Tracing hidden assets

There are circumstances in which one party in a relationship is secretive about his or her assets.

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There are circumstances in which one party in a relationship is secretive about his or her assets and fails to provide the full picture to their spouse or civil partner during the relationship and, more particularly, during any subsequent divorce proceedings.

The secretive party may have complicated financial arrangements and have placed assets either overseas or hidden in this jurisdiction, via undisclosed bank accounts or through nominees. The divorce courts in England and Wales have developed a number of tools over the years which can be deployed to establish the location of such assets and make them available to the weaker financial party.

The first and most important tool available to the financially weaker party is that of court-ordered disclosure of relevant financial information and documentation. All parties have a duty to provide full and frank disclosure of their financial position in financial remedy proceedings, and failure to provide this means that the court will order the provision of such documentation and information as is needed to provide such disclosure. These orders can be extremely wide-ranging. The court can also order the provision of expert opinions about the value of companies and other assets.

If there are gaps in the parties’ disclosure even after the provision of this information and documentation then other tools are available, including ordering the disclosure of documentation from third parties, requesting the information from foreign courts and joining third parties to the proceedings. The precise mechanism that can be used will depend on the circumstances of the case. The court will want to balance whether such steps are proportionate to the assets involved against the need to ensure that full and frank disclosure of the assets has been provided.

A complicated and rapidly developing area of the law is the use of documents which one party has obtained that belong to the other party but which reveal the identity of hidden assets. These documents are known as ‘Imerman documents’ and we at Hughes Fowler Carruthers are experts in dealing with such issues having acted in the case of Imerman v Tchenguiz, which developed this area of law.