Whilst you may not be in Court proceedings (where it is a requirement of the Court to provide ‘full and frank’ financial disclosure), the starting point is always that both parties provide full financial disclosure. If you and your spouse are looking to agree a financial settlement without applying to the Court, then you will need to undertake a process of ‘voluntary disclosure’.
What is financial disclosure?
Financial disclosure is the process by which both parties reveal their financial situations to each other and the Court. This comprehensive disclosure includes income, assets, debts, and expenses, and is a vital step in being able to come to a fair agreement.
Why do I need to give full financial disclosure?
The reason why you need to give full financial disclosure even though you are not in Court proceedings is to ensure that you and your spouse are able to achieve the best settlement possible for you both in your circumstances. It is essential therefore that you both have each other’s full financial information. Even though you will be engaging in the process of voluntary disclosure, this is usually done by each party completing the standard Court issued form called a Form E. This is a very comprehensive form which sets out the full details of your finances with documentary evidence in support. Once you and your spouse have completed your forms, they are then exchanged and you will each have the opportunity to raise questions on the others disclosure. This information then enables your solicitor to be able to fully advise you on the likely outcomes and they will be able to draft an appropriate settlement proposal to put forward to your spouse. It will be very difficult to agree a settlement with your spouse if you do not have the full financial picture – for example, how do you know if the agreement you have reached is fair for you both?
Once you have both exchanged financial disclosure and an agreement is reached outside of Court proceedings, this is recorded within a Consent Order. The Court also requires parties to jointly prepare a Statement of Information Form to accompany the Consent Order. The Statement of Information form records the facts of your case and gives the Court details of your financial position both now and after the Consent Order has been approved so that the Court can decide whether it is appropriate in all the circumstances to approve the financial settlement sought.
Consequences of incomplete or false financial disclosure
Both parties have to sign a ‘Statement of Truth’ within the Statement of Information Form, discussed above, confirming that you have given truthful information. If it is found that you have not, this may be a criminal offence and can have severe legal consequences – you could be found to be in contempt of Court and the Court can impose penalties.
It is also possible for the agreement reached to be challenged later on down the line if one party has been found to not have provided full and frank financial disclosure. A fine or a costs order can be made against the guilty party.
It is extremely important therefore that you make sure to provide full financial disclosure even if you are not within Court proceedings as failure to do so can have significant implications.
If you wish to discuss the financial disclosure process, please contact our Family Law team who will be happy to help.