One of the fundamental elements of the process for obtaining a financial remedy on divorce in the courts of England and Wales is that of discretion.

It means that judges can apply the legislation based on the individual circumstances of the cases brought before them.

Of course, such interpretation of the law means that there can be some disagreement from time to time as not every judge will reach the same conclusion.

That is one reason why decisions can be challenged and even overturned in the higher courts.

Within the last week we have also had the outcome of one case being questioned by a former Family Court judge on a professional networking platform.

Sir Nicholas Mostyn took to LinkedIn to disagree with a ruling in the case of an American couple trying to finalise a financial settlement at the end of their 20-year marriage (https://www.linkedin.com/posts/nicholas-mostyn-612405304_i-would-like-to-make-two-points-about-the-activity-7428684861374169089-G3M4/).

“I cannot help thinking in this case”, said Sir Nicholas, “that the husband has got away with blue murder”. The judgment highlighted what he said was “a depressing example of non-disclosure paying off”.

Non-disclosure in divorce is the failure by a spouse to set out the true scale of their wealth so that a fair and adequate settlement for both can be reached.

One of the key points in such considerations is something known as ‘the sharing principle’: the idea that assets amassed by spouses over the course of a marriage should be shared between them. The starting point after a long marriage is an equal sharing.

How, though, can a judge apply that principle to assets if he or she does not know their true extent? Indeed, this was the problem confronted by Mr Justice Peel, the judge in the matter referred to by Sir Nicholas Mostyn.

In my experience, material non-disclosure – that is, the failure to disclose assets which could make a material difference to the nature of a financial settlement – is a rarity, particularly when it is of the extent in this latest case.

That infrequency is due in part to the potential penalties of failing to comply with the “statement of truth” (https://assets.publishing.service.gov.uk/media/63c132468fa8f516ac0d5a6d/Form_E_0123_save.pdf).

The very form upon which a disclosure of assets and income is required, known as the Form E, makes clear that being “deliberately untruthful” may not only result in a financial agreement being set aside but could lead to criminal proceedings.

The courts certainly take a robust approach to non-disclosure. Furthermore, hiding assets or siphoning them off is quite hard to do without leaving some trace for the trained eye.

That being said, it is of course possible and I fear that non-disclosure could become more common with the rise of cryptocurrencies, for example, and the use of AI to manipulate documents

In the case referred to by Sir Nicholas Mostyn, the husband – a serial entrepreneur – was found to have “concealed the true financial picture” (https://caselaw.nationalarchives.gov.uk/ewfc/2026/28?query=%5B2026%5D+EWFC+28).

The husband claimed his business was “on the verge of insolvency and worthless” and suggesting that “he has no other meaningful resources”.

Yet Mr Justice Peel, who presided over the matter, concluded that despite some evidence the company was in difficulties, the husband had access to other, undisclosed assets.

“Doing the best I can”, said the judge, the man’s “wealth measures a few million pounds rather than running into the tens of millions”.

Nevertheless, Mr Justice Peel made an order under which the wife in this case retained the family home, would have loans made to her by her ex-husband’s company indemnified by him and would receive two lump sums totalling just over £2 million.

“If the outcome is unfavourable” to the husband, said the judge, “he only has himself to blame”.

Nevertheless, Sir Nicholas Mostyn seems to think that Mr Justice Peel should have gone even further.

Material non-disclosure is something which every family lawyer needs to be alive to.

However, in my experience, what is more common is something which has been described as ‘divorce depression’ – the deliberate undervaluing of business assets or future income, for example, which has been disclosed in an attempt to limit the size of any amount which one spouse might have to pay the other.

Imagine, for instance, a self-employed spouse who coincidentally has a bad year just as they are about to divorce.

There is, quite rightly, a concerted effort to try and settle financial matters arising from divorce away from the courts as proceedings can be lengthy and expensive.

However, even with non-court dispute resolution (NCDR) methods like mediation and arbitration it can be hard – if not entirely impossible – to achieve a fair outcome if one party is not prepared to be transparent about their wealth.

This is where having the support of an experienced specialist family lawyer can be of immense benefit, someone who is acutely aware of the problem of complete non-disclosure, inaccurate or ‘depressed’ and how to spot it.

In addition, if the matter cannot be resolved outside court, their forensic approach can help present a robust, compelling strategy as to how such behaviour should be dealt with.

We still wait, of course, to see whether and when the Government will make a formal response to the Law Commission’s paper on possible reform of the laws on financial remedy in divorce (https://lawcom.gov.uk/news/law-commission-publishes-scoping-report-on-financial-remedies-on-divorce/).

Those suggestions were published in December 2024 and included proposals for something called ‘Guided Discretion’ – clearer rules governing the overall process but retaining “to a greater or lesser extent, some judicial discretion, which can then be exercised on a case-by-case basis”.

This last week’s exchanges underline how the current structure provides ample room for differences of opinion, both in and out of court.