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Owed a Bigger Divorce Settlement?

View profile for Julie Bailey
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A landmark ruling in the Supreme Court, involving two women who felt they had been lied to by their ex-husbands about their financial status, could result in many other recently finalised cases being reopened.

Alison Sharland, who accepted £10m in her divorce three years ago, and Varsha Gohil, who got £270,000 and a car in 2004, accused their former husbands of hiding the extent of their wealth at the time of the hearings.

In the Sharland case the court ruled that there was a deliberate intention to conceal by the husband. In the Gohil case the husband was elusive and the wife had suspicions that he hadn’t fully disclosed his financial circumstances.

In both cases, lower courts ruled that the men had not fully disclosed their assets but nevertheless could not reopen the divorce agreements. The two women will now be able to seek new settlements.

So what is the fall-out of this ruling? To be honest, nothing much has changed as it has always been an underlying principle of the court process that the court has to consider all the circumstances of the case when deciding a financial claim. However, in order for it to do so the parties must disclose their circumstances fully. As a specialist family solicitor I am always telling my clients that they must make ‘full and frank disclosure’.

What these cases do make clear is that if a party does not give full and honest disclosure there is a ticking time bomb and the other party may, if they discover the true position, set aside an order even if it was made by agreement and even if the other party had their suspicions about their spouse’s honesty. Notably, there is no time limit on that and the presence of fraud by one party can unravel everything.

The court has also made clear that if the non-disclosure is inadvertent, the burden will be on the party alleging the non-disclosure to prove that it was material, or in other words, that had the information been known, it would have made a difference. If the non-disclosure is deliberate though, it will be assumed it is material and it will be for the person who has sought to hide the full extent of their assets to prove that had they not done so, it would not have made a material difference to the outcome.

Just like the Vince v Wyatt case earlier in the year, where Kathleen Wyatt was seeking £1.9m from Ecotricity millionaire Dale Vince, who set up his company after the pair had split, this cases re-emphasises the need for there to be a properly negotiated and agreed financial order.

Couples need to be aware that the finalisation of the divorce, i.e. decree absolute, does not deal with or end their right to pursue a whole raft of financial claims that they have against each other as a result of being married.

Although these cases do not change the law, they clarify and re-enforce it. They also demonstrate the extremely wide and far reaching discretion the family courts have when dealing with financial matters as a consequence of their obligation to consider all the circumstances of a case. As I always tell my clients – if you want to be certain of finality there has to be an open and honest exchange of financial information. Furthermore, if you have been divorced but have not got a financial order, speak to a specialist family solicitor!