Can a financial settlement be overturned if there is evidence of fraud or material non-disclosure?

10 June, 2015
by: Cripps Pemberton Greenish

The Supreme Court has been a hub of excitement this week with family lawyers eagerly tuning in online to hear the 3 day appeal of the cases of Sharland v Sharland and Gohil v Gohil.

Both cases have been brought to the Supreme Court on appeal from the lower courts and seek to re-open financial negotiations as the initial agreements were reached on the basis of intentionally misleading disclosure by the husbands.

The cases have raised the wider issue of whether the family courts go far enough to prevent non-disclosure and fraudulent disclosure when agreeing financial settlements and whether, by not doing enough to prevent non-disclosure, one party loses the opportunity to have a truly fair trial.

In addition to this, Sharland relates to non-disclosure of finances obtained through criminal activity and the court will need to consider whether a wife can be entitled to a share of assets acquired through criminal activity or whether these assets should reside with the Crown.

The starting point for the division of assets on divorce is usually 50:50 and these cases therefore highlight the importance of full disclosure within the proceedings, as any division will be based on the figure disclosed. This means that there is a huge incentive for the wealthier party to not disclose all of their assets.

The argument is that if there are no repercussions for a non-disclosing party then the court process cannot possibly be fair and disclosure is a somewhat pointless exercise. It is hoped that the court will use this opportunity to review the position and provide clarity on the disclosure requirements.

This case is of great public interest as, if the court re-opens these cases, the floodgates could open to many people seeking to re-negotiate their divorce settlements.

Judgement likely to be given later in the year so watch this space!