'English courts preferred in divorce for rigorous disclosure process'

Allegations by one party in a divorce that the other is being less than forthcoming about the size of their assets (or income) is nothing new and many a celebrity couple, from Sylvester Stallone and Jennifer Flavin, to Vanilla Ice and Lauren Van Winkle, have publicly traded such accusations. 

Another accusation in Tatum’s divorce is that unacceptable delays are being created. It is Tatum who is accusing Dewan of this. Why? Presumably because every month that goes by the Magic Mike franchise increases in value, which may allow Dewan to claim more despite this happening post-separation. 

Such arguments are, sadly, very common in many divorces. In England and Wales, despite an absolute duty on both parties to provide full and frank financial disclosure, an estimated 30 per cent of financial remedy cases contain some suggestion of non-disclosure, real or imagined.

Bank accounts unaccounted for, classic cars forgotten about, inheritances brushed under the carpet and mysteriously financed credit cards are all par for the course as far as seasoned divorce lawyers are concerned, and it is a large part of their job to 'follow the money' by examining bank statements, querying sources of expenditure and tracing income flows in an attempt to account for how someone who is now suggesting they have modest means was able to fund such a lavish lifestyle during the marriage. 

Many view it unfair that an ex-spouse should benefit from the post-separation growth of assets.

It is, in part, the rigorous disclosure process under English law that has given rise to London being repeatedly named the divorce capital of the world.

Not only do parties have to complete a 30-page sworn statement about their income and assets at the start of the process (known as a "form E"), backed up by such documentation as a year’s bank statements for each account, it is not unusual for them to face a questionnaire about assets and income running to more than 100 questions, including requests for extensive further documentation backed up by a court order.

And this is before expert forensic accountants and valuers are set to crawl over the assets, in some cases shadowed by each party’s own separate expert. Such rigour is unknown in many other jurisdictions – though not in fact unusual in some (but by no means all) US states.

This, combined with generous settlements based on 50 per cent of the marital assets together with substantive ongoing spousal maintenance (which may be capitalised), can definitely tempt financially weaker spouses from internationally wealthy couples to do all they can to obtain English jurisdiction. 

The penalties for non-disclosure under English family law are also severe. They can range from substantial cost orders, through the court assuming the existence of the hidden assets or income and basing a final order on that basis, to reporting to the tax authorities and, in extreme cases, finding a party in contempt and locking them up or fining them.

Judges take disclosure very seriously and many a non-discloser has lived to regret the fact that their cunning plan to hide an asset has cost them more than the asset was worth. Even when apparently successful, the risk is that an inadvertent disclosure after the final order has been made can lead to it being set aside. 

Delays are inevitable in the English court system as much as in the US.

And what of delay? Well, there is an ongoing debate about the treatment of post-separation assets, as many view it unfair that an ex-spouse should benefit from the post-separation growth of assets.

But as things stand, the English court is primarily obliged to look at the value of the assets at the time of the final hearing rather than at separation. And this makes some sort of sense in many cases as, if the assets have gone down in value, the payer is scarcely going to want to divide the assets on the basis of a higher value at separation.

But delays are inevitable in the English court system as much as in the US.

In fact, almost certainly more so given the huge financial pressure the court system is under here. The answer for those who can afford it is to look to see if as much of the proceedings as possible can be taken away from the courts by using other methods of resolution such as mediation, arbitration and private financial dispute resolution hearings.

These all cost the parties money but ultimately can lead to a much quicker resolution of matters than if they leave timetabling to the courts.

That said, one party may of course welcome the delay if they can see the pot expanding. Though most parties crave some sort of certainty, as one never knows when a seemingly successful franchise may suddenly deflate.

Toby Yerburgh is partner and head of family and Sonabella Harji is an associate at Collyer Bristow