The impact of the covid pandemic upon valuations of family businesses has led to the reopening of Final Financial Settlement Orders under the Barder Principle.
Panay Vassiliou of Kangs Solicitors explains the nature of the Barder Principle and some pertinent court Judgments.
We appreciate the considerable stress and anxiety experienced by separating couples throughout such a difficult period, especially when valuations of the family business are necessary.
Our Family Law team can be contacted for an initial no obligation discussion at any of our offices:
The Barder Principle | Kangs Barder Principle Solicitors
In the case of Barder v Caluori  AC 20 it was established that a Final Financial Settlement Order may be appealed by either party where an event happens which is both unforeseen and unforeseeable and which undermines the basis of that Order.
Before an Application can be made, permission to appeal the original Order out of time must be brought reasonably quickly, depending on the circumstances of the case.
However, not every event satisfies the criteria required by the Barder Principle and, by way of example, the decision of Cornick v Cornick (No1)  2 FCR 1189 established that the fluctuation of share prices failed to constitute a Barder event.
Recent Family Law Cases | Covid-19 and Share Valuations
- In OG v AG  EWFC 52 the Judge applied a 10% discount to the trading value of the company to reflect the uncertainty created by both Covid-19 and Brexit.
- In FRB v DCA (No 3)  EWHC 3696 (Fam), the husband challenged the valuation of the business relying on the Barder Principle and the uncertain stock market due to covid but his application failed.
- In HW v WW  EWFC B20 the husband had agreed to a Final Order on 12 March 2020, just days before the first National Lockdown. In response to an application by the husband for a reassessment under the Barder Principle, the wife contended that the fall in the value of the company was simply a ‘natural process of price fluctuation of shares.’ Whilst the Judge agreed that, in principle, the Covid pandemic was sufficient to amount to a Barder event in this case the husband’s application failed as he concluded that on 12 March 2020 the risk of a decline in the company’s value was foreseeable and when agreeing to the terms of the Consent Order, he was on notice of significant world events and resulting impact.
How to Contact Us | Kangs Family Law Solicitors
We appreciate that many relationship breakdowns lead to a period of considerable stress and anxiety, particularly so when financial issues need to be agreed.
Our team will work proactively with you in an effort to secure an early favourable financial settlement whenever possible.
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