The duties and obligations of financial disclosure.
By Tracey Dargan, Partner and Head of Family
If you are applying for a divorce or dissolution of your civil partnership, then you will also need to sort out the financial arrangements between you and your partner.
There are various ways of trying to agree a financial settlement. However, if you cannot reach an agreement then one option is to make an application to court for ‘a financial remedy’. The court will then decide what represents a fair settlement in your case
After the application has been issued, you will both be required to complete a Financial Statement, Form E, which is a document setting out details of your financial situation. You will need to produce supporting documents, such as bank statements, payslips, valuations and accounts. In addition, the court may order either or both or you to provide additional financial information so that there is a clear picture of what finances look like so that a Judge can decide at a final hearing what financial orders should be made.
Within the court proceedings, you both have a duty to provide financial disclosure so that the court is able to make its decision on the basis of all available relevant evidence. If you are represented by a lawyer, then they will also have a duty of financial disclosure. It is therefore important to understand the standards expected of you and your lawyer and at what point the duty ceases to exist. A summary of the position is set out below.
Your duties and obligations
- You have an absolute duty to provide full, frank and clear financial disclosure whether within the context of informal and voluntary discussions and negotiations or as part of financial remedy proceedings.
If you or your partner is in breach of the duty, whether by failing to disclose certain relevant facts and circumstances or actively presenting a false case then the court may set aside the substantive financial order and make a costs order against that party.In addition, other sanctions could include a criminal prosecution or civil contempt proceedings.
- Your duty of disclosure continues until the court makes a substantive order and therefore there is an obligation on both of you to volunteer disclosure of any new information that would affect the courts exercise of its function in determining the financial provision to be made. Your partner does not need to ask for it. It should be volunteered.
- You have a duty to ensure that disclosure is up to date when trying to negotiate a financial settlement. Any material change in financial circumstances must be communicated to your former spouse/partner.
- You should not cherry pick what you want to disclose – to do so is likely to result in a breach of the duty to provide full and frank disclosure.
Your lawyer’s duties and obligations
- Your lawyer has a duty to make an objective assessment of what information needs to be disclosed and must not allow you to provide only such disclosure as you think fit.
- Your lawyer has a common law duty to the court to supervise and investigate the disclosure process and to see that the disclosure process has been complied with. They are also required to take reasonable steps to ascertain the truth of the disclosure.
- If there is new information that materially affects the disclosure provided by you, then your lawyer is duty bound to let the court and other party know.
- Any material changes that occur after the substantive hearing and before judgment has been handed down must be disclosed. The change should be brought to the court’s attention at the earliest opportunity. If this is not done then the court may be misled into making a decision on incorrect facts. It may be that you have experienced a change in fortune or a run of bad luck, either way it should be disclosed so that the court has full and accurate information.
- If you refuse to accept your lawyer’s advice to provide disclosure then the lawyer cannot continue to act.
If you need advice or assistance then please contact our Partner and Head of Divorce and Family, Tracey Dargan.
Please note the contents of this blog are given for information only and must not be relied upon. Legal advice should always be sought in relation to specific circumstances.