Hidden assets and financial settlements

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October 14, 2015

Yesterday there was significant media interest surrounding a recent Supreme Court ruling. Alison Sharland and Varsha Gohil were both unanimously told by the Court that they can have their financial settlements reheard.

Stowe Family Law’s Wetherby-based solicitor Neil Dring was asked to appear on London Live to speak with Reya El-Salahi about the implications of the case.

He said that full and frank disclosures of finances are very important in divorce cases, and that the Supreme Court’s decision proves that people trying to hide assets will not get away with it.

click here to watch Neil’s interview.

 

Transcript
RES:              Reya El-Salahi
ND:               Neil Dring

 

RES:            Neil Dring is an associate at Stowe Family Law and joins me via video link this lunch time.  Thank you very much for joining us, Neil.

RES:            Just how significant is this decision?

ND:             Well it could be very significant going forward for wives, and particularly wives who’ve felt their husbands may have failed to disclose substantial assets.  I have to say that this has been the law for about the last 30 years or so.  In these two particular cases that were dealt with in June and for some strange reason, the High Court and the Court of Appeal upheld previous hearings were it had been decided that the husband had failed to disclose the assets that he had, effectively could get away with it.  In light of his failure to provide information about his finances, Mrs Gohil accepted a settlement which was far less than what she should have got and when she realised that he owned substantially more assets, she tried to appeal against it and for reasons nobody really understands, and in fact the Supreme Court said it was an aberration of the previous courts they upheld the previous agreement.  The Supreme Court has said today that, effectively, husbands can’t get away with lying, they have to make full disclosure and if they don’t, they’re going to have to stand the cost of it later on.

RES:            How much is this a ruling that will only benefit the super-rich?

ND:             Well it’ll not only be the super-rich.  It’s fair to say that it will only be in cases where the outcome will have made a difference.  In these particular cases, these husbands were millionaires.  Those are the sorts of cases that tend to get in the law reports and those are the sorts of cases that the press tend to look at.  But there are other cases which are much lower level assets, but it still needs to be an amount where the difference where what was disclosed and what should have been disclosed would have made a difference to the outcome.  If we are talking about a few thousand pounds here or there in a bank account, that’s probably going to be irrelevant.  But if we are talking about tens or fifty thousand pounds or there about of assets or shares that weren’t disclosed, that may have made a difference to the outcome, so yes, this ruling is going to put everybody on notice that in future husbands will have to beware and make sure they’re making full disclosure and if not, they’re going to be held to account.

RES:            What message does this send out about divorce settlements in this country?

ND:             In the round, it doesn’t send out a bad message at all because most divorce settlements in this country are dealt with properly.  Most lawyers, most family lawyer certainly will advise their client and give them clear advice that they must make full and frank disclosure and most people will actually do that.  Because, again most people will be advised by their lawyers and if they don’t, they’re not going to get away with it.  In these two high profile cases it’s always good to have these case every now and again come along as it reminds us all that we have to do those things.  But for most cases it’s not going to make a great deal of difference because most people are honest and most people do make disclosure but where that doesn’t happen, these cases underline the fact that they’re not going to get away with it.  It’s useful to always have forensic accountants on hand, either external accountants or as we have, in-house forensic accountants who can check the disclosure made by particularly wealthy husbands to make sure they are making full disclosure and to ensure that if they don’t, that is highlighted and brought out.  In the main, that’s not going to happen, in effect week in week out in cases except now the husbands and husbands’ lawyers will be on notice that they really do have to get their act together and they have got to make this disclosure.  So, we may find a greater willingness to make sure that that’s the case.

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