When people go through divorce and financial remedy proceedings, many assume that once they have completed their financial disclosure documents, their obligation to provide information is over. In fact, the opposite is true.
Under English family law, the duty to provide financial disclosure is a continuing obligation that remains in place until the court makes a final financial remedy order. This means that if your financial circumstances change during the proceedings, you are expected to tell the other party and the court.
Failing to do so can have serious consequences, including costs penalties, adverse findings by the court, and in some cases the setting aside of a final order years later.
What is financial disclosure?
Financial disclosure is the process by which each party provides a full picture of their financial circumstances. This typically includes:
- Income and earnings
- Bank accounts and savings
- Investments and cryptocurrency holdings
- Property interests
- Pensions
- Business interests
- Debts and liabilities
The purpose of disclosure is simple: the court cannot make a fair decision unless it knows the true financial position of both parties.
The duty is not merely owed to your former spouse. It is owed to the court itself, which must apply the factors set out in section 25 of the Matrimonial Causes Act 1973 when deciding what financial order is appropriate.
A continuing duty, not a one-off exercise
Many people are surprised to learn that disclosure is not a snapshot taken at the start of proceedings.
The Family Procedure Rules 2010 and Practice Direction 9A make clear that the duty of disclosure continues until a final financial remedies order is made. Parties are required to disclose any material changes in circumstances occurring after their original disclosure.
Examples might include:
- Receiving a bonus at work
- Starting a new job with a higher salary
- Receiving an inheritance
- Purchasing or selling a property
- Significant investment gains
- Acquiring cryptocurrency assets
- Receiving a substantial gift from family
- Changes to pension arrangements
Even where a settlement has been negotiated, disclosure obligations continue until the court has approved and sealed the final order.
What do the courts say?
The principle is not new.
The leading authority is Livesey (formerly Jenkins) v Jenkins. In that case, the House of Lords confirmed that parties in financial remedy proceedings owe a duty of full and frank disclosure and that this duty continues until the court has made its order. A failure to disclose a material change in circumstances may result in the order being set aside.
The courts have repeatedly reinforced this principle.
Sharland v Sharland
In Sharland v Sharland, the Supreme Court emphasised that full and frank disclosure is a fundamental foundation of the financial remedy system. The court made it clear that where an agreement is reached based upon material non-disclosure, it will often be unsafe and vulnerable to challenge.
Gohil v Gohil
Similarly, in Gohil v Gohil, the Supreme Court took a firm stance against non-disclosure, stressing that transparency is essential if the court is to perform its statutory function properly. The decision confirmed that parties cannot evade their disclosure obligations simply because the other party has not asked the right questions.
ON v ON (2024)
More recently, in ON v ON (2024), the court considered disclosure obligations in the context of family arbitration. The judgment highlighted that the duty may continue even after an arbitrator has delivered a decision, up until the point when the court approves the order arising from that decision. This serves as a reminder that the disclosure obligation does not automatically end when negotiations conclude or a decision is reached.
Adodo v Tan
In Adodo v Tan, the Court of Appeal reaffirmed that a financial remedy order may be set aside where material non-disclosure or misrepresentation has resulted in an order substantially different from that which would otherwise have been made. The case reflects the courts’ continuing willingness to revisit orders where justice requires it.
What happens if someone fails to disclose?
The consequences can be significant.
Depending on the seriousness of the non-disclosure, the court may:
- Draw adverse inferences against the non-disclosing party
- Make costs orders
- Re-open proceedings
- Set aside an existing financial order
- Require a fresh hearing
Importantly, the court does not look favourably on attempts to conceal assets or “wait until after settlement” before revealing important financial developments.
As the Supreme Court recognised in Sharland v Sharland and Gohil v Gohil, the family justice system relies upon honesty and transparency from both parties.
Practical advice
If your circumstances change during financial remedy proceedings, tell your solicitor immediately.
A change may seem insignificant to you but could be legally important. It is usually far better to disclose information and allow the court to decide whether it is relevant than to risk allegations of non-disclosure later.
The safest approach is straightforward:
If in doubt, disclose.
Doing so protects the integrity of the process, helps the court reach a fair outcome, and significantly reduces the risk of costly future litigation.
Conclusion
Financial disclosure in divorce proceedings is not a one-off exercise completed when the Form E is filed. It is an ongoing obligation that continues until the court makes a final financial remedy order.
The courts have repeatedly confirmed, from Livesey v Jenkins through to modern authorities such as Sharland v Sharland, Gohil v Gohil, and ON v ON, that full and frank disclosure is essential to achieving a fair outcome. Parties who fail to comply risk not only criticism from the court but potentially the unravelling of any settlement they believed had brought matters to an end.