Written by: Keith Doherty
A YouGov survey conducted several years ago suggested as many as a third of us would hide assets during divorce if we could get away with it. Many family lawyers will tell you that non-disclosure is a factor in a surprising number of divorces. There will always be those who attempt to hide or conceal assets during a divorce. This is because the Court can only award a financial settlement based on the assets that can be identified. However, in the vast majority of cases an individual will not triumph with any such thing, and far from helping their case, their non-disclosure will actually make things very much worse for them.
Full and Frank Disclosure
In most divorce cases, it is normal practice for both parties to complete a financial statement known as a “Form E”. The Form E makes it clear that the parties have “a duty to the Court to give full, frank and clear disclosure of all their financial and other relevant circumstances”. This duty is a continuing one throughout the duration of the proceedings until the Final Order is made. Disclosure of assets is fundamental to divorce proceedings. How can the court decide on the correct settlement if it only has half the picture?
The consequences of hiding assets can be severe: Whatever settlement was reached without full disclosure may be set aside and if an individual is found to have been deliberately untruthful there may be criminal liability incurred as a secondary consequence.
The Court is entitled to make adverse inferences against a spouse if they are uncommunicative or obstructive in relation to the duty of disclosure.
If a spouse has intentionally failed to disclose assets, it will be presumed that full and frank disclosure would have led to a different outcome, unless the non-discloser proves otherwise.
If a spouse has accidentally or negligently failed to disclose assets, it is still for the complainant to persuade the Court that it would have made a difference to the Order.
Agreements and Court Discretion
Divorce settlements made by agreement between the parties (known as “Consent Orders”) are treated no differently to Final Orders imposed by the Judges. The fact that a Consent Order was reached between the parties, does not eliminate the duty of both parties to make full and frank disclosure to the Court.
It’s worth remembering that family court judges have unrivalled experience in cases of non-disclosure. If a lack of transparency by one spouse means it’s impossible for judges to make an accurate calculation of wealth, they have a wide discretion and are astute enough to figure out what is likely to have been concealed – and to draw their own conclusions about the extent of an individual’s wealth.
The Price of Non-Disclosure
Where non-disclosure is suspected, a spouse could pursue a course of action to try to uncover hidden assets, often involving expensive, specialist third parties such as forensic accountants, which will add substantially to their costs and the sheer overall time their legal representatives spend on their case. This requires careful consideration as if no assets are found, it will not only increase the expense but may also have costs consequences that may fall at their feet in the absence of discovered assets, even if that burden is covering the costs incurred by themselves in exploration that proves fruitless. If however, assets are uncovered, the other side will likely face the consequences of non-disclosure in the form of paying their spouse’s costs, based upon litigation conduct.
Above all, divorcees who have not been entirely honest may be at risk of a future application if their former spouse can find enough evidence of a material non-disclosure. Furthermore, there is no time limit on claims being re-opened, though one should always seek advice promptly upon making that discovery.
If you are concerned about a non-disclosure or are contemplating an application to set aside a financial order you should seek specialist legal advice from one of expert family lawyers at Antony Clapp Solicitors. Contact us on 01622 815 940 for a confidential discussion with one of our team.