Honesty really is the best policy

The Supreme Court has today handed down two important Judgments. These send a clear message to all those involved in settling their financial arrangements on divorce; if you want finality in your divorce settlement (whether it is imposed by the court or reached an agreement), don’t lie. Honesty and openness is indeed the best policy, and it is now clear, it is the only policy that will be accepted by the Courts.

Whilst the awards made to the two women involved were vastly different – Mrs Sharland having been awarded £10.35 million, and a one third interest in her husband’s business, and Mrs Gohil having accepted a payment of £270,000 plus a car – both women’s claims, initially settled by agreement, were re-opened today as a consequence of their respective husband’s failure to tell the truth about their financial resources, thereby misleading both their wives and, importantly, the Court.

In her Judgment for Mrs Sharland, Baroness Hale, the most senior female Judge in the country, said that it would be extraordinary if the victim of a fraud within the course of family proceedings found themselves in a worse position than the victim of a fraud within the course of an ordinary civil claim. That must be right. Why should either party to a marriage (and the principle applies equally to men and to women) be forced to accept less than they are entitled to simply because their former partner lies, even if they later get caught out.

In both cases, the Court accepted that the husbands had misrepresented their true financial position, to the tune of many £100,000s. Whilst the Court of Appeal had earlier refused to allow either women to pursue further claims once the extent of the husband’s misrepresentation had become clear, sometimes for what were arguably technical reasons, the Supreme Court has now ensured that, what many argue is the common sense approach, it is now the approach the Court’s must take.

Although there are those who may have little sympathy for either Mrs Sharland or Mrs Gohil, it is now clear that misleading a Court will not be accepted. Those caught lying run the very real risk that the Courts will open up arrangements that might previously have been held to be binding, thereby exposing the wrong doer to further claims and expense.

Although we don’t yet know whether either Mrs Sharland or Mrs Gohil will receive any additional funds, these Judgments arguably open the floodgates to others pursuing claims in circumstances where it is clear that their former spouse was less than frank about their financial resources.

However, those considering pursuing such claims need to think carefully about the financial advantages of doing so, and the impact upon both themselves and their family. As Baroness Hale made clear, the financial resources of a family should not be whittled away in substantial legal costs, and it is important that the emotional resources of the family should not be concentrated upon conflict.

If you believe these Judgments may allow you to consider opening up earlier orders, please contact one of our specialist Family lawyers who will be able to advise you further.

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