Child Care Solicitors

It can be safely assumed that in most cases if Ancillary Relief Proceedings have been issued, one or both parties will suspect that the other has assets or property that they have failed to disclose in a deliberate attempt to defeat their claims.

It is a requirement of the Family Law Protocol that before proceedings are even issued attempts must be made by the parties to clarify their claims and identify the issues between them as soon as possible and to achieve this they must provide full, frank and clear disclosure of the facts, information and documents which are material and sufficiently accurate to enable proper negotiations to take place to settle their differences. Indeed if the parties are seeking public funding they will be required to first attend mediation, which also requires full disclosure to be provided by both parties.

Proceedings are therefore normally only ever issued when one of the parties is not satisfied that the other has provided adequate disclosure of their assets and financial circumstances or the attempts to negotiate a settlement have failed because one or both of the parties believe that they could achieve a better settlement at Court.

After the proceedings have been issued the Court will direct that both parties complete and swear a Financial Statement (Form E), which requires them to give full, frank clear and accurate disclosure of their financial and other relevant disclosure. This duty of disclosure is an ongoing obligation and therefore both parties must disclose any material change in their finances after the Form E has been completed and until the proceedings have concluded.

The duty of disclosure is taken very seriously by the Courts and any deliberate breach of this duty can have very serious consequences on the defaulting party. As the Form E is a sworn document if either party has deliberately lied then this could be treated as Contempt of Court and is punishable by imprisonment or fine, although it is unlikely that such action would be taken.

The most likely means that would be used by the Court to punish someone that has deliberately failed to disclosure information is to order them to pay part or all of the other party’s costs. Where proceedings have reached the Final hearing stage the parties’ costs will have already reached many thousands of pounds and therefore being burdened with the other party’s costs could be a very severe punishment indeed.

The dishonest party also runs the risk of the Court finding that they have lied or deliberately withheld material information and to then draw adverse inferences against them, which could result in the Court finding that a particular asset or property is owned by that party without actually having any documentary evidence to prove it. This would then have an effect on how the available assets are distributed between the parties, as the Court will include the undisclosed assets or property in the matrimonial pot.

It will also seriously damage a party’s credibility if it becomes clear that they have lied or withheld information. Therefore, in a case where one party might be asking the Court to draw an adverse inference against the other, if their own credibility is called into question it is less likely that such an inference will be made.

Even if the dishonest party is successful in concealing assets from the Court at the final hearing any order made can be set aside by the Court if it comes to light that material financial information was not disclosed.

In a nutshell it is important that both parties understand the importance of disclosure when entering into Ancillary Relief Proceedings, as even an innocent and unintentional failure to disclose material financial information could have very serious consequences.

The purpose of this article is not to provide a detailed explanation of the law, but to point you towards some of the issues that you should consider if you are facing a similar situation.

If you require advice please contact our specialist team to assist you