10th March 2010

The Financial Times reports that divorce lawyers in London have seen a "huge rise" in applications for financial settlement variation orders from divorced city financiers who have either seen their bonuses cut or have lost their jobs over the last 18 months.

In cases where future bonuses were factored into a divorce financial settlement order to calculate maintenance payments and these are now not being paid by employers, many bankers are finding it necessary to seek to vary orders downwards.

Some family law firms have seen such applications double in recent months, particularly amongst those spouses who did not have enough capital to facilitate a "clean break" lump sum payment to a spouse.

The FT report cited one case of a London executive who had been earning £1.5m at the time of his divorce, and whose periodical payments had been set at £10,000 per month in respect of maintenance for his former wife and children. However, having lost his job and after setting up a new venture he sought to vary the payments to £1,000 per month in the interim.

According to divorce lawyers, judges are beginning to be more understanding of the difficulties faced by city workers who have lost major sources of income through the recession.

Whereas, in the past, a variation order request may have been met with scepticism, it is now very apparent why so many divorced husbands are seeking the reductions and the courts are generally being more sympathetic.