What can I do if my spouse is not disclosing all their assets during our divorce proceedings?

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During financial proceedings in divorce cases, both parties will be required to make a full disclosure of their assets. This enables the Court to consider all relevant assets and therefore distribute them fairly. However, in some cases, one party may try and hide assets, or not be fully accommodating to provide full disclosure of their assets. This will undoubtedly lead to an increase in legal costs.

Typical examples of the kind of behaviour we see is moving money out of joint accounts and into sole accounts which the other spouse has no access to, settling assets into Trusts, reducing company income and generally failing to disclose assets. We often see financial disclosure which does not accurately reflect current or matrimonial lifestyle. In some cases, one party may have taken control of all the finances leaving the other in the dark as to the extent of the matrimonial assets.

Case Law

Rothchild v De Souza [2020] was a recent appeal case which set out the correct approach when considering how to treat conduct within divorce and finance cases. The husband in this case frustrated proceedings and caused unnecessary costs for the parties because he did not provide full disclosure and transferred property out of his name before the hearing. The Judge described the husband’s behaviour as “destructive litigation” and therefore directed that the wife should receive a larger settlement due to his conduct in the proceedings.

Often when there are not enough assets to meet the party’s needs, the Court will not make matters worse by allowing conduct but this case clarified that even where needs are an issue, conduct can and will be taken into account when determining the distribution of the parties’ financial resources.

If costs are accumulated due to non-compliance, the Judge may well make the non-compliant party cover the unnecessary costs they have incurred by prolonging proceedings as well as departing from a division of equality.

How IBB can help you:

If you believe your former spouse is not disclosing all of their assets during proceedings, a careful approach is needed to ensure that the best outcome is achieved. In the majority of cases our family lawyers will suggest disclosure of assets on a voluntary basis. However, where you suspect that your spouse may not disclose their assets fully, it is best to issue proceedings so that you have the ability to ask the Court to impose sanctions for non-disclosure. It is sometimes necessary to ask the Court to attach a penal notice to the requirement to file financial disclosure and in extreme cases, persistent breaches of Orders can lead to their committal to prison. Rarely used but a good tool in your arsenal to combat non-disclosure. Such conduct can also impact the overall division of assets to the detriment of the non-disclosure.

There are also Orders which can be made to force third parties to disclosure their assets, for example new partners. Third party disclosure Orders can also be obtained against Company Directors and banks if the Court can be convinced that such information is fundamental to the disposal of the proceedings.

Consideration will need to be given to joining third parties to the proceedings, such as banks, Trustees or family who may have an interest in matrimonial property. Such steps will however increase costs and expose you to the risk of costs orders being made against you.

Also, new costs rules have recently been imposed which places a burden on parties to negotiate reasonably. Failure to do so could also result in costs Orders against the party who fails to cooperate.

At IBB, our family lawyers will provide continuous support during your divorce. We will provide professional knowledge throughout and use our interpersonal skills to adapt to your individual circumstances.

Our family team will adapt to your specific situation and ensure they get the best outcome for you.

Speak to our Family Law specialists

Jolene Hutchison is a Partner in the family team and can be contacted on Jolene.hutchison@ibblaw.co.uk

IBB Law’s family law practice can provide expert advice on all family law issues. To contact the family law team please email divorce familylaw@ibblaw.co.uk  or call 03456 381 381.