In family law, especially in financial remedy proceedings, transparency is key to achieving a fair outcome. However, when one party fails to comply with disclosure obligations or is seen to be concealing assets, the integrity of the process is compromised. Associate Solicitor Emily Prince explores how such issues are addressed within the context of family law in England and Wales, as well as the legal strategies available to address non-compliance and asset concealment.
Disclosure obligations in financial remedy proceedings
In the financial remedy proceedings that follow a divorce or dissolution of a civil partnership, both parties are legally required to provide full and frank disclosure of their financial circumstances. This includes details of all assets, income, liabilities, and financial resources. The aim of this is to provide the court with all the information necessary to enable them to make an informed decision fair to both parties.
What’s a Form E, and what information does it include?
The disclosure process typically begins with the exchange of a Form E, a detailed financial statement that both parties must complete.
This form will require you to input information about the following, as well as provide evidence in support:
- Property and other assets;
- Bank accounts and investments;
- Pensions;
- Chattels;
- Liabilities and debts; and
- Income and expenditure.
This form must be completed accurately and fully, as it forms the basis for determining how assets and finances will be divided. A solicitor will need this information to advise you as to what possible outcome could be achieved in your case. Non-compliance or dishonesty in this process can lead to serious legal consequences.
The impact of non-compliance
Non-compliance with disclosure obligations can take various forms in proceedings:
- Failure to submit Form E – A party may delay or fail to submit their Form E, hindering the progress of the case.
- Incomplete or misleading disclosure – A party might provide incomplete information, omit certain assets, or undervalue their worth.
- Refusal to engage or cooperate – A party might refuse to provide additional documents or information when requested, for example, after receiving a questionnaire regarding the content of their Form E.
Such non-compliance not only delays the proceedings but can also prejudice the other party’s ability to decide a fair settlement. The courts in England and Wales take non-compliance seriously, and several remedies are available to address it.
Consequences of non-compliance
The Family Court has wide-ranging powers to deal with parties that are not playing ball and ensure that the outcome is fair for all. Some of the potential consequences include:
- Adverse inferences – The court may assume that the withheld information would have been unfavourable to the non-compliant party, impacting the final settlement.
- Penalties / costs orders – The court can impose financial penalties or orders on the non-compliant party. This could be to pay the legal costs incurred by the other party due to their non-compliance.
- Striking out applications – In extreme and very rare cases, the court may strike out a non-compliant party’s application, effectively preventing them from pursuing their financial claims.
Concealing Assets
Concealing assets in financial remedy proceedings is a particularly serious form of non-compliance. It involves one party intentionally hiding or undervaluing assets to gain an unfair advantage in the division of matrimonial assets. This can include: (a) transferring assets, for example, in other people’s names; (b) undervaluing property or business interests by fabricating these; or (c) hiding any type of income.
In England and Wales, the courts take a very dim view of asset concealment. If discovered, it can lead to significant legal repercussions, including the possibility of revisiting the entire financial settlement as well as criminal consequences.
How can we help
If you are involved in financial remedy proceedings and suspect that the other party is not complying with their disclosure obligations or is concealing assets, it is crucial to seek legal advice as early as possible. Even if proceedings have not yet started, but you want to ensure that all information to be disclosed is available to you, please do not hesitate to contact us.
At Amphlett Lissimore, we can support and guide you through proceedings, and if faced with non-compliance or suspected asset concealment, we would consider the following options as remedies available to you:
- Court orders for specific disclosure – An application can be made for a court order requiring the disclosure of specific documents or details.
- Forensic accounting – We can instruct a forensic accountant to help us trace hidden assets, uncover discrepancies in financial transactions, and provide evidence of asset concealment.
- Freezing orders – If you believe that your spouse is imminently going to dispose of assets, we can help you prevent them from doing so by making an application for a freezing order. This will restrain a party from dealing with some or all of their assets until the court has made a decision.
- Contempt of court – In cases of severe non-compliance or dishonesty, a party can be found in contempt of court, which can result in fines or even imprisonment.
- Revisiting settlements – If concealed assets are discovered after a financial order has been made, the court can revisit the settlement, allowing for a variation of the original order.
About our Family Law team
Our family law solicitors are experts in resolving disputes that may occur throughout the separation process. Whether you are going through a divorce or civil partnership dissolution, we are here to help you. As members of Resolution, we will always aim to resolve issues in a non-confrontational manner, however we are also not averse to utilising the full weight of the court to achieve the rightful outcome.
Further Reading
Supreme Court ruling in Standish v Standish – what it means for wealth and divorce
Why can’t I have custody of the dog?
Divorce Day: Do more people get divorced in January?
Matrimonialisation of Assets: The shifting sands of ‘marital assets’
What counts as matrimonial property in a divorce?
