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Knighthood for life - Sir Fred Goodwin becomes plain Fred

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We have entered a new era in the last week when we found that not only are jobs not for life but nor are knighthoods! Fred Goodwin was stripped of his knighthood which he received for banking services in 2004. He does of course get to keep his pension. He also chose to step down as a trustee from the Queens personal charities save he should cause embarrassment to the Royal Family. So it seems that this was a belated recognition of the 45 billion pound cost to the taxpayer.

The banking crisis has of course taken its toll on many people causing them to lose their jobs or businesses and meaning drastic changes in their personal circumstances for many.

So where does that leave people who thought they had reached a financial maintenance settlement and they now find themselves unable to meet their maintenance commitments or unable to manage on what was originally agreed or ordered. It is hoped that they received appropriate advice when agreeing the order and understood that it could always be varied unlike a clean break order, which dismisses all future claims. Well, they can consider making an application to vary maintenance but this can be a very costly exercise and must not be undertaken lightly.

If you are the party making the application for an upwards variation the difficulty can be if you do not actually know the current circumstances of your former spouse and seeking such information can be expensive and speculative. In considering a variation application, the court would want to look at circumstances such as earning capacity, resources, needs and what has happened since the making of the initial order. Advice should be sought as to the merits of such an application. Initially, negotiations including full disclosure should be undertaken through the traditional route of a family lawyer or a mediator who is also a family lawyer. The mediator can assist the parties to reach an amicable settlement without recourse to the courts.

There has been a trend to increase maintenance upwards or increase the length of maintenance orders where maintenance has been limited by time. The shift seems to be for the paying party to have to argue their case as to why the term should not be extended. In one case the court increased maintenance albeit in a limited capacity even though the spouse had not tried to gain employment and she had frittered her money away on an unwise investment.

If you are paying maintenance and seeking to vary the maintenance downwards there are pitfalls. An application could be made against you to achieve a clean break order by capitalising any maintenance commitment if capital has been acquired since separation. For example a spouse may seek to capitalise maintenance from a large bonus or inheritance received. This might be attractive to a former spouse seeking to remarry or cohabit at some time in the future when his or her maintenance would have ceased or reduced in any event.

So you need to think very carefully when agreeing a financial settlement as to whether you want a clean break dismissing all claims for the future if you have sufficient capital to achieve this. For many this would allow them to move on and rebuild their lives but you must be aware that if you agree spousal maintenance even as little as 5p per year you may face an application at any time in the future and maybe even at retirement or following remarriage.

By family law solicitor, Gillian Davies