One incentive for couples to privately negotiate financial settlements in their divorce is to avoid details of their family finances becoming public. Financial details might enter the public domain as a result of a Financial Remedy Court (FRC) hearing and subsequent published judgment.
Even when names are anonymised it’s often possible for journalists and others to work out who the parties involved in a particular case are. The possibility of unwanted publicity is particularly acute in ‘big money’ cases involving high profile celebrities and businesspeople who might have a natural desire to fiercely guard their privacy.
Potential publicity is one reason why we have seen an increase in ADR as a way of dealing with financial claims on divorce.
Gallagher v Gallagher (2022)
Sometimes there is confusion – even disagreement – among family judges and legal experts – over the issue of what should and should not be disclosed in family court judgments that become publicly available.
In the case of Gallagher v Gallagher (2022) High Court judge Mostyn J very clearly came down on the side of transparency when it comes to public disclosure of financial matters.
The Gallagher case involved a wealthy couple whose matrimonial assets were valued in the tens of millions The husband made a robust application for reporting restrictions or a so-called anonymity order to be imposed in the case. His application was widely drawn – seeking anonymisation of anything that:
- might identify the parties, the children, the children’s school, the property where the children are living, or the companies in which the husband was a director; or
- that would disclose the facts and matters raised in court during the hearing
One of the major issues for discussion in the case was the value of the husband’s construction business, details of which he argued were highly commercially sensitive.
Mostyn J agreed with a representative of the Press Association who addressed the court on one key issue. That was the argument that if very rich businessmen are in court fighting at vast expense with their ex-spouses over millions, then the public has the right to know who they are and what they are fighting about. Judgments should therefore name names. Redactions can be made of commercially sensitive information, but only to the extent that they are strictly necessary – and the redactions should not ever obscure the way the court has decided the case.
Crucially, Mostyn J found that the relevant Family Proceeding Rules only provide for partial privacy at the hearing itself. The rules, he concluded, have nothing to do with secrecy as to the facts of the case. In his opinion the general practice of anonymising financial remedy judgments in their entirety is ‘completely at odds’ with the correct interpretation of the rules.
Transparency in the FRC
Mostyn J cut a fairly isolated figure on the issue with many other judges taking the view that there should be less transparency when it comes to financial judgements. As the lead national judge for the FRC however Mostyn J’s view on such an important issue carries a lot of weight. He requested a full investigation into the issue, and the result was a 2023 report on transparency, produced by a group of judges and lawyers. It’s findings, in contrast to the view of Mostyn J were that:
- On anonymity- Although Mostyn J’s judgments argue that allowing parties to remain anonymous is not in accordance with the law and he states that he will as a general rule publish the names of the parties in all FRC cases, this is not presently a course followed by other judges. The report advised that the usual position should be that parties retain their anonymity. (Although this could be lost as a result of relevant conduct/other reasons.) The report authors believe this would provide more certainty for parties and their advisors.
- On the reporting of judgments – The law is unclear, and journalists are unsure as to what they can and cannot report. The authors of the report suggest that if journalists attend a hearing they should obtain a Reporting Order. Ideally this should permit reporting subject to anonymisation. The report acknowledges that anonymisation is likely to mean journalists will be less interested in reporting FRC proceedings.
There’s clearly a tension between Mostyn J’s approach on the one hand and the conclusions of the transparency report and many judges on the other. For clients going through divorce one way to avoid publicity is to go down the ADR route. We have discussed Early Neutral Evaluation and private arbitration previously. If you are concerned about publicity resulting from your divorce financial remedy we would be happy to advise you on suitable options.