Financial Disclosure in a Divorce – Divorce Solicitors.
Whenever anyone goes through a divorce, they will have financial matters that should be addressed. Not least because the financial claims available to a husband and wife do not end on divorce. As a result, one of the first things I discuss with clients who are looking to divorce is the need for financial disclosure. So, what is financial disclosure in a divorce? Why is it important?
What is Financial Disclosure in a divorce?
In short, financial disclosure in a divorce is when spouses exchange information about their financial circumstances.
How is Financial Disclosure exchanged?
Spouses can exchange Financial Disclosure in several ways. This includes:
- Directly.
- In mediation.
- Through solicitors.
- During Court proceedings.
Are there specific forms for Financial Disclosure?
Yes. Although it should be noted that there are varying levels of disclosure.
Full disclosure.
Firstly, Form E is the form used for full disclosure. In Court proceedings, each party must complete Form E. This is a 28-page document. The form requires the parties to include full details of their financial circumstances. The parties must also provide full supporting documents.
Once the parties exchange Forms E, they can raise questions and request further documents from the other if needed.
Minimum disclosure.
Secondly, as a minimum, a Statement of Information for a Consent Order form (Form D81) is needed. By contrast, this form gives an overview of each spouse’s financial circumstances. The parties must complete Form D81 when they send a Consent Order to Court.
Limited disclosure.
Alternatively, the parties can agree to exchange disclosure somewhere between the two forms.
That said, it is always recommended that full disclosure be exchanged. This provides you with the most reassurance you have all the information needed to consider your options. It also enables you to receive the best advice available.
When is full disclosure needed?
Technically full disclosure is only required once one party makes an application to Court. Outside of Court proceedings, the parties can agree to a lesser level of disclosure. This is provided that the parties complete Form D81 when they send a Consent Order to Court.
However, it is always advisable to exchange full disclosure. In any scenario, the parties need to be confident they have a good grasp of the others financial information.
Why is full disclosure important?
The law for finances on divorce is discretionary. Above all, the Court aims to achieve fairness. Consequently, the Court considers all the circumstances. Then the Court decides each case on its own facts. Therefore, the Court (and parties) need disclosure to consider what a fair and reasonable division is. Any missing information can affect the outcome. Also, it can help uncover any suspicious transactions or hidden assets.
As a result, the disclosure process ensures the parties have a clear and full picture of the other’s finances.
It should also be noted that a solicitor can only offer detailed advice if full knowledge of both party’s circumstances is known. As a result, the parties will need full disclosure to receive the best advice and to ensure they fully understand their legal position.
Common practice.
It is therefore common practice for the parties to exchange disclosure on Forms E. This is whether the parties are in mediation or being assisted by a solicitor.
Most importantly, whichever level of disclosure is undertaken, both parties should be happy they have sufficient information about the other’s finances. Only then can the parties start to negotiate their financial settlement.
Can a spouse refuse to provide Financial Disclosure?
Yes. But this may not prevent the information from being obtained in some other way. It often simply causes delay and increases legal costs. If a spouse refuses to provide financial disclosure this also ordinarily prevents negotiations. This ultimately stops an agreement from being reached.
When disclosure is not forthcoming, it may be necessary to apply to the Court for Financial Remedy proceedings. Taking the step to start any type of Court proceedings should be seen as a last resort. In my experience, often parties can agree on their financial settlement without the need for Court proceedings. However, non-disclosure may be one reason where proceedings are necessary.
If your spouse is unwilling to provide disclosure you should seek advice from a Specialist Divorce & Financial Settlement Solicitor.
What happens if a spouse fails to provide Financial Disclosure?
Following an application to Court, if necessary, the Court can make any Order it sees fit. The Court can obtain information from third parties. Alternatively, the Court can impose sanctions. In extreme cases, the Court can order costs against the uncooperative spouse. Lastly, the Court can factor the spouses conduct into the asset division.
*Updated 10 February 2022 to reflect the changes in respect of the new Form D81. Last reviewed 8 April 2024.
Get in touch to find out how we can help you with the disclosure process.
Please contact Gemma Keats on 07874349555 or by email to see how she can best support you.
*This article has been produced for general information only. It does not constitute legal or professional advice. Please note that the law may have changed since this article was published.