Possible sanctions for not disclosing finances on divorce

Within financial proceedings issued as part of divorce proceedings, the parties both have a duty to provide full, frank and clear disclosure to each other and to the court. The purpose is to ensure that the value of the available resources is confirmed before a decision is made as to how they should fairly be redistributed.

At the outset of financial proceedings, and before negotiations begin, each party should complete a financial statement called a Form E.  This will then be filed at court and served on the other party together with the supporting documents such as bank statements, payslips, and tax returns.

The duty of disclosure is ongoing up to the conclusion of the proceedings.

There is an implied undertaking of confidentiality in respect of all disclosure.

If a party has been materially deficient in the provision of their disclosure, the court may draw “adverse inferences” and order that party to pay a higher award to their spouse and also make a contribution to their costs.

The non-disclosing party could also find themselves on the receiving end of one of the following:

Proceedings for contempt of court.  These can be brought against a party who has done either of the following:

  • Falsely signed a statement of truth on their Form E; or
  • Failed to comply with any orders made by the court during the proceedings to provide disclosure.

In extreme circumstances, albeit incredibly rare, the wrongdoer could face a custodial sentence.

Set aside of financial remedy order.  An existing order from financial remedy proceedings may be set aside if it is later determined that the court would have made a substantially different order, had it known about the non-disclosure.

Adjournment of capital claims.  The financial proceedings could be adjourned if the court concludes that it would be unfair to order a final division of capital due to the extent of the undisclosed assets.

Right to privacy forfeited.  The court could conclude that someone who provides false information is not entitled to confidentiality.

Fraud.  To fail to provide full, frank and clear disclosure can be an offence under the Fraud Act 2006.

In summary, the duty of disclosure is clear and failure to abide by it can lead to serious financial or other consequences.

For advice, please contact us to speak to a member of our Family Team.

Lydia Davis
Solicitor, Family
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This reflects the law and market position at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought in relation to a specific matter.

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