The Office for National Statistics recently reported that divorces fell by 4.5% in 2020. That is not to say that the number of divorcing couples was low in 2020; 103,592 decree absolutes were still granted in England and Wales that year, but as with everything else, the pandemic had far-reaching and unexpected effects on the divorce industry.
In the months following the government’s announcement of a lockdown, new referrals ground to a halt across the industry as couples and families stumbled to figure out exactly what lockdown would look like for them. This proved to be a double-edged sword. For some, lockdown was a welcome pause to ‘normal’ life. It meant swapping time in the office and on business trips for quality time with partners and children. For others, the absence of a work and social life outside of the family home highlighted underlying cracks in their relationships that were previously easy to ignore with distractions such as extramarital affairs and travel. HNW individuals were not exempt from these pressures. Their coping mechanisms, however, were arguably less limited than “let’s try to make this work”.
In our experience, relationships break down for a variety of reasons, but often there has to be a “stick” and a “carrot”. During the pandemic, the stick became bigger and more painful but the carrot (whether the ability to escape the unbearable atmosphere at home or having a fling at a conference) disappeared.
We therefore saw a trend in couples having to ride out the pandemic away from their family homes in England, in countries where they had the benefit of more space and where limitations on daily life were less severe. We saw other couples spend lockdown entirely apart in different homes and, in some cases, in different countries. The decision to be together in a less stressful environment, or to be physically separated entirely, made it possible to put divorce on the back burner while we all waited in limbo to see what the virus’ next move would be. Then of course, there were the couples who used the pandemic to leave England altogether, thus calling their ties with this jurisdiction into question whether in the context of divorce or otherwise.
For existing clients who found themselves mid-divorce when the pandemic struck, lockdown presented new obstacles to progressing matters to decree absolute. The problem was threefold. First, the courts (already in a dire state pre-pandemic) took a while to work out the kinks of remote hearings, e-filing and the rest. The most urgent cases, typically involving children or domestic abuse, had to be prioritised during this time which, whilst clearly correct, led to an administrative backlog on matters considered to be less urgent. Second, almost every business faced a degree of uncertainty in lockdown, even if only initially. Some clients took a cautious approach to market fluctuations, wanting to delay matters for as long as possible while they waited to see how things would unfold. Others sought immediate valuations / revaluations of their assets, hoping to depress the final bottom-line figures. This inevitably held up settlement, not least because the experts themselves were trying to figure out how to do their jobs in unprecedented circumstances. The third and final problem was the decline in success rates of private settlement hearings (known as Private FDRs). While these hearings continued over Zoom throughout lockdown, settlement rates dropped significantly as the psychological factors which usually attribute these hearings with such success were stripped away. The stakes simply did not feel as high to clients over Zoom as they do during in-person negotiations, making it easier to walk away from good deals.
The pandemic also threw up a variety of issues for children of separated families. Parents were justifiably more anxious than usual and differing attitudes towards lockdown restrictions presented the perfect cocktail for disagreement. Many HNW individuals had the unique ability to travel during lockdown (whether by private means or otherwise), meaning disputes over living arrangements were not only about which home a child would be in that night, but often, which country. We saw parents wishing to relocate temporarily and permanently to other countries during the pandemic and others (whose children did not live with them) wishing to fly their children back and forth to see them in whatever country they chose to call home during the pandemic. In both scenarios, health concerns and testing and quarantine requirements added several more complexities to already strained co-parenting relationships.
A new ‘normal’ has now taken effect which begs a multitude of questions for the immediate future. Will there be more divorces than ever before as couples “break free” from lockdown? Will the divorces get uglier as resentment has had two years to build? Will we see a flood of couples returning to the UK now that restrictions are at their lowest level yet? What approach will parents take to vaccinating their children? Whatever the answers to these questions, a repeat of the 2020 statistics seems unlikely.
Read Alex and Stacey’s article in ThoughtLeaders4 HNW Divorce.