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Financial disclosure now vital in divorces, Harrowells warns

THE full disclosure of total assets in all divorce cases – not just involving the very wealthy - is to become crucial after two women won a landmark decision in the Supreme Court in October, a specialist divorce lawyer warns.

People who mislead the courts and their spouses by concealing assets in divorce cases so a fair settlement cannot be reached, risk ‘punitive settlements’ in re-hearings and being reported to the police for perjury, says William Hope Kaye, a partner at Harrowells Solicitors, York.

His warning follows a ruling that two wives can return to the High Court for a re-hearing on the financial settlements of their divorces because their husbands had misled them and the court about their assets. Earlier Court of Appeal decisions said that, while the husbands had not provided the full financial picture, the agreed settlements should stand as the court would not have ordered different ones if truth had been known.

Ms Sharland, 48, Cheshire, believed the £10m settlement she accepted from her husband Charles, a software entrepreneur, represented half of his wealth. It later became clear that he had lied about his company’s value, which the financial press estimated at £600m, when the figure used in the divorce was £47m.

Ms Gohil, 50, London, divorced her husband Bhadresh in 2002 and received £270,000 and a car. In 2010, Mr Gohil was convicted and jailed of money laundering. At his criminal trial, evidence showed he had failed to disclose his true wealth during divorce proceedings.

William Hope Kaye, an accredited specialist member of Resolution for advanced financial provision and international child abduction, says “The latest judgment says ‘fraud unravels all’ which means that, where misrepresentation is discovered, any agreed settlement will be set aside unless the ‘fraudster’ can show that the fraud would not have affected the award. It shifts the burden of proof on the fraudulent party to establish this, which for most cases, will be very difficult to do.

“Although this ruling has been claimed to ‘open the floodgates’ for wives to go back to court and seek an improved settlement, it may only be a small number of cases as most people who have endured this distressing process won’t want to do so again.

“The judgment is more pertinent to all new divorce cases where there will be far greater emphasis on providing full financial disclosure given the enormous consequences of not doing so, including being landed with the other party’s legal bill.

“Those who lie about their wealth, even if it is not substantial, risk having ‘punitive settlements’ placed on them and being reported to the police for perjury while those seeking a divorce and their lawyers have far greater incentive to investigate the truth worth of their spouse.”

Harrowells Solicitors offers a wide range of legal services to commercial, farming and private clients. The firm has three offices in York and others in Pocklington, Easingwold and Thirsk.

This was posted in Bdaily's Members' News section by Mike Clarke Communications .