Dishonest disclosure punished in Divorce Proceedings

The Supreme Court of the United Kingdom has made it very clear, in its ruling in the cases of Alison Sharland and Varsha Gohil, that if a spouse deliberately fails to disclose all income and assets during divorce proceedings, then the financial settlement could be overturned if the deception later comes to light.

Not only will a ‘lying spouse’ face having to handover a larger portion of assets in a subsequent settlement, there will also be further consequences in terms of having to pay all the costs of having the case reheard. Both Sharland and Gohil will now see their cases go back to the High Court to be re-examined and could have large payouts on their way.

This isn’t the first time the family court has taken a strong stance on the issue of wilful non disclosure. In the case of Young v Young, Mr Justice Moor jailed Scot Young for a ‘flagrant’ contempt of court for ignoring an order to disclose, in what was a long-running financial remedy proceedings with his estranged wife Michelle Young.

His, and Messers Sharland and Gohil’s problem, was the failure provide a ‘full and frank’ financial disclosure that details all the marital financial assets. Both parties must complete what is known as Form E, with details that set out the honest financial position, and provide supporting documents as evidence. Anyone that sets out to hide income or assets, following this latest Supreme Court decision, will be at risk of protracted legal proceedings if they are later found to have been lying.
Sharland and Gohil say they fought this case to establish the principle. It’s likely that most people believe that decision to be right, after all, why should liars and cheats prosper? But what does this mean for other divorcing couples?

The hope is that the ruling will deter spouses from hiding or misrepresenting their financial affairs in the first place, and that it will provide some recourse for those who feel they have been misled and, ultimately, received an unfair payout.

Will it open the flood gates to new cases brought by those who say their ex-husband or wife lied? Probably not. Both Sharland and Gohil had strong evidence to prove their extremely rich husbands had misrepresented the value of their assets, so the Supreme Court decision merely determined that their previously closed cases could be reopened. Most people who suspect their spouse has hidden assets may find it a difficult assertion to prove, and the courts will be quick to dismiss cases without hard evidence and weed out those deemed to be on a ‘fishing expedition’.

An experienced divorce lawyer will be well placed to evaluate any evidence-bases suspicions held by a spouse, post settlement, and will be able to advise the extent to which bringing action to reopen the case would be beneficial for the claimant when the overall financial – and emotional – considerations are taken into account.

For further advice or information contact our family team on 01772 555 176