The Panama Papers - Reopening Divorce Settlements

Following the revelations known as “the Panama Papers”, Giambrone’s family lawyers consider the potential ramifications for previously settled claims for financial relief in divorce proceedings in England.

The Panama Papers are over 11 million leaked files from Mossak Fonseca, the world’s fourth largest off-shore law firm, used by many, it would seem, to hide money from the taxman.  The documents show how offshore tax regimes are exploited, providing their users with a veil of secrecy.   The documents have revealed the names of politicians, sports stars and celebrities who have benefited from the secrecy provided by setting up off-shore.  The same is true for some wealthy spouses who, according to International Consortium of Investigative Journalists, may have used offshore companies to hide assets from their partners (or at least make it difficult for their partners to discover how much they are truly worth).

“When dealing with financial provision on divorce in England, spouses owe a duty to the court to provide full, frank and up to date disclosure of their assets and circumstances – says Daniel Theron, Associate in the Family team -  If they fail to do so any settlement agreements or court orders could be set aside and the matter reconsidered. ”

Last year the Supreme Court heard the cases of Gohil v Gohil and Sharland v Sharland.  In these cases, the former wives sought to challenge the financial settlement on the basis that they were unfair and their former husbands had not disclosed the true value of their assets and wealth.  The court was unanimous in both cases, finding in favour of the ex-wives.  The cases created a precedent whereby non-disclosure of assets could cause financial settlements to be reopened. 

“These decisions send out a message to everyone going through a divorce that they cannot lie in the family courts and get away with it – continues Theron - Dishonesty or fraud involving failure to disclose financial assets are grounds for renegotiating previously resolved disagreements, according to unanimous judgments by a bench of seven justices

Information contained in the Panama Papers about the assets of wealthy divorcees could encourage renewed litigation if it appears that the ex-husband/wife did not declare their true wealth having sought to hide behind the veil of secrecy apparently given by the use of off-shore trusts and companies.