When couples divorce and endeavour to resolve financial matters, one party may be concerned that the other party will not give full disclosure of his/her financial position to the Court. This concern is heightened when one party has historically dealt with all financial matters during the course of the marriage to the exclusion of the other, or where businesses, or complex pensions, or foreign assets are involved.
Whilst the starting point is usually to try and resolve financial matters through negotiation outside of court, once Divorce proceedings have been issued, a party can apply to the Court to ask the Court to decide financial matters. Even if court proceedings are commenced, it is still open to the parties to reach an agreement at any point up to and including at the final hearing.
When one party asks the Court to become involved in financial matters, the Court will Order both parties to give full disclosure of their respective financial positions, by completing a Form E. Both parties must send a copy of their Form E to the Court and the other party. This financial disclosure is necessary to enable the Court to decide what an appropriate financial settlement would be in the absence of an agreement reached by the parties. Even in situations where negotiations are taking place, there is a need for an exchange of financial disclosure, so there is full transparency as to respective financial positions, and both parties can seek accurate legal advice as to what a fair settlement would be.
What is the position if one party does not fully disclose his/her financial position?
The Court can make various Orders to ensure disclosure takes place. These include attaching penal notices to Orders made by the Court requiring a party to provide information and documents. If the Order is still not complied with, an application to commit the non-disclosing party to prison can be made. Where there are systemic and repeated breaches of Court orders made in financial remedy proceedings, the Court is prepared to order the ultimate sanction of imprisoning a party as it did in the case of Hart v Hart in 2018. In that case, the husband, who was 83 years old and in poor health, breached numerous Court Orders resulting in a High Court Judges’ decision to send him to prison for 14 months for contempt of Court. Even in situations where the Court do not take such steps, negative inference is usually drawn from non-disclosure, and the court can make final orders that are unfavourable to that party. Non-disclosure can therefore have very serious consequences.
If you are contemplating issuing divorce proceedings and you are concerned by your spouses’ approach to financial matters, it is imperative you seek specialist legal advice.
How FJG can help
Tom Joyce is a Solicitor in our Family Law Team, specialising in children disputes, divorce, and financial matters arising upon divorce.
For further advice on the above subject, please contact us on 0845 543 5700, or via our online enquiry form.