Husband jailed for not disclosing his assets in divorce case

23 January 2013

The divorce case of Young v Young has been rumbling through the courts for four years. It got going just as the financial crisis took hold in 2008/2009.  Scot Young, in sunnier times, was supposed to have been worth £400 million. The couple had children together, and Michelle Young is seeking a full payout on divorce.

The starting point for her claim is 50:50 (following a House of Lords decision, White, in 2000) so she could receive a very large sum indeed. However, the husband, who was a fixer for oligarchs and the internationally super-rich, claims he is penniless. He says he lost much of his fortune on ‘Project Moscow’ - a disastrous venture in Russia.

Mr Young may have had a plausible backdrop to his story, but his wife has relentlessly obtained orders that he disclose his assets, and that he give an explanation, if he lost money, of how he did so.

Problematically for his own case, the husband has provided sketchy information at best. He has failed to answer basic questions. On several occasions, he felt too ill to attend court at the last minute, thereby delaying the proceedings.

Back in June 2009, the High Court made an order committing Mr Young to prison for not respecting the Court’s supposedly powerful and wide-ranging disclosure orders, but the Court suspended that sentence.

The husband has evaded the activation of that suspension for nearly four years, which itself is remarkable (disclosure usually takes three to four months). He has pleaded psychological conditions, induced in part, he says, by his wife harassing him with a battalion of private investigators and forensic accountants.

Last week, the court’s patience finally snapped in this case and the husband was sentenced to six months’ imprisonment. Mr Justice Moor’s decision on 16 January said that Mr Young had not so much provided false disclosure, as not engaged properly at all.

The judge rejected the alleged stress as a reason to delay matters. Actual imprisonment for non-disclosure (as opposed to a suspended sentence) is unheard of in recent times. The court can usually deal with it in other ways (for instance passport restrictions, or making assumptions about the level of wealth). The Young case sends out a warning signal for serial offenders.

Interestingly, Mrs Young says she is now backed by rich friends and has unlimited funds to pursue her estranged husband. She would, of course, say that as part of her litigation strategy.

Earlier, she was taken on and then dropped, as too risky, by specialist investors Harbour Litigation Funding, who would have been looking for an investment return. This is different from the traditional bank or litigation funding loans now available, with high street rates of interest (or loss leader rates to attract investment clients later).

Also available are A v A orders, which permit the financially weaker party to seek from the court an order for litigation funding from the other party to the case. Of course, such orders are of no use to Mrs Young against her husband, who maintains to date that he is worth nothing. He may, or may not, be reconsidering that assertion from prison now.

First published in Spear's Wealth Wednesday, 23 January 2013

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