Non-disclosure costs!

Non-disclosure is when you fail to give a full account of your finances and assets, which the court requires in order to make a just ruling on who gets what. There is an

‘absolute bounden duty imposed on the parties to give, not merely to each other, but, first and foremost to the court, full frank and clear disclosure of their present and likely future financial resources.’

(Mostyn J. in NG v SG (Appeal: Non-Disclosure) [2012] 1 FLR 1211))

We have already seen how non-disclosure on a Form E can have serious consequences for the offending party, who might find themselves facing a jail sentence. But that’s not all. Failing to disclose all of your financial details might also lead to an award for costs against you. While costs in finance cases are usually met by each party themselves, an order for costs might be made where there is litigation misconduct – and non-disclosure is a good example of this.

So in the case of US v SR [2014] EWHC 175 (Fam), the wife brought a claim for non-disclosure of assets against the husband.  In the course of the proceedings it was discovered that he misled everyone – not only his ex wife,  her legal advisors and the court – but even the lawyers who were acting for him. The judge ruled that the husband had a duty to disclose and failed in that obligation. In fact, he not only failed to disclose, he also deliberately fabricated false evidence, the consequence of which, the judge has warned, is likely to be an award for costs in favour of the wife.

It might not sound like much of a penalty… until you discover how expensive litigation is, and especially so when a claim of non-disclosure has had to be investigated and results in further litigation. The case  is not yet concluded, but the judge has indicated that because of his ‘appalling litigation behaviour’, the husband is ‘likely to have to bear responsibility for a significant element of the costs incurred’. So he’s no better off for having tried to hide his true financial worth, and on top of that, he’s now potentially facing a massive bill for costs, which currently stand at almost £1m.

If you are in any doubt as to what needs to be declared in order to provide the court with the information that they need, you should take legal advice. Don’t pay the cost for non-disclosure.