Is transparency the key to thawing an asset freeze? // Image: Shutterstock
While most family lawyers aim to make the divorce process as smooth as possible, feuds over assets can sometimes lead to protracted litigation. This is particularly true for UHNWs. When a partner is suspected of attempting to hide wealth, a judge may freeze all matrimonial assets to ensure fair distribution and allocation of holdings.
Lucy James, partner at Trowers & Hamlins specialising in commercial litigation, notes: ‘It is said that business and family do not mix well; that is particularly so when commercial and matrimonial interests come into conflict.’
As UHNW wealth increases internationally, there have been rare cases of the UK courts ordering assets across the globe to be frozen. However, putting a pause on a person’s international transactions can be difficult, as the UK courts do not have dominion over every part of the world.
James adds: ‘Freezing orders can catch assets across multiple jurisdictions and even those held by third parties. Unexplained or unusual transactions may trigger the Court to act.’
One notable case was Akhmedova v Akhmedov – a highly reported split between Russian billionaire Farkhad Akhmedov and his former wife, Tatiana Akhmedova. Having filed for divorce in London in 2013, Akhmedov was ordered to pay his ex-wife just over £453 million. However, Akhmedova initially received only £5 million from her ex-husband, whose fortune today sits at $1.6 billion, according to Forbes.
The billionaire attempted to avoid paying this sum in part by transferring ownership of his superyacht, worth an estimated £340 million, and his £110 million art collection to Liechtenstein-based trusts. Akhmedov’s assets were promptly frozen worldwide, with the UK courts facing complications when freezing the couple’s superyachts, which the family courts in Dubai had dominion over. The couple eventually reached a settlement outside court in 2021. Their son, Temur Akhmedov, was found by the High Court in the same year to have helped his father hide millions of pounds worth of assets from Akhmedova.
[See also: Potanina v Potanin: Landmark decision in favour of wife ‘reinforces London’s reputation as the divorce capital’]
The freezing of assets, while rare, can apply to a multitude of asset classes, notes one family lawyer at Vardags, Nikki Corrie.
Content from our partners
‘One party stole my client’s supercar, sold it and would not confirm the proceeds would be held to a joint order and in a similar vein would not hold insurance proceeds from a claim related to my client’s stolen jewellery and handbags,’ she says. ‘This was in circumstances where the other party had already spent significant sums of matrimonial funds.’
Corrie notes other examples of one person transferring assets out of jointly owned companies, resulting in invoices not being paid and another transferring 90 per cent of his interest in a matrimonial company to another family member at a significant undervalue, with both cases resulting in asset freezes.
‘In my experience, matrimonial assets are frozen in circumstances where the other side are either actively threatening to move assets around, are refusing to commit to maintaining the status quo or have already taken steps to transfer assets out of their spouse’s reach,’ she tells Spear’s.
James also warns: ‘Corporate third parties can be caught up in proceedings, and the uncertainty caused by a freezing order may affect a company’s value.’
[See also: The best family law barristers]
Litigants are well advised to be cautious when considering freezing orders against businesses, and applications are only made where the evidence absolutely demands it, argues Luke Scarratt, a family lawyer at Payne Hicks Beach, as it can be a risky move for the person making the application.
‘Typically the spouse that applied for the freezing order would be liable for any damages incurred by their spouse or the business,’ he says. ‘That is one of the factors that will play into a discussion about whether to apply for a freezing order and over what assets.’
To avoid an asset freeze, transparency is key
Being explicit with the courts about every financial decision made during proceedings can help avoid an asset freeze, adds Scarratt.
‘Getting early advice is crucial, to avoid being overtaken by events,’ he says. ‘If I’m acting for a client who needs to move value outside the jurisdiction or sell family assets, then it’s important to provide a full explanation in advance of the rationale for the transaction.’
Scarratt adds: ‘The other side will be jumpy about losing value and so providing accurate and consistent explanations can help avoid an over-hasty application.’
[See also: Spear’s Family Law Survey 2025: Experts identify core trends]
Seconding Scarratt’s notion that clarity and transparency are key to preventing an asset freeze is Fladgate family law division partner, Catherine Costley.
‘I would say one of the most common reasons for matrimonial assets being frozen is panic when a threat is made in the heat of the moment or misunderstanding about a transaction,’ she says.
While noting that she will emphasise to her client the risk of an asset freeze application failing, Costley acknowledges the occasional need for such a legal move.
‘A freezing order is an essential piece of kit in the family lawyer’s tool box, especially when dealing with international families,’ says Costley. ‘I would always rather fix assets here in this jurisdiction than need to chase them around the world.’
Further emphasising the need for transparency to enable smooth divorce proceedings is Lidia Cantele, a partner within Harbottle & Lewis’ family law team.
‘Preserving the financial status quo is important so as not to ‘spook’ the other side,’ she says.
Cantele notes that, while there is a high bar for obtaining a freezing of assets, it can be a helpful way to secure some certainty during a divorce involving international assets.
‘If your spouse is primarily based abroad but still has significant assets in England and Wales, it might be helpful to seek a freezing order at the outset if you are worried about them moving assets out of the jurisdiction during proceedings,’ she says.
[See also: How non-court dispute resolution is changing family law]
International assets can be frozen by UK courts, especially when there is a risk of them dissipating, but it is much easier in name than in nature, argues family lawyer Emma Williams at Harbottle & Lewis.
‘You then have the additional complexities of serving these on the relevant third parties overseas, such as banks or trustees in other countries, who may or may not engage and needing local legal advice in all of the relevant jurisdictions to ensure this is done properly,’ she says.
Williams adds that freezing assets is uncommon in UK courts today.
‘It is rare for freezing orders to be made against matrimonial assets, given the very draconian nature of freezing someone’s assets,’ she says. ‘It is an order of last resort.’
