The UK’s Supreme Court just made life a whole lot harder for spouses who hide their assets in an attempt to lower divorce settlements.
The court ruled on Oct. 14 that two divorce settlements should be reconsidered because the husbands involved lied to conceal their true worth. This could open the floodgates for cheated ex-partners to renegotiate claims.
The landmark ruling will likely make London, sometimes dubbed the divorce capital of the world for the uber-rich, even more of a divorce hot spot.
“The decisions are likely to reaffirm London as the divorce capital of the world, as they are placing a great emphasis on the need of the parties to provide full disclosure,” Claire Blakemore, a partner at Withers Worldwide in London told Quartz.
Alison Sharland and Varsha Gohil argued that their divorce settlements were unfair because their husbands defrauded them. Sharland was originally awarded £10.35 million ($15.95 million) in cash and properties from her ex-husband. It later emerged that her husband had lied about the value of his software company, AppSense, the Telegraph reported, and was planning to take the company public. Ultimately, his stake was reportedly worth more than $150 million—at least four times what he had first admitted.
In 2004, Gohil was awarded £270,000 and a Peugeot car. Six years later, her ex-husband was tried and jailed for fraud and money laundering more than £37 million.
In both cases, lower courts ruled the men had lied, but did not force the men to pay more money. Now, their cases will be reopened.
Many wealthy couples that own property in the UK choose to divorce there, because of the courts’ reputation for awarding large settlements. One 2012 survey in the Times of London found that a sixth of divorce cases heard by English courts involved foreign nationals (paywall).
Ayesha Vardag, a lawyer who has represented a number of wealthy clients in high-profile told the Guardian: “The principle that there is no discrimination between breadwinner and homemaker is the cornerstone of why the English jurisdiction is seen as a particularly fair one for the financially weaker spouse.”
Unlike other countries that set fixed timetables for payments and limit awards, London operates by a set of guiding principles that is more open to judicial interpretation. “Not only do you have the opportunity to get more money, but you can get it for longer,” Julian Bremner, a partner with the law firm Rayden Solicitors, told the New York Times last year.
That list may grow as ex-partners scramble to find lies, mistruths and honest mistakes in asset calculations. “We probably will see an increase in applications to overturn settlements,” said Blakemore.