The Importance of Full Financial Disclosure in Divorce Settlements

A recent High Court ruling has reinforced a crucial principle in financial remedy proceedings: both parties must provide full and frank financial disclosure throughout the entire process—right up until the court finalises the Financial Order.

Case Overview: ON v ON

In recent a case ON v ON [2024] EWFC 379, the husband was a managing director of a successful construction and development company, while the wife was a director within his business, earning a salary but having no prior work experience outside this role. Their shared matrimonial assets were valued at £4.8 million.

The couple initially attempted to resolve financial matters through arbitration. The arbitrator issued an award, but the wife later sought to set aside the decision, arguing that her husband had failed to provide full financial disclosure during the arbitration process.

The dispute escalated when the wife asked the court to confirm that the duty of disclosure continues until a final court order is made. Meanwhile, the husband argued that once the arbitration decision was made, his disclosure obligations had ended, and he should pay the wife less.

This disagreement resulted in an expensive and complex legal battle that was ultimately resolved in the High Court.

Key Court Findings

His Honour Judge Booth ruled that the husband had deliberately concealed financial information from his wife. In 2023, after his business performed exceptionally well, he began spending large sums without informing her. The company’s 2021 financial records had been used to determine the arbitration award, but the husband failed to disclose his company’s financial success post-arbitration.

Financial Consequences for Both Parties

Due to the husband’s misconduct, the court ordered him to pay the wife an additional £1.16 million as part of the settlement. He was also required to cover £200,000 of her legal costs.

However, the wife was also penalised for making unfounded allegations of financial misconduct against her husband, which significantly increased his legal expenses. As a result, she was ordered to pay him £250,000.

Key Takeaways from This Case

• Full and frank financial disclosure is mandatory throughout the entire process—it does not end until the court seals a financial order.
• Failing to disclose financial information can lead to severe penalties, including increased financial settlements and legal cost awards.
• False allegations of financial misconduct carry serious consequences, and parties making such claims may be ordered to compensate the other side for unnecessary legal expenses.

How Hegarty Can Support You

Navigating financial remedy proceedings can be complex and overwhelming. At Hegarty, our expert legal team provides clear guidance and strategic advice to help you achieve a fair and timely settlement.

If you need support with financial disclosure or any aspect of divorce proceedings, contact Hegarty today for expert legal assistance.