Financial negotiations on divorce outside court
News article published on: 23rd January 2020
A reminder from another court that an honest statement is best
There was an interesting case in the Court of Appeal (Civil Division) recently which reminded me of a discussion I had with a client recently regarding his financial statement he was providing (Form E), voluntarily.
The case was not a family case; it was called Jet2 Holidays Limited v Hughes & Hughes  and it confirmed that the High Court had jurisdiction to commit someone for contempt of Court if false statements of truth were made by potential claimants even though no claim for damages was ever pursued through the courts.
The Court made clear that:
“a dishonest witness statement served in purported compliance with a PAP is capable of interfering with the due administration of justice for the purposes of engaging the jurisdiction to commit for contempt because PAPs are now an integral and highly important part of litigation architecture…”
Although there is no pre-action protocol (PAP) in financial proceedings in the family Court, there are of course the Family Procedure Rules (court rules) which include Practice Directions on how a case is to be managed, and there is the Family Law Protocol. In addition, there are some family law cases where the Civil Procedure Rules, rather than the Family Procedure Rules, are more directly relevant and then the pre-action protocol does apply, such as cases between unmarried couples who cannot agree how their home should be dealt with on separation.
Even in financial divorce proceedings at Court, in the run-up, the parties often try to settle matters out of Court first, and provide their financial disclosure in Forms E voluntarily, and sign a statement of truth at the end of that document. The Jet2Holildays case reminded me of the advice I recently gave to a client about this.
If the client is going to take the time, and pay the cost of, producing a Form E voluntarily, it needs to be correct. It should not be considered that it can be changed easily later, and the task of completing it should not be taken lightly. This is a reminder that statements made even outside the court process, but with a view to settling matters and that agreement being ratified by the Court, should be given careful attention to ensure they are accurate, first time round. Every effort should be made to produce a very thorough and correct Form E in the voluntary disclosure process.
Blog post written by Lisa Pepper, Partner in the Family Law team.