In-Depth Look At Full And Frank Disclosure In Family Proceedings

Financial disclosure is required before you can negotiate a financial settlement on divorce. If you go to Court, this is mandatory, but even on a voluntary basis, it is needed if you want a watertight agreement. It is also very important to ensure that you have included all assets, liabilities and income because it is easy to forget things which can be problematic later.

Why do I need to give full and frank disclosure?

This duty is vital to allow the court to fulfil its obligation to consider all the circumstances of the case in proceedings for financial orders (section 25(1), Matrimonial Causes Act 1973)

Full and frank disclosure is necessary to help ensure effective negotiations to take place. Providing disclosure will help the parties identify issues between them more efficiently.

Section 25 outlines what the court should take into consideration when deciding what, if any, order to make. The considerations include:

(a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire;
(b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
(c) the standard of living enjoyed by the family before the breakdown of the marriage;
(d) the age of each party to the marriage and the duration of the marriage;
(e) any physical or mental disability of either of the parties to the marriage;
(f) the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family;
(g) the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it;
(h) in the case of proceedings for divorce or nullity of marriage, the value to each of the parties to the marriage of any benefit which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.

The judges in the case of Jenkins v Livesey (formerly Jenkins) made clear that the court could not make a proper consideration of all factors under section 25 if full and frank disclosure has not been given. It needs to be complete, correct and up to date.

The judgement explained that the duty to provide full and frank disclosure is not limited to contested proceedings but should also be given where negotiations are taking place between solicitors or some other form of non-court dispute route is taking place with a view to preparing a consent order.

How much should I give?

The notes of guidance released following Practise Direction 9A states the parties must provide

‘Provide full, frank and clear disclosure of facts, information and documents, which are material and sufficiently accurate to enable proper negotiations to take place to settle their differences.’

It goes on to explain that if the parties voluntarily exchange disclosure, they should exchange

‘Schedules of assets, income, liabilities and other material facts’

The first stage of disclosure is a Financial Statement called the Form E. Each party fills in the Form E, setting out their assets, income and liabilities. The Form E also requires supporting documents to be provided, including bank statements, home valuations, mortgage statements and pension valuations. What is required is made clear on the Form E. You should provide recent and clear documents that can be shared with the other side to allow effective and open discussion.

The duty for full and frank disclosure is an ongoing duty. Consequently, any material fact or document that becomes relevant after the initial exchange of disclosure must be disclosed both to the other party and the court as soon possible. During proceedings, you will also be required to provide ‘updating disclosure’, this involves updated statements and pension valuations. The consequences laid out below also apply to circumstances where the ongoing duty has not been complied with.

What if one party fails to provide full and frank disclosure?

The first page of a Form E details the potential consequences of providing incorrect information on the form:

‘You have a duty to the court to give a full, frank and clear disclosure of all your financial and other relevant circumstances. A failure to give full and accurate disclosure may result in any order the court makes being set aside.’

This explains if the other party fails to provide full and frank disclosure, you may be able to apply to have the final order set aside, which means looking at the finances afresh.

In the case Sharland v Sharland, the husband gave fraudulent non-disclosure and Briggs LJ explained ‘Fraud unravels all’. The order was set aside and the case was set to be re-heard.

‘If you are found to have been deliberately untruthful, criminal proceedings may be brought against you for fraud under the Fraud Act 2006.’

The warning also outlines that a criminal conviction could be given on the basis of purposefully giving fraudulent information. In the case of W v S (Committal), the husband received a prison sentence of 14 days for failing to provide an adequate Form E and the relevant documents.

‘The information given in this form must be confirmed by a statement of truth. Proceedings for contempt of court may be brought against a person who makes or causes to be made, a false statement in a document verified by a statement of truth.’

Every Form E includes a statement of truth which must be signed by the person filling it out. This verifies the information supplied is truthful and accurate at that moment in time.

Are there any exceptions?

During court proceedings, there are no exceptions to the duty of providing full and frank disclosure. One party is not able to exonerate the other party from making full and frank disclosure; it must be given in all cases.

If you and your ex-partner can reach a settlement outside of court and want to have that agreement recorded in a Consent Order (so that the agreement becomes binding) the Court will still require disclosure in a Statement of Information (Form D81). This is an abridged disclosure form that does not require support documentation to be attached. This allows the Court to consider whether the terms of the Consent Order are fair to both parties in light of the parties’ assets, income and liabilities. If they don’t think the terms are fair, the Judge can ask questions on the settlement and in some cases, list the matter for a Hearing.

The court have an active involvement in making a Final Order over finances – it is not a simple rubber stamping exercise.

What about my solicitor?

The duty to provide full and frank disclosure also extends to solicitors. Your solicitor owes an overriding duty to the court hence the solicitor cannot mislead the court and must provide full and frank disclosure on behalf of their client.

If you have any questions or concerns about disclosure given or received, please get in touch with our specialist family law experts by calling 0330 822 3451 or you can request a call-back.