The very serious repercussions of financial non-disclosure

Friday, 23 December 2016 | Kirsty Clifton

When parties divorce or separate, one of the most difficult aspects that lawyers are required to assist with is the division of financial assets.

Regardless of whether Court proceedings are issued or the parties are attempting to negotiate a settlement with assistance, at Ascot Lawyers we always recommend that both parties engage in a process of full and frank financial disclosure.

This financial disclosure usually involves both parties completing a Form E. This is a comprehensive form which requires details of each party’s assets, liabilities and income with supporting documentary evidence.

The Form E contain a Statement of Truth which each party is required to sign. This confirms that each party believes the facts that they have stated in their Form E are true and that the information they have provided is an accurate disclosure of their circumstances.

The recent case of Goddard-Watts and Goddard-Watts [2016] EWHC (fam) illustrates that there will be repercussions for financial non-disclosure and dishonest disclosure.

In this case, the Wife agreed a settlement in 2010 despite her lawyers considering that she had did not have full disclosure of the family’s assets. The Wife however wished for matters to be resolved quickly so a settlement was agreed.

It transpired some two years later that two trusts within the family assets had increased in value worth significantly due to circumstances that the Husband had known about prior to the settlement and further that the Husband had not disclosed that he was a beneficiary of the trust. 

The Wife issued further Court proceedings. In 2015 the original Order reflecting the agreed settlement was set aside. The matter was reheard in 2016 where the Wife received a further lump sum to reflect the amount she should have received in 2010 if the Husband had provided accurate financial disclosure.

So what we can learn from this?

Firstly, if you are engaging in the financial disclosure process, you must ensure that you provide accurate and honest information. If you do not, there is a real chance, that even decades later, a settlement may be set aside and a new Order made, if your spouse is able to prove you were dishonest or inadequate in your disclosure. There can also be serious legal costs involved to defend such a case.

Secondly, the importance of insisting on financial disclosure before agreeing to any settlement. At Ascot Lawyers we understand that following the stress of a separation, it is tempting to try and agree financial matters as quickly as possible to save time and money. However this can often backfire with serious long term consequences. If you later find out about family assets that you could have been entitled to, the road to set aside an Order and obtain a new settlement is an expensive one. It is considerably cheaper to ensure you have the accurate facts before a settlement is agreed.

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