Henry Hood and Anna Roiser examine privacy and transparency in financial proceedings on divorce

Privacy and Transparency in Financial Proceedings on Divorce

Last month, the President of the Family Division, Sir Andrew McFarlane, published a long-awaited report on transparency in the Family Court, calling for a major cultural shift. The report, and a consultation document released on transparency in Financial Remedy proceedings, will likely have significant consequences for the privacy of parties to family proceedings, particularly those involved in financial cases.

The transparency report grapples with the tension between two important aims: enhancing public confidence in the Family Court by increasing transparency and maintaining the confidentiality of those turning to the court for assistance resolving intensely personal matters.

The vast majority of hearings in the Family Court take place in private, meaning that attendance is restricted to the parties and their representatives. Since 2009, accredited media representatives have been permitted to attend private hearings; this was extended to legal bloggers (lawyers attending for journalistic, research or public legal educational purposes) in 2018. However, strict restrictions on their access to documents and on what they can report have limited their ability to inform the public on the workings of the Family Court. As a result, the Family Court has been dogged by accusations that it is a secret court with something to hide.

There is no doubt that calls for greater transparency are justified; as Sir Andrew explains, society has a strong legitimate interest in understanding the work of the Family Court and open justice is a fundamental constitutional imperative. The question is where to strike the balance between transparency and confidentiality. With regard to the latter, Sir Andrew’s concern is primarily for the privacy of children involved in family proceedings.

The report concludes that openness and confidentiality are not irreconcilable, and provides for the establishment of a Transparency Implementation Group to deliver a number of changes; chief among them a presumption that reporting will be permitted in all cases, though in proceedings concerning the upbringing or maintenance of children the anonymity of children and their families will be maintained.

By contrast, the proposals for increasing transparency in financial remedy proceedings (primarily proceedings concerning the distribution of assets on divorce) would not preserve the parties’ anonymity.

It is proposed that a Reporting Permission Order (RPO) be made at the outset of every financial remedy case permitting journalists and legal bloggers to:

• request from the parties within the 28 days before or a after a hearing copies of any documents filed at court which are necessary to enable them to comprehend the factual or legal issues in the proceedings. These documents would need to be provided promptly; and
• report anything they hear in court or read in the documents save for financial information given under compulsion (essentially financial information provided pursuant to a court order or the procedural rules), save that the following could be reported even where provided under compulsion:

• • a broad description of the types and amounts of the assets, liabilities, income, and other financial resources of the parties, without identifying the actual items, or where they are sited, or by whom they are held; and
• a broad description of the open proposals of the parties giving only the monetary value of the proposals and without identifying actual items.

The judge in a particular case could adjust what was publishable in respect of that case. Whilst the names and schools of minor children would not be publishable, given that the parties’ names and photographs could be published, it would not be difficult to identify their children.

Hunters’ Family Department has submitted a response to the consultation, setting out that whilst we recognise the need for increased transparency in the Family Court, we are concerned that the proposed RPO does not strike quite the right balance between transparency and privacy in financial remedy cases.

We noted that the details of one’s financial resources, even in outline, are highly sensitive. Many people choose not to reveal their financial situation even to close friends and family, and in particular to their children. Social interactions and relationships can be influenced by knowledge of a person’s financial resources. We suggested that the proposed approach of permitting the reporting of limited financial information on a non-anonymised basis would facilitate only limited transparency and come at a significant cost to the parties’ privacy; whereas allowing publication of more detailed information on an anonymised basis would better promote transparency whilst also protecting privacy.

We also highlighted that under the proposed RPO information about the parties’ assets could be published at a very early stage in the proceedings, and emphasised the risk that one party could use the possibility of publicity to put inappropriate pressure on the other party to compromise the proceedings. We raised a concern that the proposed RPO would protect from publication only financial information given under compulsion, implying that non-financial information – which may be highly sensitive, for example with regard to a party’s health – would be publishable.

Other concerns we raised included the risk that were the RPO to be implemented, parties may choose to provide information only under compulsion to avoid it becoming potentially publishable. Making information disclosed voluntarily vulnerable to public disclosure might, we think, slow down progress, reduce the chances of early settlement and potentially result in additional disclosure or injunction applications, thereby increasing costs.

Shortly after the consultation document was released, two judgments were published by Mr Justice Mostyn (BT v CU [2021] EWFC 87 and  A v M [2021] EWFC 89) in which he set out that going forward his default position would be to publish financial remedy judgments without anonymisation – a reversal of the current position under which the majority of financial remedy judgments selected for publication are anonymised. Mostyn J explained that his position reflected the increased emphasis on, and move towards, transparency in financial remedy proceedings.

We hope that the concerns expressed by financial remedy specialists will be taken into consideration before measures to further transparency in financial remedy proceedings are implemented, but the general direction of travel is clear. In practice, parties keen to minimise the risk of details of their financial proceedings be published are likely to turn to arbitration, in which parties jointly instruct a trained family law expert to determine their dispute. Not only is arbitration private, it is more flexible and efficient than court proceedings. If there is a flight to arbitration, the result may be less transparency overall, as the determination of financial disputes moves from taking place behind the partially closed doors of the Family Court to behind the fully closed doors of arbitration.