In light of the recent decision in Imerman (see our case report) apparently reversing the Hildebrand rules, what options are available to clients whose spouse upon divorce are attempting to conceal their assets?
The orders available are as follows:
1. Search Orders
This is intended to prevent the fraudster from destroying incriminating evidence regarding assets and their concealment. It is an order made without notice of the application to the spouse and requires the permission of the Court to enter premises to search and remove evidence.
The Court will not make such an order unless it is satisfied that:
a) the applicant has an extremely strong claim;
b) the potential/actual damage to the applicant arising from the claim is very serious
c) the defendant has possession of incriminating evidence and there is a real possibility it will destroy or tamper with that evidence; and/or
d) the harm likely to be caused to the defendant by such an order is not disproportionately excessive to the legitimate object of the order.
It can cover computers, mobile phones and laptops, which may be useful as the spouse may be under the impression he/she has deleted relevant information from these devices. The order may allow a computer forensic expert to take an image of the hard-drive on any computer. The search order could include the spouse’s office at home and work.
2. Disclosure Orders
The Court has power to order disclosure of evidence from an innocent victim, such as an accountant or bank. They would then have a duty to assist the person who has been wronged by giving full information and disclosing the identity of the wrong-doers. It includes disclosure of information crucial to the claim such as details of the contents or identity of the beneficiary of a bank account.
This order is also recognised in a number of offshore common law jurisdictions.
The requirements that have to be satisfied to obtain an order are:
a) A wrong must have been carried out or arguably carried out;
b) There must be a need for an order to enable action to be brought against the wrong-doer; and
c) the person against whom the order is sought must be either i) mixed up in so as to facilitate the wrong-doing and ii) able/likely to be able to provide the information necessary to enable the wrong-doer to be sued.
The application is usually made before the commencement of proceedings and without notice to the wrong-doer. It can also be made without notice to the disclosing party if there is evidence that the disclosing party may notify the wrong-doer with the risk that the assets will be dissipated.
The Court also has power to order a third party who is not mixed up in the wrong-doing but is in possession of evidence that could help in identifying the wrong-doer’s assets to disclose such assets. An order will only be made, however, if disclosure is necessary in order to dispose fairly of the claim or to save costs.
3. Gagging Orders
The victim of the fraud or concealment should consider applying at the same time for a gagging order to stop the third party tipping off the non-disclosing husband, for example.
Although the above three applications may be costly compared to self-help, the costs are likely to be recoverable at the end of the proceedings and this should be compared to the cost sanctions to a civil or criminal complaint.
See our further blog “The problem with search orders – a remedy for the rich”or contact us on 01992 892214 for an appointment.