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 High Net Worths forced to negotiate divorce settlements rather than risk loss of privacy

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  • Inconsistency over whether reporting restrictions should be allowed

 The loss of privacy in divorce cases is pushing divorcing High Net Worth couples towards negotiated divorce settlements in order to avoid their assets, financial arrangements and other personal details being reported in the press, says Hugh James, the top 100 law firm.

Hugh James say that while divorcing couples are able to apply to the judge for reporting restrictions, even  the process of applying for restrictions can draw the attention of the media to the case.  Couples requesting reporting restrictions are required to alert the media to their application for privacy to give them the opportunity to contest it.

Hugh James adds that some high profile couples are also concerned that their personal security might be put at risk if sensitive financial documents are leaked.  Where the couple have significant business interests, then the disclosure of information about their finances may also give an advantage to their competitors.

Since February 2014, new rules have overturned previous restrictions on reporting judgments in family law cases, and some Family Court Judges now opt to sit in completely open court unless there is a specific need to protect the identity of a minor or vulnerable adult.  Since 2009 journalists have been able to attend most family law hearings.

Charlotte Leyshon, Associate at Hugh James comments: “The potential glare of publicity around a divorce case is increasingly something that High Net Worth clients are taking into account.  It is often more than simply not wanting their relationship issues discussed in the paper; they may have good reasons not to want their finances discussed.”

“Avoiding publicity is definitely more of an issue, and mediation and arbitration are a possible solution.  If these routes are less confrontational and more cost-effective than a trial, then that’s a good thing.”

“However, some cases are genuinely intractable.  If one party is being unreasonable, then their ex-partner may be forced to settle on unfair terms simply to avoid court.  In those circumstances, the threat of publicity becomes a weapon in the negotiation.  That is surely not what the move towards greater transparency in family cases was intended to achieve.”

Inconsistency over whether reporting restrictions should be allowed

Hugh James adds that for couples wishing to avoid publicity, the choice between a mediated settlement or a trial is complicated by conflicting views amongst the judiciary over the issue of reporting restrictions.

A recent ruling by Mr Justice Mostyn explicitly criticised approach of another judge, Mr Justice Holman.  Mr Justice Holman takes the view that reporting restrictions should only be granted in a limited number of cases, and that ‘the people must be allowed, so far as possible, to see their courts at work.’

Adds Charlotte Leyshon: “at the moment, the rules around privacy are pot luck – there is no generally accepted principle of what may be reported, and what may not when a privacy application is made.”

“Even the decision about whether or not to apply for reporting restrictions is a gamble, especially for those couples who are not obvious tabloid fodder.  By applying for reporting restrictions you run the risk of alerting the media to a potentially interesting trial, when it might otherwise have gone under the radar on a busy week.”

“We have had several attempts to introduce more comprehensive rules to balance the need for transparency with individuals’ legitimate desire for privacy, but we have ended up with patchwork arrangements.  It is an area that needs urgent review.”

ENDS

About Hugh James

Hugh James is a long-established Top 100 firm offering a comprehensive range of legal services across the UK from offices in London and Cardiff.

Our clients range from owner-managed businesses and private individuals to multinational corporations, financial institutions, public bodies and not-for-profit organisations.

Our 44 partners and over 500 staff pride themselves on offering advice and support that is tailored to the very specific needs and goals of each business, organisation or individual.

 
 
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