Reading Between the Lines: Adverse Inferences

One of the most common concerns that clients raise when first consulting a family lawyer is to ask what will happen where a spouse is deceptive about his or her finances or fails to provide full and frank disclosure within divorce proceedings.  Sadly, such concerns are often found to be reality.  The courts expect the parties to both engage with the process and provide full and frank disclosure but in many cases individuals seek to conceal the true extent of their wealth or income.  Whilst there are a number of tools that the court can use to investigate and compel disclosure (such as third party disclosure orders) there are cases where the picture remains incomplete.  In those circumstances and to try to clarify the position it may fall for the court to be invited to draw “adverse inferences”.  This is where the court makes assumptions against a party where that party has failed to present their true financial situation.

This has been demonstrated in a small money case where the parties were acting as litigants in person.  In the recent case of HJ v QY [2026] EWFC 245 the husband failed to properly engage with proceedings, failed to file supporting evidence and gave a presentation that the wife did not believe accorded with reality.  She obtained a number of third party disclosure orders which helped her establish the picture but then turned detective to be able to demonstrate to the court that the husband was living a life that was at odds with his financial presentation to the court.  She was able to demonstrate this by looking at his social media which showed him “having a penchant for designer clothes and holidays”.  This was at odds with his presentation of having a depressed income.  She also gave evidence about the standard of living that they had enjoyed whilst together which further undermined his presentation.

The husband was found to have deliberately attempted to conceal his financial position to leave the wife at a disadvantage.  The judge felt able to draw inferences from the material that the wife had been able to put together that the husband had significant undisclosed income and access to assets and that he was spending money on himself to the detriment of the wife and their child.  He was ordered to pay the wife £110,000 and to pay a further £750 to the Access to Justice Foundation who had provided the wife with pro bono representation for the hearing.

When drawing inferences the court must take a principled approach and only draw inferences that are reasonable on the basis of the presentation before the court.  In HJ v QY the wife was commended by the judge for her tenacity in persevering to establish the husband’s financial position and “had not given up when faced with wholesale non compliance by H as to his means.”