Financial Disclosure And Preserving Assets In Divorce

Year Published: 2017

The issue of false or incomplete financial disclosure within divorce proceedings has recently been revisited in a High Court case. During this case, the Screwfix tycoon, James Goddard-Watts was required to pay his wife an additional £6million, six years after their divorce. The wife successfully argued that the initial financial award of £7million was based upon a false disclosure of financial information by her ex-husband.

Within divorce proceedings there is a strict requirement imposed by the court where it is imperative that all financial information disclosed is comprehensive, accurate and both parties act in a transparent manner.

In a situation where misleading information is provided or there is a failure to disclose substantial assets, the court has the power to re-open the case and to make a further financial order.

What options are available for current, ongoing divorce proceedings?

The above scenario only applies to divorce cases where the financial proceedings have already concluded. But what are the available options for an individual who is currently within financial proceedings and whose former partner is failing to provide a full disclosure of their financial position? Or whose former partner is attempting to dispose of assets to defeat or reduce the value of the others financial claim?

There are various orders that your solicitor can apply for on your behalf, to ensure the court has the full picture to enable it to make an appropriate and fair decision.

What type of orders are available to achieve full financial disclosure?

  1. The Power to make a Search Order. This is used when one party has not disclosed but is believed to possess documents or other material relevant to the financial proceedings and it is believed that they will be disposed of before the matter is dealt with.
  1. A Freezing Order. This is a type of injunction which prevents a party from removing money and/or other assets from the jurisdiction of England and Wales until matters are finalised.
  1. The power to prevent a disposition prior to it being made. E.g. when one party threatens to transfer or spend funds within proceedings. The court can order the individual not to do so or can order their bank, for example, to freeze any such transaction.
  1. The court can also set aside a disposition that has already been made. E.g. when one party transfers assets to a third party where these funds are still available. The court can order the funds to be returned so that they can be utilised within the financial proceedings.
  1. In some circumstances the court can exercise its inherent jurisdiction. This would prevent one party from carrying out an act which may diminish the court’s power to distribute capital or income.

The law relating to these types of applications is complex. If you are concerned that your spouse has or intends to dispose of assets to defeat your financial claim you should seek specialist legal advice.

For more information on financial disclosure or divorce proceedings please contact our Family Law team, 0161 475 7676.

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