One of the most common concerns after a divorce settlement has been reached is what happens if property prices fall, investments lose value, or a business performs worse than expected. It can feel deeply unfair if an asset that was once worth a substantial sum is worth significantly less only months later.
However, the law in England and Wales generally prioritises certainty and finality over revisiting financial settlements every time circumstances change.
The Importance of Finality
The family courts place great importance on the principle of finality. Put simply, when parties reach a financial settlement, the aim is to bring financial claims between them to an end so both can move forward with certainty. This principle is fundamental to the operation of the family justice system. If settlements could be reopened whenever property values rose or fell, very few financial orders would ever truly be final.
For this reason, courts are generally reluctant to revisit agreed settlements or final financial remedy orders simply because one party later regrets the outcome or because the value of assets has changed.
What Happens If Property Prices Fall?
Consider a common scenario.
A husband agrees to keep an investment property valued at £500,000, while the wife receives other assets of equivalent value. Six months later, the property market declines and the investment property is worth only £400,000.
Can the husband return to court and ask for the settlement to be changed?
In almost all cases, the answer will be no.
The courts generally view changes in market conditions, investment performance, and property values as part of the ordinary risks of ownership. When a settlement is reached, each party effectively accepts those risks. A subsequent fall in value does not usually provide a legal basis for reopening the agreement.
The same principle applies to:
- Shares and investment portfolios
- Cryptocurrency holdings
- Buy-to-let properties
- Businesses and company shareholdings
- Commercial property investments
Market fluctuations are considered a normal feature of asset ownership rather than an exceptional circumstance justifying a second bite at the cherry.
What Does the Law Say?
The statutory framework under the Matrimonial Causes Act 1973 allows certain financial orders to be varied after they have been made, particularly ongoing maintenance arrangements. However, the legislation does not generally allow courts to revisit final capital settlements or property divisions simply because asset values change over time.
This distinction is important.
While maintenance payments may sometimes be adjusted if circumstances change, a final division of property is usually intended to remain exactly that: final.
Are There Any Exceptions?
Although finality is a powerful principle, there are limited circumstances in which a financial order or settlement can be challenged.
Examples may include:
Fraud
If one party deliberately concealed assets, provided false information, or otherwise misled the court or the other party during the proceedings, the court may be willing to revisit the settlement.
Material Misrepresentation
Where a settlement was reached on the basis of information that later proves to have been fundamentally inaccurate, the court may consider whether the order should be set aside.
Procedural Unfairness
In rare situations where there has been a serious procedural defect affecting the fairness of the proceedings, the court may intervene.
Significant New Evidence
The courts have recognised that genuinely transformative new evidence may justify revisiting a case. However, the threshold is high. The evidence must be so significant that it fundamentally changes the picture presented to the court.
Importantly, a simple fall in property prices, stock market losses, or a decline in business performance will rarely satisfy this test.
Why the Courts Take This Approach
The courts recognise that every asset carries risks. Property values can rise or fall. Businesses can thrive or struggle. Investments can perform better or worse than expected.
If every subsequent change in value allowed parties to reopen settlements, divorce proceedings would never truly end. The courts therefore strike a balance between fairness and certainty, with certainty usually prevailing once a final order has been made.
As a result, the law generally leaves parties to live with both the benefits and burdens of the bargain they agreed.
Practical Advice
Before agreeing a financial settlement, it is important to:
- Obtain up-to-date valuations of significant assets.
- Ensure full financial disclosure has been provided.
- Consider the future risks associated with retaining particular assets.
- Take legal advice on whether a proposed settlement remains fair if market conditions change.
Careful planning at the settlement stage is usually far more effective than attempting to challenge an order later.
Conclusion
The short answer is that a financial settlement cannot usually be reopened simply because property, investments, cryptocurrency, or business assets have fallen in value after the agreement was reached. The courts strongly uphold the principle of finality and expect parties to bear the ordinary risks associated with the assets they receive.
Only in exceptional circumstances, such as fraud, material misrepresentation, or serious procedural unfairness, will the court generally consider setting aside a financial settlement. A disappointing investment outcome or a falling property market will rarely be enough.
For anyone negotiating a divorce settlement, the message is clear: ensure the agreement is properly considered at the outset, because once a final order is made, the opportunity to revisit it is likely to be extremely limited.