The ‘cheat’s charter’

Nicola Furmston of Barker Gotelee examines the latest developments in family law

The couple, whose divorce has created new law this week, married shortly after the husband became extremely wealthy from the sale of shares in a family company. The husband, being nobody’s fool, insisted that he and the wife enter into a pre-nuptial agreement to restrict the wife’s claims against him in the event of a divorce although, as these are not currently enforceable as of right in England and Wales, the finances on any separation still had an element of uncertainty.

The husband’s wealth grew substantially after marriage and upon divorce the wife felt hard done by. Consequently she applied to the court in their, yet unresolved, divorce proceedings, for more and if she succeeds, she may receive the highest divorce award ever in England and Wales.

The point which has given the case its notoriety is one relating to disclosure of financial documentation. The wife was sceptical about the husband giving the court the full picture with regards to his assets so got family members to raid his computer and download up to 1.5 million documents behind the husband’s back, including confidential records appertaining to members of his staff. Leaving aside the legitimacy of taking records relating to third parties, the raiding of a spouses documentation during or in preparation for divorce proceedings had, up until this week, been a legitimate exercise, subject only to the requirement that any documents of one party’s taken by the other must be given back during divorce proceedings.

This week the Court of Appeal has called time on the practice. Documents taken by one party cannot be used as evidence, although questions can still be asked about information found in such documents and a judge can be asked to order that certain documents are disclosed. Husband and wives who think their spouses are hiding something will have to make do with this or instruct their lawyers to apply for expensive court orders to freeze, squeeze and seize paperwork.

Will this be a cheat’s charter? Only time will tell. On another point the legal world is shortly expecting a potentially ground-breaking Supreme Court decision which should provide more clarity on the whole issue of the validity of pre-nuptial agreements in England and Wales. If the outcome is as expected, pre-nuptial agreements may become enforceable as of right, a decision which will follow the modern trend to allow consenting and properly advised adults to regulate their own financial arrangements.