The vast majority of divorce settlements are agreed by parties without formal court proceedings and we encourage divorcing couples to reach agreement to avoid the considerable strain and expense that court proceedings bring. The basic advice solicitors give parties is that they must make full disclosure of their financial situation to each other and financial information has to be given to the court for a judge to be able to consider and approve any divorce settlement.
In recent cases, The Supreme Court has found in favour of wives, Alison Sharland and Varsha Gohil, both of whom applied to the court to set aside divorce settlements reached with their husbands in formal court proceedings. Both husbands intentionally gave misleading information.
In the Sharland case, the husband did not disclose that his company was being prepared for flotation and on that basis the value of his shareholding was substantially more than he indicated. In the Gohil case, the husband said that the vast assets he had were actually being held on behalf of clients. In both cases the court has set aside the original agreements and the cases will go back for re-trials. Whether either Mrs Sharland or Mrs Gohil will actually receive more remains to be seen.
However the decisions have made it clear that parties must make truthful financial disclosure. There is no “get out” clause. Even if one party is on notice about non-disclosure that does not exonerate the other party. The court has also endorsed the principle that parties should try to settle by agreement rather than going to court. Just because your solicitor is asking for documentation to understand what you have discussed and perhaps even agreed, it does not mean that we are not trying to settle on the best and most efficient terms. Both parties need to understand it is fundamental to be open and honest about their circumstances.
If you need help or advice in connection with divorce or financial matters please contact one of the Family Team.