David Hodson on International Implications of Imerman: London: the divorce cheat's capital of the world?

02 August 2010

London has been described as the "divorce capital of the world", including by Lord Justice Thorpe in Charman [2007], our most senior international family court judge. In part this is because of substantial redistributions of wealth based on equality principles, however in part due to extensive opportunities to investigate and obtain good disclosure of the true wealth of the paying party.

Crucial has been the admission in evidence of financial documents obtained by one spouse which the other might want hidden to conceal their true wealth. English family courts have always taken a practical, pragmatic view, preferring the importance of gaining the truth of the finances to technical issues of confidentiality in private papers.

This dramatically changed last week with the Court of Appeal decision in Imerman. Whilst it involved extreme self-help (up to 2.5 million documents taken from the husband's computer!), the Master of the Rolls, England's most senior civil judge, made clear that family lawyers and family courts could no longer use "confidential" documents obtained by one spouse, even in circumstances as in Imerman where the other spouse had made it abundantly clear that they would use every effort to avoid the full facts being known. The Appeal Court placed reliance on the historic law of confidence, more often used in litigation about corporate espionage, intrusiveness into the lives of public figures and breaches of employment law

The decision has been condemned by family lawyers. See the comments of my fellow columnist, Sandra Davis, with which I wholeheartedly agree.

England has previously been critical of disclosure obligations in other countries. Some have self certification of disclosure - always inherently unreliable. Some countries rely on tax returns - invariably a work of considerable fiction! Some countries ignore offshore assets - where the bulk of wealth may be held. Some more cynical countries go direct to corroborated third-party disclosure with extensive use of subpoenas. Some countries with tax haven status have refused legitimate English enquiries about disclosures of trusts. In the face of this, England has smugly believed it had the best prospects for obtaining financial disclosure and so obtaining a fair outcome on divorce.

Suddenly we are not so confident. Of course our judges will continue to make inferences about undisclosed wealth, and probably more so in the future. There will be greater use of freezing orders, search orders to go into property to locate documents, and more cross examination at final hearings. This will increase costs significantly; ironically when the government is trying to reduce costs of the family justice system!

So London as the divorce cheat's capital of the world?  No. England will still do very well in getting to the heart of disclosure, and more so than many countries. But a very technical adherence to the historic civil law of confidence will enable some international spouses to escape giving honest disclosure. A sad event for honesty and integrity in family law.

David Hodson is a Consultant at The International Family Law Group. He acts in complex family law cases, often with an international element. 

He is an English specialist accredited solicitor, mediator, family arbitrator, Deputy District Judge at the Principal Registry of the Family Division, High Court, London and also an Australian qualified solicitor, barrister and mediator. He is a Fellow of the International Academy of Matrimonial Lawyers and author of A Practical Guide to International Family Law (Jordan Publishing, 2008). He is chair of the Family Law Review Group of the Centre for Social Justice. He can be contacted on dh@davidhodson.com.

The views expressed by contributing authors are not necessarily those of Family Law or Jordan Publishing and should not be considered as legal advice.

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