When couples go through family mediation or divorce proceedings, one of the most crucial steps is providing complete and honest financial disclosure. Financial transparency ensures that both parties—and ultimately the court—can reach a fair and equitable settlement. Without accurate financial information, mediators and judges cannot properly assess assets, debts, or future needs.
Why Full Financial Disclosure Matters
- Ensures Fair Settlements: Mediation aims to reach agreements that are reasonable and sustainable. Full financial information enables mediators to identify assets, income, pensions, and property for equitable division.
- Builds Trust and Cooperation: Transparency reduces conflict, allowing couples to reach faster and less expensive agreements.
- Protects Against Future Legal Issues: Hiding or underreporting finances can invalidate agreements or lead to costly court disputes later.
Legal Consequences for Failing to Disclose Financial Information
Under UK matrimonial law, particularly guided by Section 25 of the Matrimonial Causes Act 1973, courts consider all financial circumstances when determining divorce settlements. If a party refuses to disclose financial information:
- A judge may compel disclosure and order the party to produce bank statements, pay slips, property valuations, and other documents.
- Penalties can include cost orders (requiring the non-compliant party to pay the other’s legal costs), fines, or even imprisonment for contempt of court in serious cases.
- The court can also draw adverse inferences, assuming that withheld information conceals assets, which may result in an unfavourable financial outcome for the non-disclosing party.
Summary of Section 25 of the Matrimonial Causes Act 1973
Section 25 of the Matrimonial Causes Act 1973 sets out the principles judges must consider when making financial orders following divorce or separation. Key factors include:
- Income, earning capacity, and financial resources of both parties.
- Financial needs, obligations, and responsibilities of each spouse.
- Standard of living enjoyed during the marriage.
- Age and duration of the marriage.
- Contributions made by each party (both financial and non-financial, such as caring for children).
- Physical or mental disabilities, if any.
- Conduct of either party, where relevant.
- Welfare of any children, which is the court’s first consideration.
This legal framework ensures fairness and equity in dividing assets, based on each party’s circumstances and needs.
Final Thoughts
Completing your financial disclosure form during family mediation is not merely a formality—it is a legal obligation that upholds fairness, transparency, and trust. Refusing to provide full information can lead to severe penalties and undermine the entire mediation process.