Non-Disclosure in Divorce

What Is Non-Disclosure in Divorce?

Financial disclosure is the process of giving your spouse or partner, and the court, full details of your personal financial circumstances and your future needs and resources. In financial matters, disclosure is essential whether you use an in court or out of court process to achieve an agreement.

Non-disclosure occurs when one party in divorce proceedings fails to provide full and honest financial information. This can include:

• Hiding bank accounts or property
• Underreporting income or bonuses
• Inflating debts or expenses
• Transferring assets to third parties

In UK family law, both parties are legally required to provide full and frank disclosure of their financial circumstances during financial remedy proceedings.

Why Is Full Disclosure Important?

The court relies on accurate financial information to:

• Ensure a fair division of assets
• Protect the welfare of any children
• Avoid unjust settlements
• Prevent manipulation of the process

Without full disclosure, the court cannot properly assess needs, contributions, or entitlements.

What Are the Consequences of Non-Disclosure?

The consequences of providing inadequate or incorrect information on Form E can be severe, including criminal proceedings under the Fraud Act 2006. The information provided must be verified by the ‘statement of truth’ at the end of the form.

If a party fails to disclose assets, the court may:

• Draw adverse inferences (assume hidden wealth)
• Impose penal notices (legal warnings with consequences)
• Reopen the case (even after final orders, as in Sharland v Sharland and Gohil v Gohil)
• Issue cost orders against the non-disclosing party
• Hold the party in contempt of court, which can lead to fines or imprisonment

Judges take an extremely unfavourable view of the parties who attempt to mislead their ex-spouse and the court about the extent of their assets. If the court determines that you failed to provide a full and frank financial disclosure, this could result in a financial order that you are unhappy with, alongside an order that you are liable to pay your spouse’s costs – and in more serious cases, imprisonment.

Most famously, in the divorce of Scot and Michelle Young, Vardags took over the final hearing and acted for Michelle Young. In this case, Scot Young – the billionaire entrepreneur who refused to provide disclosure or comply with the court – was sentenced to 6 months imprisonment. 

Tools the Court Can Use to Uncover Hidden Assets

FAQs On Non-DISCLOSURE

Q: What should I do if I suspect hidden assets?

Finding undisclosed assets in divorce cases is a serious business that must be done systematically and professionally. The sums can be extremely large - Vardags ultimately obtained an order requiring Scot Young to pay £26 million to his ex-wife, for instance - and can make all the difference in the outcome of a case. At Vardags, we recognise that divorce is primarily a corporate and financial discipline. To lead a forensic financial team, we hired lawyers with corporate law experience as well as a financial/commercial expert to lead the team.

Q: Can the court reopen a case after divorce is finalised?

Yes. If you discover that your ex-spouse hid assets during proceedings, you may be able to apply to set aside the financial order, request a rehearing, recover costs, and seek enforcement or compensation. It is crucial to speak to a solicitor as soon as possible, as there are time limits on doing so.

Need Expert Help?

Vardags’ team of top divorce lawyers delivers a bespoke legal service to HNW and UHNW individuals, their families, and businesses.  We are the only HNW family law firm with an in-house Financial Forensics department. Our team specialises in identifying, tracing, valuing, and forensically reviewing assets, including businesses, property, and investments. 

If you are a high-net-worth individual going through or considering a divorce, it is crucial to have an accurate valuation of all your spouse’s assets. Whether these assets are held in complex international trusts, hidden within investment portfolios, or concealed through intricate share structures, they must be identified and considered for a fair settlement. 

If you suspect your spouse is hiding assets or has failed to disclose their finances, our team of elite divorce lawyers and forensic experts can help. We offer a free initial consultation to qualifying individuals.

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