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Can Covid justify re-opening a financial order?


Hopefully Covid will begin to recede as an issue in all of our lives but until it does if it has had a serious financial effect can it be a reason to re-open a deal?

The question has been considered by the High Court in the cases of HW v WW and BT v CU both in 2021.

The end conclusion is that in general the usual principles (called Barder principles after the case in which they were established) applying to applications to set aside continue to apply. These are:-

-        New events since the making of the order which invalidate the basis of the order or assumptions upon which it was made

-        The events must have occurred within a short time of the order

-        The application to set aside must be made promptly

-        If granted the application must not prejudice a third party

In addition the potential applicant must have no other method of dealing with the problem.

HW v WW was the first of the two cases to be decided. The court accepted that in principle the relatively sudden and world wide nature of Covid was more akin to a war scenario than a “simple” economic problem. As such it is potentially capable of being used to re-open a case although in that case it did not.

However the focus of the court is to be on the economic impact of the event in the particular case  rather than its cause against a background of the public interest in giving finality in litigation. The later BT v CU case said that Covid is “probably not” a justifiable reason for re-opening. It may have caused a company to have great difficulty but even failure of a company due to any given cause is always a risk.

There are further hurdles…….including:-

-        The need to prove that a set aside is justified

-        The overall discretion of the court

The conclusion seems to be that although superficially attractive the potential argument that Covid might serve to overturn courts orders is far more difficult to establish that it might seem at first sight.

For advice on this, or any other family matter, contact the FamilyTeam on 01905 723 561 or email: joanna.gardner@smesolicitors.co.uk

Added: 14 Feb 2022 14:56


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