Hidden assets and non-disclosure

Full and frank disclosure is a duty owed to the court, not a courtesy owed to your spouse. Where it has not happened, there is a good deal the court can do about it.

First: what not to do

This comes before everything else because it is the mistake that damages the most cases, and it is usually made in the first week.

Do not access your spouse’s email, accounts, phone or files. Not their work systems, not a shared computer they use privately, not an account whose password you happen to know.

It can be a criminal offence. It can expose you to a claim. And the documents obtained that way are frequently not admissible — so the usual result is that you have committed an offence, damaged your credibility with the judge, given your spouse a grievance to run, and gained nothing usable.

Courts have dealt with this repeatedly and the position is settled and unfavourable. If documents have already come into your possession this way, tell your solicitor immediately and do not read further or copy them. There is a proper way to handle it and there is a way that makes things much worse.

What you can properly do: keep records of what you have seen in the ordinary course of the marriage, note what you know about accounts, businesses and property, and preserve documents that are genuinely yours or jointly held.

What the court can do

Rather more than most people expect.

Orders for specific disclosure, requiring particular documents to be produced.

Questionnaires, requiring specific questions to be answered on oath.

Orders against third parties in some circumstances — banks, employers, companies — to produce documents or give evidence.

Adverse inferences. Where a party has failed to disclose properly, the court can draw inferences against them about what exists and what it is worth. This is the most important remedy in practice: the non-discloser’s reticence becomes evidence against them, and judges are prepared to assume generously against a party who has concealed.

Costs orders. Costs in financial remedy proceedings usually lie where they fall, but litigation conduct — including failure to disclose — is a recognised exception, and a non-discloser can end up paying.

Freezing orders, where there is a real risk of assets being dissipated.

Setting aside transactions intended to defeat a claim — a transfer to a relative, a sale at an undervalue, a sudden loan.

Setting aside an order already made

If a financial order was obtained on the basis of disclosure that turns out to have been materially incomplete, it can be set aside.

This is a genuine route rather than a theoretical one, and it applies years later. If you settled on the basis of a picture that has since proved false — a business sold shortly afterwards for a sum that cannot be reconciled with its stated value, an account that existed and was not mentioned — take advice. Do not assume the matter closed simply because an order was made.

Where assets are hidden

Common patterns, all of which leave traces: income diverted through a company or reduced temporarily; a bonus deferred until after the proceedings; assets transferred to family members; cryptocurrency, which people assume is invisible and which frequently is not; overseas accounts and property; loans to the business that are really capital; and undisclosed interests in trusts.

The lifestyle question is usually the first clue. Where the disclosed income does not support the way the family lives, the court notices, and that discrepancy is the starting point for a great deal of successful forensic work.

What we do

Analyse the disclosure given and identify what is missing or does not add up. Prepare questionnaires and applications for specific disclosure. Instruct forensic accountants where the sums justify it. Apply for freezing orders where there is a genuine risk. Apply to set aside orders obtained on inadequate disclosure. And advise, early, on what you can and cannot properly do to gather evidence.

What it costs

£400 per hour plus VAT, with an estimate by stage. Forensic accountancy fees are additional and we will tell you the likely range before instructing anyone.

We will also tell you when the cost of investigating is likely to exceed what it recovers. That conversation is worth having at the start, because suspicion is not the same as a case and pursuing every suspicion is how costs get out of control.

Questions

Questions people ask us

I think my spouse is hiding money. What can I do?

Tell your solicitor what you know and how you know it — and do not go looking through their accounts or devices. The court has real powers here: specific disclosure, questionnaires, third party orders, and adverse inferences drawn against a party who has not disclosed properly.

Can I look at my spouse's emails?

No. It can be a criminal offence, the material is frequently inadmissible, and it damages your credibility. If you already have such documents, tell your solicitor at once and stop.

What happens if they do not disclose?

The court can order disclosure, draw adverse inferences about what exists and its value, and make costs orders. In practice a party who conceals often ends up worse off than if they had disclosed.

We settled two years ago and I have found out they lied. Is it too late?

Not necessarily. An order obtained on materially incomplete disclosure can be set aside. Take advice with whatever evidence you have.

Can cryptocurrency be traced?

More often than people expect. Blockchain transactions leave records, and the points where crypto is bought or converted generally involve identifiable accounts. The duty to disclose covers it like anything else.

Is it worth investigating?

Sometimes not, and we will say so. Forensic work is expensive and suspicion is not evidence. The question is whether what you realistically expect to find justifies the cost of finding it.

The hub

Family law →

Also in this area

Divorce: the process, and the part that actually matters →

Also in this area

Financial settlements on divorce →

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