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Is Your Spouse Hiding Assets? How the High Court Now Tackles Dishonesty in Divorce
Financial Non-Disclosure in Divorce: Lessons from 2026 High Court Rulings
In the jurisdiction of England and Wales, the duty of “full and frank disclosure” is the bedrock of financial remedy proceedings. Two significant 2026 High Court cases, MK v SK and DR v ES, have reinforced that the courts will not tolerate attempts to hide assets or “cry poverty” to avoid fair settlements.
Lara Davies explores these landmark rulings and what they mean for those navigating complex financial separations.
1. MK v SK [2026]: Piercing the Corporate and Trust Veil
This case involved a former tech CEO who claimed his assets were “almost nil.” The wife argued that he had concealed vast wealth within offshore trusts and complex corporate structures.
- The Findings: Mr Justice Peel rejected the husband’s claims, noting his “lifestyle factors” and business dealings directly contradicted his alleged poverty. A key piece of evidence was an email where the husband referred to a supposedly independent structure as “my family trust.”
- The Outcome: The court drew an adverse inference—essentially assuming the hidden wealth existed because the husband was being evasive. The wife was awarded the matrimonial home and a lump sum of £2,025,000.
“The judge adopted a pragmatic approach. Rather than allowing further delays for expert accounting, the court found that if the outcome was unfavourable to the husband, he only had himself to blame for his lack of honesty.” — Lara Davies
2. DR v ES [2026]: Ensuring “Equality of Arms”
This case focused on Legal Services Payment Orders (LSPOs)—where one party is ordered to pay the other’s legal fees to ensure both sides have equal access to justice during a divorce.
- The Dispute: In a case involving contested assets of up to £23 million, the wife sought over £726,000 for legal fees. The husband contested his ability to pay.
- The Ruling: The court reiterated that where a payer’s financial disclosure is “obviously deficient,” the court will not hesitate to make robust assumptions about their ability to pay. The husband was ordered to pay £560,120.
Why “Full and Frank Disclosure” is Essential
As these cases demonstrate, the matrimonial judiciary is increasingly adept at spotting “penurious” (poverty-stricken) presentations that do not match reality. If you are going through a divorce in England and Wales, you should be aware of the following:
| Feature | The Court’s Approach |
|---|---|
| Evasive Trustees | Viewed as a tactic by the spouse to hide information. |
| Lifestyle vs. Income | If your spending habits suggest wealth, the court will prioritise “lifestyle factors” over your stated income. |
| Adverse Inferences | Silence or lies allow the judge to “fill in the blanks” in favour of the honest party. |
Expert View: Lara Davies
“These judgments are a clear warning: the court’s overarching aim is fairness. Attempts to present yourself as living a penurious existence while in reality thriving are unlikely to fool the judiciary. The court will not hesitate to penalise a non-discloser by making orders against them to achieve a just outcome.”
If you suspect your spouse is hiding assets or you need advice on securing legal funding, contact our specialist team today.
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Next Steps: What to Do If You Suspect Financial Non-Disclosure
If you believe your spouse is not being “full and frank” with their financial disclosure, Lara Davies recommends taking the following proactive steps to protect your position:
- Gather “Lifestyle” Evidence: Collect evidence of spending that doesn’t match declared income (e.g., luxury holidays, expensive vehicle leases, or high-end club memberships).
- Review Historic Documents: Look for mentions of trusts, “family funds,” or offshore interests in old emails, tax returns, or mortgage applications.
- Request Questionnaires: Through your solicitor, we can serve a formal “Questionnaire” following the exchange of Form Es, forcing the other party to answer specific queries about missing assets.
- Apply for a Legal Services Payment Order (LSPO): If your spouse has control of the funds and you cannot afford representation, we can apply for them to fund your legal costs to ensure an “equality of arms.”
- Consider Forensic Accountancy: In complex cases involving corporate structures, we can instruct experts to trace fund movements and value private shareholdings.
Contact Lara Davies today for a confidential consultation on your financial settlement.
