International Divorce Lawyer on Asset Disclosure rules under European and American law – by Marion TD Lewis
In the United States, in just about every state, parties in a divorce action are legally required to make a full disclosure of their assets when they divorce – under penalty of perjury. The same is true in England. But in continental Europe, disclosure rules can best be described as a “maze” as was noted in a recent article in the Guardian. Different countries’ laws bestow varying degrees of culpability on warring divorcing couples for failure to fully disclose their assets in a divorce litigation. But with certain constants. The constant thread is that as a general rule, there is less emphasis on full disclosure in the civil law jurisdictions than the common law.
In Germany, France, Italy and Spain, women are particularly at a disadvantage when they are involved in a “big money” divorce case. If a divorce is commenced under the laws of these countries, women can expect to emerge with less financial wealth than under common law schemes such as America and Britain which tend to be more generous to the spouse with fewer assets – and this, typically, is the wife. Part of the reason for this is the asset discovery rules in these jurisdictions. Parties are typically not required to “fully disclose” assets. In some countries, like Italy, it has been held that the parties may disclose as a matter of “honor” but there is no legally enforceable obligation to do so. As noted earlier, the law is a bit different in the UK: In a recent article in the Guardian, “Warring Across Waters” the author wrote:
English divorce law requires a full and frank disclosure of a person’s financial position under oath. If they lie, they could be convicted of perjury. The husband may be unwilling to contemplate such expense, and so decide to seek a settlement under the laxer regimes of other countries. In Italy, for example, individuals give disclosure merely ‘on their honour’. Assets are much harder to trace without the full force of court orders to oblige disclosure. Remember, across the EU, different procedures, different laws and different levels of disclosure apply. It is, without doubt, a legal maze and minefield rolled into one.
Asset disclosure rules are also markedly different in the United States. I was reading the website of international divorce lawyer Jeremy Morley and he had this to say:
“In California, the spouse with knowledge of personal financial matters has the affirmative and continuing duty of making disclosure and is at significant risk if the disclosure is insufficient. In civil law countries, the spouse with such knowledge has little or no obligation to disclose anything and may play “hide and seek” with assets in a “game” in which the asset-holding spouse can do the “hiding” and the other spouse has few methods of doing the “seeking.” Thus, in Austria, neither the General Austrian Civil Code nor the Austrian Marriage Act contain any explicit provisions obliging the spouses to provide each other or the competent authority with information on their income and assets. If a spouse demands a certain amount, the other spouse needs to show that his or her assets are not as claimed, but there is little or no way to force a thorough tracing of assets. In Germany, Section 1580 of the Civil Code requires divorced spouses to provide information to each other as to their income and assets, and the Code contains mechanisms to compel the delivery of such declarations, but there is little that a party can do in advance of trial to probe such declarations or to search for suspected assets. In Spain, Article 774(2) of the Civil Proceedings Act authorizes the courts — but not the parties themselves — to request financial information that they consider necessary either from the spouses themselves or from third parties, especially for the purpose of deciding on the economic effects of divorce. If the spouses disagree on financial issues and the respondent refuses to divulge his or her assets or hinders efforts to obtain such information, the courts may resort to indirect proof or proof by circumstantial evidence in order to resolve such issues. This means that the power of an aggrieved plaintiff is extremely limited and he or she must hope that the judge is extremely proactive. more
For the financially disadvantaged spouse, they would obviously have to think strategically about where they file the divorce. If it is possible, it might behoove them to forum shop in order to get the best result. But whatever jurisdiction they choose would have to have a connection to their actual lives whether as residents, domiciliaries, or what have you. The new EU regulations, Brussels II and Rome III, might provide some help with that. In particular, Rome III:
allows international couples in the member states where it applies to agree in advance which law will apply to their divorce or legal separation, as long as the agreed law is the law of the member state with which they have a closer connection. In case the couple cannot agree, the judge can use a common formula for deciding which country’s law applies. This Regulation 1259/2010 does not affect the application of Regulation 2201/2003. More
This certainly won’t prevent conniving spouses from hiding assets. But a more favorable jurisdiction might compel full disclosure of assets which would then allow the financially disadvantaged spouse to claim and obtain a fairer, better settlement. If one of filers is American, it would seem to make sense for him or her to try to get that case commenced on home turf as opposed to in a country in continental Europe.
-By Marion TD Lewis
Founder and Legal Director of Divorce Saloon International
International Divorce lawyer and Consultant
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