When negotiating a financial settlement upon divorce the law sets out your obligation to provide full, frank and clear financial disclosure to your ex and to the family court in voluntary financial negotiations when seeking to agree a consent order and in court proceedings for a financial order upon divorce.
What are my obligations?
Both you and your spouse or civil partner must give full, frank and clear disclosure of your income assets and liabilities – in other words you need to give a complete picture of your financial position in all negotiations leading to the court making a financial order whether by consent (a Consent order) or in any contested court proceedings for a financial order. This obligation is ongoing in the sense that it lasts up to the date the court makes a final financial order.
How do I make financial disclosures?
In contested court proceedings, financial disclosure is given on a “Form E” and when negotiating a consent order outside of court proceedings it is also considered best practice to engage in voluntary financial disclosure using a Form E. Copies of financial documents must be attached to your Form E, such as 12 months’ of bank statements, up to date valuations of the matrimonial home and any other properties, evidence of other investments such as shares, company accounts, pay slips, up to date pension valuations and copies of loan agreements. You can also make specific requests for further information and documents from your ex in a questionnaire which is prepared once you have completed and usually simultaneously exchanged your Form E.
What role does the court have?
In court proceedings, the court directs what further information and documents, if any, you need to produce. Alternatively, if you and your spouse are attempting to reach a financial settlement upon divorce without court proceedings for a financial order, you should each answer the other’s questionnaire.
What are the do’s and don’ts of financial disclosure?
The old way of doing financial disclosure – “Self-help” and the “Hildebrand” rules –
In the past, if you didn’t trust your spouse or civil partner to give full, frank and clear financial disclosure, you might have helped yourself to their documents before they were disclosed by them as part of the process of financial disclosure. This practice was called “self-help” under the “Hildebrand” rules after the case of the same name when the court gave guidance about financial documents obtained secretly. The Hildebrand case led to parties secretly taking documents belonging to their spouse or civil partner for use in court proceedings for a financial order upon divorce. The justification for this was the requirement for full and frank disclosure.
To what extent can I engage in “self-help” to access my ex’s private and confidential documents today? What are the rules today?
In the case of Tchenguiz and others v Imerman, the court stated that the Hildebrand rules do not condone the removal and retention of confidential material belonging to another party. In marriage or civil partnership, both parties are entitled to confidentiality and privacy. Without the owner’s consent, it is a breach of confidence to read, create, retain or supply copies to a third party of confidential documents belonging to your ex. Original documents and privileged documents must be returned to their owner immediately on receipt. However, confidentiality might be waived if confidential documents are left available to be seen by others, for example on the kitchen table.
What type of financial documents should I be wary of?
- Privileged documents. These are documents passing between a person and their lawyer. Their content is “privileged”. Privileged documents can be withheld from the court or a third party (or both). You must not look at privileged documents belonging to your ex or pass them to a third party. You must return them, unread, to their owner.
- Confidential documents. These are any documents relating to a person’s personal matters that you are not entitled to see. They can include financial papers that are relevant to financial negotiations or court proceedings that should be disclosed according to the duty to give full, frank and clear financial disclosure. If you have any of these documents, you must return them, unread, to your spouse, subject to the need to be preserved for use as evidence. Legal means of preservation should be used. Confidential documents also include documents that have no relevance to financial negotiations or court proceedings, for example personal letters. You may not take, copy or read any material belonging to your spouse. if you have any of these documents, you must return them, unread.
How is this balanced with the need for full frank and clear financial disclosure?
A failure to provide full, frank and clear financial disclosure can prevent a fair trial and can lead to an unjust result. Therefore, confidential material, whether or not obtained unlawfully, can be produced in court proceedings, providing that they are relevant and not privileged. However, by doing so, a person who has unlawfully obtained disclosure, risks falling foul of civil and/or criminal law.
Are there any civil and criminal implications of accessing unlawfully obtained financial disclosure?
Unlawfully taking financial documents can amount to a civil wrong, such as trespass, breach of confidence or copyright. You could be committing a criminal offence leading to criminal sanctions. For example, under the Computer Misuse Act 1990 for the unauthorised access to financial documents stored on a computer or the Theft Act 1968 for taking property belonging to another person.
When should I seek legal advice?
Always consult your divorce lawyer before taking any action in respect of “self-help”. If you have any privileged or confidential documents belonging to your spouse in your possession you should let your divorce solicitor know straight away and they will advise you of the correct way to handle this material. Your divorce lawyer is likely to want written instructions from you about the documents, and how and when the material came into your possession. If your divorce lawyer sees documents that they should not have seen, they may be unable to act for you.
How can I lawfully obtain financial disclosure from my ex?
If you are concerned about your ex failing to give full and frank financial disclosure, the following are legitimate ways to obtain disclosure from them:
- Court proceedings, for example, by requesting disclosure in a questionnaire.
- Obtaining an order from the court allowing for the search and seizure of documents without prior notice; or an order to freeze a person’s assets. You should act quickly when applying for these orders to avoid evidence being hidden or destroyed.
- If the matrimonial assets include a private company and you are a company director or shareholder, you could attend the annual general meeting. Directors and shareholders are also entitled to copies of company accounts.
- Making enquiries at Companies House if the financial disclosure relates to a limited company – you can download information about a company that is in the public domain from the companies house website.
- Searches at the Land Registry for property – this information will also be in the public domain.
- Noting the franking mark on the outside of envelopes delivered to your ex so you can see which companies are writing to
- Looking at your ex’s financialpapers and other documents that are open and freely accessible and making a note of what you see. For example, if a husband leaves his bank statement lying around open in the matrimonial home, in the kitchen, living room or marital bedroom, it may lose its confidential character as against his wife.
- If you are a joint signatory on a bank account or financialinvestment, you are entitled to statements of account from the administrator.
- If you are a beneficiary of a trust, you can ask the trustees to produce copies of the trust accounts.
- Any information that you have can be the basis of a line of enquiry at questionnaire stage, even though the documents themselves must be returned. You can ask a question about a document you have seen, relying on your memory to do so.
What should I always avoid doing?
There are various things that you must not do to obtain financial disclosure, such as:
- Steal documents (even those in rubbish bins).
- Interfere with post.
- Break into premises, or into a locked cupboard, filing cabinet or briefcase to access information or documents.
- Make secret copies of confidential materials.
- Fax or email copies of documents to yourself or a third party
- Download or copy financialinformation from your ex’s
- Give copies of documents that have wrongly come into your possession to any third party, (including your divorce lawyer , unless they are in a sealed envelope).
How can I protect my own financial information?
You should keep all your own financial documents and papers that could be relevant to financial negotiations and court proceedings and don’t destroy them. You may want to ensure that your papers are kept confidentially and not left where they can be accessed by your ex. Keep any documents containing legal advice securely and consider locking and password protecting any computers and similar devices and regularly changing your passwords. If you are concerned that your ex may have unlawfully obtained confidential material belonging to you, you should let your divorce lawyer know immediately.
How can Lincolns Family Law help?
Confidentiality is a matter of fact and circumstance and each case will turn on its own facts and we can provide legal advice in relation to financial disclosure that takes into account your own specific circumstances. If you need legal help with any aspect of your financial negotiations or contested court proceedings contact us using our online enquiry form or call on 01403 788435 for a free no obligations chat or to book a fixed fee consultation to discuss your situation in more depth.