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Divorce and Financial Disclosure

View profile for John Boon
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When a couple resolve financial matters at the end of their marriage or civil partnership, then it is necessary for both parties to provide full and frank disclosure of their financial circumstances.

One or both of the couple often remain sceptical that the other is being honest with their disclosure. That suspicion can then result in them helping themselves to the other’s financial information and documents, or making allegations that their partner is hiding income, capital or pensions.

This article deals with the first response: self-help to information. We will look at allegations of hidden assets in our next article called “Show me the money.”

The definitive case dealing with disclosure and self-help to documents remains the appeal decision in the 2010 case of Imerman v Tchenguiz

This judgment overturned what had become the accepted behaviour that preceded it. Conventional wisdom had evolved that tolerated one party searching out, copying or even removing financial information belonging to the other party.

The self-helping party’s actions would not be criticised or punished as long as no criminal damage had been done in obtaining the information.  In essence, as long as the information was not under lock and key, and no filing cabinets had been forced open, then it was thought to be fair game to being found and accessed by the other party.

The problem with this approach is that it completely disregarded the owner’s privacy.

The attitude before Imerman v Tchenguiz was that the ends justified the means. If a partner’s privacy had been breached then that was the price to be paid for ensuring that full and frank disclosure was implemented.

Imerman changed all of that by reasserting the fundamental rights to, and principals about, privacy.

The courts clarified that neither party was to access, copy or remove private information which belonged to the other. Just because a husband or wife has an obligation to disclose financial information does not mean that they lose the right to privacy in that information or documentation.

The private nature of a document or piece of information was redefined. Private no longer meant “Was it kept under lock and key or password protection?”  Instead, private now means “Does the owner of the information have a reasonable expectation of privacy?” Imerman found that when it comes to managing one’s personal life, including finances and business dealings, then such an expectation did exist. That privacy is not lost just because the couple are married, nor is it lost just because the owner of the information or documentation is obliged to share the information within any divorce financial application.

Imerman explains that what is and is not confidential will vary from case to case depending upon the facts.

If a husband leaves his bank statements lying open on the dining room table, for example, it will be harder for him to claim an ongoing expectation to privacy. If he has taken some effort, however, to keep them discrete, then his expectation is greatly enhanced. For example, if he has a concertina file with his financial documents in it, then this is likely to help him, even though it is just a paper file with no lock on it.  Similarly, if bank statements are left on the dining room table but are unopened, then the expectation is likely to still have remained.

If the couple share a study and papers are left on view, then the expectation of privacy may be undermined. On the other hand, if they each have separate studies, even if they are not kept locked, then an expectation of privacy may remain.

The Imerman decision sets out that the potential punishments to be found in criminal and civil law for wrongfully accessing another person’s private information or documentation still apply to family law cases. 

The practical implications for parties going through divorce are clear:

  • Actively resist the temptation to seek out or access financial information or documents belonging to your partner – you will be surprised at how strong that temptation is
  • If you come across information or documentation belonging to your partner, then recognise that it is still possible that they have a reasonable expectation to privacy in relation to such information or documentation. Even in these circumstances, you should not access or read the information or documentation. This applies, for example, when post addressed to one party is sent to the family home even after they have left. Genuinely opening the letter by mistake is one thing, but then going on to read the entire contents of the envelope and handing them to your solicitor is another matter
  • Be aware that if you hand to your solicitor confidential financial information or documentation belonging to your partner, they will be obliged to tell the other solicitor and send all originals and copies to them. They will not be allowed to read the information or documentation
  • In some extreme cases you could lose your solicitor; an application could be made to the court to prevent your solicitor from continuing to act for you if the breach of privacy is serious enough

If you have knowledge or suspicion that something is not being disclosed, then the proper way to deal with the issue is to ask questions about it. This might be done in response to the exchange of financial statements (Form E), or by way of specific applications to the court for additional information or documentation to be provided. 

You are still allowed to rely upon your own recollection of this information, even though it is private to the other party.

For example, a husband or wife might recall their spouse talking to them about an off-shore account, or a second pension fund. They might have previously seen information about it during the relationship, or remember having signed documents in relation to an investment.

It will be necessary to demonstrate why there is a reasonable suspicion that there is undisclosed information being withheld. The more detailed your recollection is about the conversations you previously had or the documents that you have previously seen, then the more likely your application is to succeed. The court is unlikely to allow requests for information that are speculative, or what the court often refers to as “fishing expeditions”. There has to be a reasonable basis for the request.