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Family Law

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02 APR 2013

The variability of lump sum orders

Michael Horton

Barrister, Coram Chambers:

Can the court ever vary the total amount payable under an order for a lump sum payable by instalments?

A divorce settlement involves the payment of money over time.  The payee may be keen to have this drafted as an order for 'lump sums' to ensure certainty of entitlement to the money (s)he bargained to receive.   The forthcoming case of Hamilton ([2013] EWCA Civ 13, [2013] 1 FLR (forthcoming), in which the Court of Appeal heard argument on 6 December 2012, may shed some light on whether, and in what circumstances, the parties can ask the court to make such orders.

This article seeks to look at one of the reasons why orders for lump sums are sought.  Such orders cannot be varied as to either quantum or timing.  The alternative, an order for a lump sum payable by instalments, can be varied.  Of course, the court can vary the timing of instalments, and the arrangements for security.  The existing case law suggests the court can also vary the total quantum payable, invariably by writing off unpaid instalments that the payer can no longer afford.  This article seeks to argue the existing case law is wrong, and that the total payable under a lump sum payable by instalments should never be varied.  A clean break should be a clean break.

The full version of this article appears in the April 2013 issue of Family Law.

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