. You are not forced to sign, and you know what you are doing. So why should you not be held to your bargain? It happens in Europe and it happens in the USA. The Supreme Court certainly thought so in Radmacher v Granatino. That case featured a prenuptial agreement signed in Germany and which, to many English lawyers, seemed grotesquely unfair. But the poorer spouse, in this case the husband, was held to his bargain. He had signed it and he had to live with the consequences, leaving his marriage with nothing from his heiress wife. He had signed away his entitlement to capital or income.

Or had he?

Radmacher v Granatino

When the Supreme Court handed down its judgment in the case, it left a window open:

The court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement.

Although the judgment gave prenuptial agreements “decisive weight”, it is still not necessarily the case that prenups are upheld by English law. To fill the gaps and avoid any further possibility of “fairness” raising its irrelevant head, new legislation may be on the way next year.

In the meantime, how much wriggle room is there in reality?

There were critics of the Radmacher decision who wondered if a similar fate would have befallen a woman in front of the Supreme Court. Had the roles been reversed, and Mr Granatino had been the one worth £100 million, would Ms. Radmacher have left the marriage with nothing? Or would the court have found a way of meeting the needs of a wife and mother? Perhaps the effect of Radmacher v Granatino could only truly be understood when such a case came before the courts…

This then was the speculation swirling around the newly appointed Mr Justice Moor in one of his first cases, Z v Z [2011] EWHC 2878.

Z v Z

In this case, it fell to Mr Justice Moor to adjudicate the merits of a French prenuptial agreement – a Separation des Biens – between two French citizens living in London. In that agreement, the wife had surrendered any right to share in the couple’s shared assets. Only the assets in their own names would ever remain their own. However there was no mention of maintenance in the agreement.

Acting for the wife, Tim Scott QC won the first round before Mr Justice Ryder, securing English jurisdiction. It then took three years before the wife’s application for a financial settlement was finally heard, before Mr Justice Moor in October 2011. The judge had to decide whether to give full intent and effect to the draconian French agreement signed by the wife in France in 1994, days before the couple’s marriage.

The couple had gone on to have three children. The assets involved were £15 million, of which the wife had £1.3 million in her name. The husband was an extremely high earner: between 2006 and 2011, his average annual income was in the region of €3 million. His income was thereafter projected to drop, to exclude bonuses.

The husband’s position was that sharing, per White v White, was excluded as a consequence of the 1994 agreement. He accepted the narrow window afforded by that particular agreement – that the wife’s needs should be met – and, assessing and capitalising her housing and maintenance needs, he offered an overall total of 35 per cent of the assets.

The wife sought 50 per cent of the total assets. During the marriage she had hoped that he would agree to vary the agreement, but the court found it was never varied. Was she entitled to “share” in the assets, despite having given up her entitlement to do so? Otherwise was she entitled, at the very least, to have her needs met and to be compensated for having given up her job and having children?

Or was the case to be dealt with by reference to French law only, which would have applied had the parties been living in France?

The judgment

Mr Justice Moor rejected the argument about the application of French law. In England, English law is always applied. He then considered the state of the relevant law in England.

The judge referred of course to Radmacher, focusing on the Supreme Court’s comments about the various elements of any financial award: needs, compensation and sharing.

With regard to sharing, he pointed out that even though Lady Hale dissented in Radmacher, she still commented as follows:

In the present state of the law, there can be no hard and fast rules save to say that it may be fairer to accept the modification of the sharing principle, than of the needs and compensation principles.

It seems to me that this is what Mr Justice Moor did. He upheld the agreement and rejected the compensation argument. He then made provision for the wife’s needs, which he accepted could not be fully met out of her own capital. He awarded a lump sum for a house and capitalised her income requirements per Duxbury.

He assessed the wife’s income needs at £100,000 per annum. For most of us this is a small tax-free fortune each year, but surely not for a wife in these circumstances, with such a high-earning husband and a substantial lifestyle? The judge did, however, add £75,000 per annum for the three children.

When totted up, the total she received amounted to 40 per cent of the assets. What a neat sum – so neat, in fact, that I wondered if it had been in the judge’s mind and if he had worked back from there!

Final thoughts

I have put off writing about this judgment because I wanted to consider its overall effect. I think it is full of common sense. Mr Justice Moor made it clear that if there had not been a prenuptial agreement, the wife would have received 50 per cent of the assets. But because there was an agreement, and because the judge gave effect to that agreement, he was left with no alternative but to make sure that the wife’s needs were met.

What is wrong with that?

After 14 years of marriage, three children and vastly changed circumstances, it seems to me that the decision in this case was spot on.

What comes next year may change everything again but, in the meantime, I can see nothing wrong with the law as set out in Radmacher v Granatino, and applied in Z v Z. I said it when the Radmacher judgment was handed down and I’ll say it again: there is no need for any further legislation. The judiciary are doing a fine job of applying the law.

The first wife

The first wife cannot manage on her own, modest earned income following her divorce, and therefore she needs to have her income supplemented by maintenance from her former husband. He agrees and despite her being child-free and able to work, he does not insist on a cut-off point for maintenance even if she is still quite young. Perhaps he reasons that she will be self-sufficient at some point in the future. Perhaps he reasons she will remarry. Perhaps he feels guilty. Perhaps he wants it all over and done with without a fuss.

However the first wife will never get to taste the real fruits of their joint hard work begun and built up during the marriage. The rewards of status and financial success will be privileges reserved for the fortuitous second wife. By the time the second wife marries the husband and has his children, he has become financially prosperous. Together, they have a long and successful marriage.

The husband can always apply to terminate maintenance payments to his first wife, on the basis that at some point she should or has become self-sufficient. But there are a number of cases in which the divorce occurred at a time before wives were expected to become self-sufficient and maintain themselves. The only way these wives could realistically maintain themselves, hampered as they were by lack of training and by advancing age, is by the receipt of maintenance. In these cases, maintenance has been paid for a very long time. Although these wives are sometimes perceived by the media as greedy individuals, receiving hand-outs long after their sell by date was reached, realistically they have no option. They are the products of different times.

The law

In the absence of the first wife’s remarriage, or a court order terminating her maintenance obligations, the law states that payment is to be made until she dies.

However if maintenance payments are to be terminated by the court, causing undue hardship to the payee, the court may order a capital sum to be paid instead on a ‘Duxbury’ basis, under section 31 of the Matrimonial Causes Act 1973. So when the divorced wife reaches at the age at which she is actuarially expected to die, having applied the lump sum on a part investment, part expenditure basis to produce her annual net income as assessed by the court, the lump sum will have been used up. This is called amortisation of the lump sum. (For more on this, see the leading case of Pearce v Pearce EWCA Civ 1054.)

Vaughan v Vaughan

The case of Vaughan (2010) EWCA Civ. 349, centred upon a 13-year marriage that ended in divorce in 1985. The wife was working part-time as an art expert; the husband, who had qualified as a barrister at the age of 24, had just become a QC. He was 42 and the wife was 37. There were no children.

At that time, relatively few wives in their 40s went to work full-time to support themselves. Nearly 30 years later, times have changed.

Mr Vaughan married the second Mrs Vaughan; she was 15 years younger than him and they had two children. He went on to become one of this country’s leading experts in EU law. (He became so well known, in fact, that the Court of Appeal had difficulty convening an impartial bench that could hear this appeal.)

In 1989, the first Mrs Vaughan’s attempts at building a career for herself had floundered and she applied to the court. It must have been a hotly contested application. In 1991 when judgment was ultimately given, the court found that the wife’s earning prospects were only £5,000 per annum and she clearly could not manage. Conversely, the husband by then had a gross annual income of £243,000. Mr Justice Booth found that the first Mrs Vaughan had income needs of £27,000 per annum. He set maintenance payments at that level, backdating the order to 1989 with no cut-off point. He declined to give Mrs Vaughan maintenance in excess of her comparatively modest needs, notwithstanding her former husband’s vast income, setting a substantial differential between living standards of first and second wife for the rest of their lives. The outcome was not generous to Mrs Vaughan.

Mr Vaughan is now 71, and the second Mrs Vaughan is 56. His health has deteriorated in the last three years, and his income is no longer what it was. However he has a pension pot worth more than £2.3 million, from which he intended to take a considerable deduction on the income, in order to benefit his second wife substantially in the event of his death. He also gave his second wife a share portfolio worth £330,000.  He and his second wife agreed that their jointly owned London home, worth some £4.3 million, should be sold and that they would move to a smaller property worth some £2 million or thereabouts. This would also give his second wife another £900,000 of liquid capital, after costs.

Back in court

Last year, in view of the loss of his earned income, Mr Vaughan applied to the court to terminate the maintenance payments that he was making to the first Mrs Vaughan.

The first Mrs Vaughan had never applied for an increase in her maintenance. She lived on her maintenance and also had pension income of £5,000 per annum. In terms of capital, she did come into an inheritance from her parents in 1988 and 2005. After spending an incredible £200,000 in legal fees fighting this case, she was left with liquid capital of £380,000 liquid: the balance of her inheritance. She also lived in a house now valued at £1 million which, it was agreed, needed repairs and redecoration. Mrs Vaughan also had a valuable Indian desk worth £300,000 from her original divorce settlement.

Mrs Vaughan cross-applied for capitalisation of her maintenance claims under section 31 of the Matrimonial Causes Act 1973. She requested a Duxbury lump sum of £560k, based on an increased maintenance need in excess of £50,000 per annum. She was asking for a lump sum to cover almost double the present maintenance and perhaps that was too high.

Although the parties agreed that Mrs Vaughan’s income needs had increased from £27,000 per annum, they could not agree upon a new amount. Mr Vaughan argued, in an 80-paragraph opening statement, that even if her needs had increased, because of the down turn in the husband’s income and her own inherited capital, he should not have to pay her any compensatory Duxbury settlement at all. She should be expected to manage on what she had.

In the lower court, with his formidable advocate Nicholas Mostyn QC, Mr Vaughan succeeded. The judge found that Mrs Vaughan could manage by amortising all her own liquid capital to provide for her future lifetime income needs, without the need for any capital payment by Mr Vaughan.

In the Court of Appeal

Should the first wife have been expected to use her parental inheritance to pay for her maintenance needs? In the Court of Appeal, Lord Justice Wilson delivered the judgement.

Applying Pearce, he attributed a net income need of £48,000 per annum to Mrs Vaughan. He found she could not adjust to the ending of her maintenance without undue hardship. The lump sum she required under the Duxbury tables, to give her £48,000 per annum for life, was about £500,000. It was wrong for her to be expected to “amortise” her inheritance (Lauder –v-Lauder 2007 EWHC 1227). He did take into account the £300,000 value of her Indian desk: the net proceeds of the desk would be “amortised”. This left a shortfall under the Duxbury tables of £215,000, which he ordered Mr Vaughan to pay.

Question: so if you are a first or second wife, which wife takes priority?

Answer: neither of them.

Lord Justice Wilson followed the case of Roberts  v Roberts (decided forty years ago in 1970 and still good law). While the court does not give priority to the claims of the first wife, the second wife took the husband “subject to all existing encumbrances” and so priority is not given to the claims of the second wife either.

As with much so much of our law, it is a balancing exercise. It is about fairness and, ultimately, the discretion of our judges if the parties can’t agree a sensible compromise between themselves, about figures which – with all due respect – do not seem to be rocket science.

There are still quite a few of these cases around. To people who have grown up in the ‘Noughties’ such decisions may, on the face of it, seem unjust. Certainly the comments I have read on newspaper websites seem to knock Mrs Vaughan very hard.

However it is worth remembering that in the 1980s, times were different for women. Today, young childless recipients of open-ended maintenance with no reasonable prospect of self-sufficiency are rarer. I suspect that the awards to the “Mrs Vaughans” of this world will, ultimately, become far fewer in number.

Image credit: Nanagyei.

The judgment in the latest installment of the never-ending divorce saga that is McFarlane  v McFarlane, (2009 EWHC 891) landed on my desk yesterday morning. A judgment from Mr. Justice Charles, it is characteristically lengthy. Thirty-five pages in length, it takes a long time to read . It takes even longer to consider the meaning and impact, this judgment being his Lordship’s interpretation of what the House of Lords may have had in mind (but never expressly stated) by a “deferred clean break”, payable at some stage in the future, by Mr McFarlane to his former wife.

I was in two minds whether to write about the latest twist; after all, what relevance does any of it have to those of us who live relatively modestly in the real world? However, this case has wider implications. It reminds me of a seesaw. On one end: the stay-at-home wife and her children. On the other: the working wife and her children. In the middle, sliding from one end to the other: the husband. Does English family law substantially favour the stay-at-home wife, at the working wife’s expense? Does it curtail a second wife’s freedom to leave her job and become a stay-at-home mum?

Let me explain. The McFarlanes litigated themselves all the way to the House of Lords in their original divorce. They split their capital roughly 50:50. Both came away with about £1.7 million. Both purchased substantial properties for more than £2.5milllion apiece.

In Europe the wife’s claims would have ended there. In England and Wales, however, Mrs McFarlane’s income needs still had to be met – and at the time there was insufficient capital to provide a clean break divorce. (NB. If any case shows how important it can be for a husband to try and obtain a clean break settlement in his divorce, it is this one!)

The divorce was dragged through four courts, yielding various decisions about the ongoing maintenance to which Mrs McFarlane was entitled. Her actual needs were estimated at £150,000 – £180,000 per annum. However the final arbiter, the House of Lords held that, as she had given up her career as a solicitor to care for the couple’s three children, she should receive more in recognition of her lost earning capacity. The House of Lords confirmed a higher award of £250,000 per annum, substantially in excess of her needs – with no cut-off point.

The words “relationship-generated disadvantage” became a buzz-phrase, until Mr Justice Coleridge pointed out that the phrase did not actually exist in statute. This prompted the President of the Family Division to issue a clarification in which he made it clear that in big money cases, the issue of “relationship-generated disadvantage” would arise simply as a strand or element of fairness. Precisely!

Mr McFarlane has remarried, to a partner at his accountancy firm. They have a son, who is now three years of age. Mr McFarlane’s career has continued to flourish. In 2007, one year after the House of Lords’ judgment, his former wife issued an application to the court for increased maintenance for the children, who are now aged between 13 and 20. She subsequently applied for an increase for herself and capitalisation of her maintenance claims. Last week the judgment was handed down…

The court has a duty to consider if a clean break is possible; if so it can, if it wishes, order payment over a term of years after which a clean break will occur. That is what Mr Justice Charles did, but he made an order to fund an eight-year, deferred clean break, all payable out of the former husband’s post-divorce income – to which his second wife contributes, and his first wife does not.

From 25 June 2007 (when Mrs McFarlane issued her original application for an increase), Mr McFarlane must now pay his former wife:

40% of his net income up to £750,000

20% of his net income up to £1 million

10% of his net income thereafter, until 31 May 2015 when maintenance stops and Mr McFarlane retires.

The judge calculated that this would give Mrs. McFarlane an unearned tax free income just shy of £350,000. As he backdated the award by two years, there will be the differentials to pay for those two years as well. In eight years’ time she could have received around £2.5 million.

What a whopping award! It makes you wonder why Mr McFarlane doesn’t just throw in the towel and live off his second wife’s income. It also makes you wonder how hard it is to earn this kind of money – and if this is sufficiently appreciated by the court. It certainly doesn’t grow on trees if all those professionals I represent or see on trains and planes, sweating profusely, banging on laptops, e-mailing and making non-stop mobile calls on a 24/7 basis are anything to go by!

From now on, the first Mrs McFarlane must have one of the highest unearned, tax-free incomes in the country. It amounts to £200,000 more than her needs as found by the Court.

So I ask myself the question: is the carve-up of Mr McFarlane’s income truly representative of “fairness”? Is this what the House of Lords intended? I ask this because in the same case, the High Court and the Court of Appeal were far less generous to Julia McFarlane. I must say, I find it hard to see why there should have been an adjustment in the current payments.  The wife’s compensation claim is one strand in the element of fairness.

Turning back to the seesaw: we must not forget the very substantial contribution of the second wife to Mr McFarlane’s post-divorce income, running the home and – as the judge acknowledged – taking on the brunt of the couple’s childcare while holding down her top-flight job as a senior partner at Deloitte.

I am certain that many first wives will rejoice at the huge financial success of one of their number. No doubt there is considerable sympathy for a wife who has been abandoned with children, and relatively little sympathy for the second wife. But several years ago the first Mrs McFarlane came out of the marriage very well, financially. She has now done even better, long after the divorce. One may feel that by now, she could – and should – be providing far more appropriately for her own future, off her own bat.

Second wives are frequently castigated by the first family, and are frequently left to bear the brunt of the marital breakdown alone. The husband sits helplessly in the middle of the seesaw. Second wives have complained to me that their husbands never overcome the guilt of leaving their first wives. Instead, these men allow themselves to be turned into tireless “dogsbodies”, to try and demonstrate to the world that they are nice guys after all. Meanwhile, first wives complain that these men are under the thumbs of their second wives and do not pay as much as they should to them and their children.

In many cases, the second family’s standard of living slips. The pressure to keep earning, to keep two families living well on one income means that a second wife can have no choice but to keep working. Her desire to stay at home and look after children can be thwarted by the large monthly payout to the other household. The resulting bitterness, pressures and remonstrations – “why is she doing nothing with her life, when I’m working like this to keep them in luxury?” – can destabilise even the strongest second marriages.

I wouldn’t dream of denying Mrs McFarlane her fair share. However from a personal perspective as a working wife and mother, who has always contributed to the family budget, overall I believe that Julia McFarlane’s latest award is excessive. I also believe that it pays scant regard to the impact of this award, in a number of ways, upon Mr McFarlane and his second family.

Image credit: rachelvoorhees.

The effects of the economic turbulence are laid out for all to see. This weekend I attended one of Yorkshire’s big charity balls. Last year there were no spare tables, and guests overflowed into additional halls. The ladies present were immaculately groomed and decked with twinkling jewels. Money streamed across the “casino” tables and glasses were filled with champagne. A spectacular raffle raised an extraordinary sum. This year that ball was a very different occasion, and it was sad to see. The raffle prizes raised little more than a few hundred pounds; the corporate tables taken by Yorkshire’s high flyers were few and far between.

To date, no client has told me that the current economic woes have been the direct cause of their divorce. What I can say, without a shadow of a doubt, is that the nature of divorce settlements is vastly changing. With households’ assets and incomes vastly reduced, a “clean break divorce” is now much less likely for many couples.

I think it is true that, just as unhappy wives married to wealthy men chose to divorce when times were good, unhappy husbands are now observing the downturn in their wealth – and deciding that if they are going to seek a divorce, now is as good a time as any.

However, I fear that with the credit crunch in full swing, a “cheap divorce” could end up costing these high-flyers dearly.

As the value of assets and expected future earnings spiral downwards, couples are increasingly opting for ‘maintenance-based’ divorces, which involve regular payments out of income calculated on the financial position at the time of divorce. However, at a later date when the value of assets has risen, this approach could lead to the recipient spouses rushing back to court to claim greater financial entitlements.

Any worried city bankers or property investors whose marriages have broken down and who are looking for an upside to the economic situation could find one in the divorce courts. Now is the time for a “clean break” divorce. On the face of it this may seem unrealistic because it could cost more this year than appears affordable. In the long run, however, this approach could save millions.

A “clean break” divorce involves an upfront cash payment to cover the capital and income needs of the recipient spouse (usually the wife). Her income needs are calculated using the Duxbury Tables. So if her income needs are substantial, her capital entitlement could run into seven figures for a lifetime maintenance award.

Devalued assets, which may be worth less than half of what they were worth one year ago, may mean that a “clean break” no longer appears possible. However, now is the time for negotiation: a recipient spouse looking to move on may still be inclined to take a lump sum rather than a reduced income.

Also note: the more your assets have depreciated -providing they have the potential to increase in value again – the more you may be able to save in the long run. This is particularly pertinent if you  want to avoid a capitalisation application a few years down the line, once the economy has stabilised again.

Of course, it follows that for the recipient spouse a “clean break” – unless it is a very attractive offer – should be avoided if at all possible. Because the couple’s wealth will be less than it was this time last year, it is imperative that the lure of a reduced one-off, lump sum is resisted. Otherwise, the recipient spouse surrenders the right to have their former partner’s wealth reassessed by the court at a higher level in the future and a substantial lump sum taken now, may not be as attractive a proposition in five years time when the economy has improved.

I predict that in general, divorce proceedings are set to become more turbulent. In “big money” cases over the past few years, lawyers have become accustomed to splitting assets equally, to meet both parties needs comfortably and leaving a surplus for equal division.  But from now on, the stakes for everyone involved are going to be higher. I suspect that the demand for hotshot negotiators is set to increase.”

Settle your case on a continuing maintenance basis, and it can come back to haunt you…

For many people, a financial settlement represents the final chapter in a divorce. Generally, it comes to all concerned as a huge relief. Parties can begin to rebuild their lives, putting the unpleasantness of a break-up behind them. For those who achieve a clean break settlement, it will most likely be the end. However, for those who continue to pay or receive maintenance, this is not necessarily the case.

Maintenance may be paid for a period of time, with the court reserving the power to extend that period – or not, as the case may be. Maintenance may cease on cohabitation and will automatically end on the recipient’s remarriage. In other cases, maintenance will have no cut-off date and will only be stopped on the orders of the court, or on the death of the payer or payee.

If one of the parties wishes to bring an open-ended maintenance order to an end, this may occur by mutual consent. Both parties may agree that the time has come for the order to cease, the recipient spouse being able to manage alone.

Solicitors are consulted usually when there is no such agreement, and one party does not want to end or reduce the obligation.

Variations of maintenance orders are expensive and risky. As with the original application for a capital and income award, it involves going through the County Court or Principal Registry in London. The costs will be high – and as a result obtained for either party is likely to be disproportionately expensive. In a straightforward case, it makes sense to negotiate or proceed via the Magistrates Court. This is a simpler and cheaper process. However, when larger sums of money are involved, an experienced Judge will be required to make the determination.

There aren’t any winners in a Maintenance Variation. I don’t recommend it unless it is absolutely necessary, and legal costs are not an issue.

This isn’t all. Section 31 of the Matrimonial Causes Act 1973 permits somebody who is in receipt of maintenance to apply for a lump sum of capital, instead of continuing payments. This capitalisation of maintenance can be a very attractive prospect. It can be particularly attractive when a recipient is involved in another relationship which, if it turned into marriage, would mean that the maintenance was no more.

In many such cases, a clean break was impossible at the time of the divorce, due to insufficient capital. Years later, the financial positions of both parties may have altered. A husband may have rebuilt his capital and be about to retire. If his overall income is about to reduce, he may well wish to hold onto all of his pension.

I advise those who prefer to pay maintenance to bear section 31 in mind. If they can afford a clean break settlement at the outset, this can be the best course to follow as there will be no ‘comebacks’ in the future.

Even so, some people prefer to pay maintenance. They reason that their former spouses are likely to remarry, whereupon maintenance will cease. They believe that on balance, maintenance is a more cost-effective option.

However, it is important to note that applications for an order under section 31 of the Matrimonial Causes Act 1973 are often made in response to an application to vary maintenance downwards or terminate it.

This happened recently in a case called Dixon v Marchant. The judgment was given by the Court of Appeal on 24 January 2008.

Mr Dixon had been paying maintenance since 1993. In 2005, as he approached retirement, he wished to vary his maintenance downwards. Negotiations ensued about paying a lump sum in lieu, under section 31.

His former wife consistently rejected any suggestion that she was cohabiting. Eventually, the parties settled. Mr Dixon paid his former wife £125,000 to end all liabilities for maintenance. This was probably not as much as she might have achieved in court.

Within a few months, the former Mrs Dixon remarried and became Mrs Marchant. Mr. Dixon applied to the court for the return of his £125,000, claiming that this event was what lawyers call a “Barder” event and as such, he was entitled to the return of his money.

A “Barder” event is something with which I am familiar, having been involved in one of the reported cases on the subject (SvS (2002) 1FLR 992).

Such a case concerns a new event that would have materially impacted on the original settlement. The event occurs within a relatively short time after an award has been made, leave to appeal is made very quickly after the supervening event has occurred. It is also a requirement of such an event that if an order is set aside, no third parties will be adversely affected.

The evidential bar is high. It is vital that any “Barder” case must be dealt with very promptly as soon as the new event occurs, as a delay can be fatal to the case.

In S v S, I represented Mr. S. The late Mrs Justice Bracewell held that the groundbreaking 2000 decision of the House of Lords in White v White was indeed capable of being a “Barder” event. However she found that Mrs. S’s own lawyers should have been aware that the decision was shortly to be made. Instead, they had advised Mrs S to agree to an earlier settlement, calculated on different principles, without waiting for the judgment to come out. As a result, Mrs S’s award was well over £1million too low. My client successfully defended her “Barder” application and did not have to make up the difference. He was fortunate.

By a 2:1 majority, the Court of Appeal this year in Dixon v Marchant found that Mrs Marchant’s remarriage was not a Barder event, and that she could keep her settlement. Lord Justice Ward found that there was no basis at all that the deal would founder, if the wife remarried. Lord Justice Collins concurred.

Lord Justice Wall disagreed. He delivered a judgment with which I agree. He went through the “Barder” conditions, applying them to the facts of this case. They all appear to fit. I think Mr. Dixon was unlucky.

There are a number of other reported cases about Barder events. I think this is a tricky and very interesting subject. The case of Dixon v Marchant also struck me as interesting for other reasons. It raises the question of whether Mr. Dixon was right to try and reduce his maintenance in the first place. The stakes were high, because both parties were at risk of paying all the legal costs involved. Litigating about principles does cost dear.

If you are about to settle your case on a continuing maintenance basis, bear in mind that section 31 of the Matrimonial Causes Act 1973 can loom large years down the line. It can come back to haunt you – or hand you a tidy little windfall as good as a first-class win on the Premium Bonds.