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The Penalties of Financial Non-Disclosure

16th October 2015

Anyone involved in resolving financial issues following separation and Divorce is under a very strict duty to make full and complete disclosure of their whole financial position both to the other person involved and to the Court if there are proceedings.

This duty continues until an agreement is reached or a Court Order has been made so any changes that might happen also have to be disclosed.

This duty covers not only what there is in assets, pension funds, liabilities and income but also includes plans to sell assets, for example shares in companies, plans to float companies, plans to live with someone else and plans to remarry.

The Supreme Court has made it extremely clear in two very recent cases involving Mr and Mrs Sharland and Mr and Mrs Gohil that if at a later stage it transpires that one party or another has been guilty of non-disclosure, fraud or dishonesty it is extremely likely that any agreement that has been reached and any Order that may have been made will be set aside and the whole Case reopened.

If that does happen, there will be significant cost penalties for the person responsible for the non-disclosure, fraud or dishonesty.

The only exception to this is where, if the truth had been known, it would have made no difference to the outcome of the case. The burden for establishing that this would have been the case will be on the person responsible for the non-disclosure, fraud or dishonesty.

For further information, please contact head of family department Graham Coy

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