It is safe to say that this year has been eventful on both a national and global level leading to ongoing concerns around stubbornly high inflation, slowing growth, and ultimate recession. This combined with the Russian-Ukrainian conflict, domestic political uncertainty and the “cost of living crisis” has some calling 2022 an annus horribilis in no uncertain terms. This has presented the divorce industry with unprecedented challenges across asset valuations, division of those assets and complications relating to access to justice.

It is perhaps unsurprising that a common allegation in divorce proceedings is that one party is deliberately undervaluing their assets and, as such, obtaining accurate valuations for a parties’ interests is the starting pointing for any case. However, current market headwinds, ongoing volatility and inflationary/recessionary pressures are providing significant challenges to this computation exercise for individuals and experts alike as snapshots of asset values are not only potentially fleeting in their relevance but also in many cases undeniably depressed.

Divorcing individuals are therefore having to adjust their expectations, and in some cases their standards of living, in response to this economic uncertainty – making settlement discussions more sensitive. This is further complicated by the ongoing and very real cost of living crisis. Surging inflation (and subsequent interest rate hikes) generated by the legacy of Covid-19 and the RussianUkrainian Conflict has generated supply chain disruptions across energy and other commodity markets and had significant knock-on effects on day-today living costs. Every household in the UK has felt this – with the words “heat or eat” unfortunately having been combined to reflect the challenges that millions are facing. From a divorce industry perspective, both recipients and payers of ongoing maintenance have had to re-evaluate affordability, and as a result, we have seen an increase in parties’ income needs and a surge in applications to vary maintenance orders which are no longer viable or fit for purpose.

It can be argued that this stage of the economic cycle is not unique and that we have been here before. However, an unforeseen nuance to divorce proceedings this year has been the effect of the aforementioned RussianUkrainian conflict, which has thrown up issues around access to justice. It is common knowledge that many Russians have close ties to England and that some of England’s highest profile divorces have been between HNW Russian individuals who have chosen the divorce capital of the world as the centre stage for their split. A significant number of law firms have now closed their doors to all Russian corporate and individual clients due to regulatory concerns stemming from the ever-growing and ever-changing sanctions list. This has meant that wealthy Russians, with no connections to the Russian government, have been inadvertently affected and limited in their ability to obtain legal advice.

Individuals with Russian-held interests (whether Russian themselves or not) are also being affected by the ongoing conflict and sanctions. Russian-based assets are increasingly being restricted, as well as depressed, and in some cases moving close to having no value at all as Russia is progressively more ostracized from international trade for the foreseeable future.

It has not all been doom and gloom this year. One post-Covid positive to note is the evolution of a more technologyfriendly court system. The continued use of electronic court documents and the ability to conduct hearings remotely (or in a hybrid manner) is more expedient and cost efficient for individuals and for the courts themselves. It is hoped that this will eventually go some way to assisting with the backlogs which the courts are still coping with post-pandemic.

Looking ahead to 2023, it is likely that we will see a continuation of many of the issues that 2022 has presented. As an industry, we will also have a keen eye to the ongoing debate surrounding transparency. The President’s report, Confidence and Confidentiality: Transparency in the Family Courts, published on 28 October 2021 concluded that “the time has come for accredited media representatives and legal bloggers to be able, not only to attend and observe Family Court hearings, but also to report publicly on what they see and hear.” Despite the opinions of much of our profession, many members of the judiciary are pushing for this approach to be adopted, and so we must begin to prepare our clients for the very real likelihood of their private matters becoming public.

This article was originally published in ThoughtLeaders4 HNW Divorce Magazine. Read the article here, on pages 47-8.