25 September 2015

Family proceedings about money - a very private affair?

Amanda Bell
Senior associate | UK

'Reporting how a case is conducted, and what legal points are raised, in an abstract way is one thing; laying bare the intimate details of the parties' private lives is altogether another.'

Mr Justice Mostyn, DL v SL [2015] EWHC 2621

The question of whether family proceedings, and specifically those relating to parties' finances, should be held in private or public has been a hot topic in the family law world for some time. Over the last few weeks, the issue has hit the mainstream media on the back of Liam Gallagher and Nicole Appleton's divorce. The Family Procedure Rules specify that proceedings shall be heard in private (FPR 27.10). However, media may attend the hearing pursuant to FPR 27.11 and, the reality is, the question of whether the media are admitted and, if so, the extent to which they can report what they hear is decided on a case by case basis depending on the facts. There are two schools of thought on the issue. In one camp, notably occupied by Sir James Munby, President of the Family Division, and Mr Justice Holman, there is the view that financial remedy proceedings should be held in open court. In other words hearings about the division of assets on divorce should be public and, the starting point should be that there are no reporting restrictions imposed upon the media. Of course, the principle of open justice is entrenched in our legal system and for good reason. The administration of justice in open court enables the public, led by the media, to take on role of 'watchdog' and ensure that trials are properly adjudicated. Open court may also add pressure on witnesses to tell the truth. Another reason, which is widely heralded by the press as a reason for the family courts to open their doors, is to enable the public to learn about how the family courts operate and encourage discussions about the processes that function in the family justice system. The opposing school of thought, of which Mr Justice Mostyn is a member, argues that financial remedy proceedings are a 'quintessentially private business' and the privacy of the parties involved should be fiercely protected, particularly when parties are compelled to provide full and frank financial disclosure. Mr Justice Mostyn made a persuasive argument for privacy in his recent judgment in DL v SL (citation above), The outcome of dividing finances on divorce in England and Wales is notoriously unpredictable. We operate in a discretionary jurisdiction where the outcome of any one case will usually depend on the judge deciding it, albeit within a bracket of possible outcomes. This is enough for most parties to settle outside of court rather than going to a Final Hearing. However, for those parties that are unable to settle and instead find themselves on the course to a Final Hearing, they also have the added uncertainty of whether their case will be held in private or not. The reality is the media are largely uninterested in the vast majority of cases which are heard in family courts up and down the country. However, if either of the parties to the divorce are high profile or if the case involves a lot of money, the media are fascinated and, for the parties involved, the risk of family affairs becoming public knowledge is a very real one. An additional, but largely unspoken, difficulty for those wishing to preserve their privacy is that they may have to embark on satellite litigation to exclude the media, and will incur the costs of that litigation. Short of Parliament intervening to clarify how the rules should operate, the only viable alternative to the risk of private matters being heard in public is for litigants to opt for the 'private' system. Family arbitration is slowly becoming more popular with parties that can afford it. Arbitration provides parties with the confidence of a legally binding ruling but with the security of confidentiality. The parties have the choice of arbitrator (who has trained as such, usually a retired High Court judge, a practising barrister or a practicing solicitor) and the flexibility of choosing where their arbitration hearing can take place. Unlike the Judges operating in the overburdened court system, arbitration also has the advantage of an arbitrator who has sufficient time to focus exclusively on the case in question for the entire length of the hearing. More and more parties are also opting to 'go private' earlier on in the financial remedy process. For wealthy clients, 'Private Financial Dispute Resolutions' are almost the norm. Again, clients can choose their adjudicator, the location of their 'hearing' and will benefit from the undivided attention of their Judge on the day of the hearing. Of course, one side effect of parties opting for 'the private system' is a two-tier family justice system where those that can afford it buy themselves privacy. Whether this is just, is another issue altogether and a topic for another blog!

Amanda Bell Senior associate | London

Category: Blog