The recent Court of Appeal decision in Helliwell v Entwistle [2025] EWCA Civ 1055/1071 has been watched closely by family lawyers for its implications on prenuptial agreements and financial disclosure. But beyond family law, the case also raises uncomfortable questions for legal professionals about fraud risk, anti-money laundering obligations, and from 1 September 2025, potential exposure under the Failure to Prevent Fraud offence in the Economic Crime and Corporate Transparency Act 2023 (ECCTA).
The case: deliberate non-disclosure in a pre-nup
In March 2025, the Court of Appeal heard arguments that Ms Jenny Helliwell had failed to disclose approximately 73% of her wealth when entering into a prenuptial agreement with her then-husband, Mr Entwistle. Appendices meant to list assets were left blank; her declared income omitted substantial rental and business interests tied to a Middle Eastern property portfolio.
The Court found the non-disclosure to be deliberate and fraudulent, vitiating the agreement. The matter is now remitted to the High Court for a fresh needs-based assessment.
While the judgment is firmly grounded in matrimonial law, its factual findings including concealment of assets, false representations in legal documents, and possible tax-related motives, could trigger financial crime concerns.
Where family law meets fraud and AML risk
Although family disputes are not typically thought of as money laundering cases, the facts of the case show multiple red flags:
- Fraudulent misrepresentation: Expressly warranting full disclosure in a binding agreement while concealing £48m in assets.
- Potential tax evasion: Non-disclosure partly justified by “tax affairs” which is potentially tax evasion.
- Complex asset structures: Middle Eastern real estate without reference to high risk jurisdictions, possible use of corporate vehicles, timing and control over the signing process.
- Shielding assets: Using a legal instrument (the pre-nup) to protect assets from future claims on a knowingly false basis.
Under POCA, any benefit derived from criminal conduct including fraudulent asset concealment, constitutes criminal property. This means that lawyers, if they suspect they are being used to facilitate such conduct, could be under a duty to submit a Suspicious Activity Report (SAR) to the NCA.
Do lawyers have any “right” to mislead the court?
The short answer is no. Under the Solicitors Regulation Authority (SRA) Code of Conduct, solicitors must not knowingly mislead the court. There is no “family law exception” permitting false evidence or fabricated financial disclosure, even in heated matrimonial disputes.
If a lawyer becomes aware that a client’s disclosure is materially false, they must:
- Advise the client to correct it.
- If the client refuses, cease acting (to avoid being complicit).
- Consider their duty to make a SAR if the concealed assets may be criminal property.
Failing to take these steps risks crossing the line from legal representation into potential facilitation of fraud.
Failure to Prevent Fraud dimension from 1 September 2025
From 1 September 2025, the Failure to Prevent Fraud offence under ECCTA applies to large organisations, including law firms that meet the size threshold. The offence is committed if:
- A person associated with the organisation commits a fraud offence (such as false representation, failure to disclose information, or abuse of position) intending to benefit the organisation or its clients; and
- The organisation did not have “reasonable procedures” to prevent such fraud.
In the family law context, risk scenarios include:
- A solicitor knowingly submitting false disclosure forms or witness statements to court.
- Staff assisting in structuring asset transfers to hide them from matrimonial proceedings.
- Failing to identify and act upon suspicious client instructions designed to mislead the court.
If such conduct occurs and the firm cannot show adequate preventive controls, it could face prosecution, even if senior management were unaware.
AML obligations still apply in family cases
Under the UK Money Laundering Regulations 2017 (MLRs), most purely advisory family law work (e.g., divorce petitions, child arrangements) falls outside the scope of the “regulated sector” because it doesn’t involve a relevant business activity such as dealing in real property transactions or managing client funds.
However, family law work can cross into the regulated sector if it involves:
- Handling client funds in property transfers — such as acting in the sale or transfer of real estate as part of a divorce settlement. This is a “real property transaction” under Reg. 12(1)(a) MLRs, triggering CDD obligations.
- Advising on corporate or trust structures holding marital assets — including restructuring or managing assets via companies or trusts. This is a “trust or company service provider” activity under Reg. 12(2).
- Assisting with cross-border asset arrangements — especially where funds or assets are moved between jurisdictions. This can trigger enhanced due diligence requirements under Reg. 33 (high-risk third countries, PEPs, complex structures).
In those cases, the firm is acting in the regulated sector for that element of the matter and must comply with full AML duties: CDD, ongoing monitoring, recordkeeping, and filing SARs where appropriate.
Where suspicious conduct is identified, for example, unexplained offshore structures or assets inconsistent with known income, the legal duty to file a SAR applies, regardless of the case being “just” a divorce.
Could Helliwell v Entwistle trigger a financial crime investigation?
While Helliwell v Entwistle appears on its face to be a civil dispute over a prenuptial agreement, the Court of Appeal’s findings; deliberate concealment of £48 million, potential tax evasion motives, and false representations in legal documents, could form the basis for a much broader financial crime inquiry.
Under the Proceeds of Crime Act 2002 (POCA), investigators could seek to establish whether the concealed wealth constitutes “criminal property.” If so, anyone dealing with those assets, including solicitors facilitating transactions or structuring ownership, could face allegations of committing a money laundering offence. HMRC might also take an interest if the reference to “tax affairs” is interpreted as an admission or indication of unlawful tax evasion, which remains a predicate offence under POCA.
From 1 September 2025, the risk profile expands further. The new Failure to Prevent Fraud offence in the Economic Crime and Corporate Transparency Act 2023 will make large organisations, including qualifying law firms, criminally liable if an associated person commits fraud to benefit the firm or its clients and the firm lacked “reasonable procedures” to prevent it. If, for example, a solicitor knowingly submitted false financial disclosure in matrimonial proceedings, or staff assisted in moving assets to obscure them from a settlement, the conduct could fall squarely within the scope of this offence. Crucially, the SFO and CPS will not need to prove that senior management were complicit, making the risk of corporate prosecution significantly higher.
What will change after Failure to Prevent Fraud?
The potential consequences for legal professionals are severe. Before 1 September 2025, individual solicitors could already face criminal penalties under POCA including prison sentences of up to 14 years, and law firms could be hit with unlimited fines. The Solicitors Regulation Authority (SRA) retains the power to impose regulatory sanctions ranging from financial penalties and practising restrictions to full strike-off for serious misconduct.
These are not abstract threats.in recent years, the SRA fined the firm Amphlett Lissimore £114,000 for anti-money laundering compliance failures, sanctioned multiple firms for inadequate client risk assessments, and struck off a sole practitioner for “widespread and fundamental” non-compliance with the Money Laundering Regulations. In one notable example outside the AML context, five former directors of the collapsed law firm Axiom Ince were charged by the SFO with fraud, forgery, and misappropriating client funds, demonstrating the reputational and criminal fallout that can follow misconduct.
After September, the addition of Failure to Prevent Fraud raises the stakes. Prosecution would hinge on whether the firm can show it had proportionate, well-documented procedures in place to stop such fraud from occurring. This is not a mere formality: government guidance emphasises the need for top-level commitment, detailed risk assessments, proportionate policies, robust due diligence, ongoing staff training, and active monitoring. Without these elements, the statutory defence will fail.
Solicitors and firms do have avenues for defence, but only if they act decisively at the right time. Under the current AML regime, a lawyer who can show they had no knowledge or suspicion that assets were criminal property, carried out appropriate due diligence, and promptly filed a Suspicious Activity Report when suspicion arose, will be better placed to defend against allegations. Where a client refuses to correct materially false disclosure, the only safe course is to cease acting and document the reasons for doing so. Post-September, the same principles apply but with an additional burden: firms will have to evidence that their reasonable procedures were actually applied in the matter in question, not just sitting unused in a policy manual.
More recently, Tasmina Ahmed-Sheikh, a former solicitor and MP, was fined for reckless mishandling of a trust in a family-related dispute, showing that tribunals will scrutinise financial conduct even in ostensibly personal or matrimonial matters. The lesson is that the boundary between civil representation and criminal liability is narrower than many in family law assume, and from September 2025, it will narrow further.
In short, if similar facts arose after the ECCTA comes into force, Helliwell v Entwistle could plausibly become not just a cautionary tale for family lawyers, but the starting point for a combined SFO, HMRC, and SRA investigation, one that could leave both individual solicitors and their firms facing fines, regulatory ruin, and even criminal conviction.
Practical steps for law firms post-ECCTA
To protect against fraud and AML exposure in family matters, especially post-ECCTA, firms should:
- Embed fraud prevention into family law workflows — train staff to spot false disclosure and asset-hiding tactics.
- Strengthen client onboarding — conduct source-of-wealth checks even in matrimonial cases with complex assets.
- Document decisions — if you suspect misconduct, keep a clear audit trail of advice given and steps taken.
- Have a clear escalation policy for suspected fraudulent disclosure, including when to withdraw from acting.
- Integrate ECCTA procedures — ensure your reasonable procedures policy applies across all practice areas, not just corporate crime.
