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Tycoon privacy ruling a 'shot in the arm' for out-of-court divorce

29 November 2010

The decision by the Court of Appeal not to grant a husband an anonymity order is the latest example of the growing judicial pressure on couples to keep their divorces out of court.

Panaghis Lykiardopulo, who heads one of the oldest Greek ship-owning families, was ordered by Baron J last year to transfer £20m worth of assets and cash to his former wife after it emerged that he had deliberately sought to shield some of his assets from the matrimonial pot.

At the same time he secured an anonymity order on the grounds that publication of his name would be detrimental to his business and would affect his health.

Allowing the wife’s appeal against the order, Lord Justice Thorpe issued a warning to other feuding couples last week, saying “a great deal of legal expertise, no doubt at great cost to the parties, has been devoted to the struggle to establish either full public scrutiny or no public scrutiny of the outcome of the hard fought ancillary relief proceedings. The effort and expense hardly seems proportionate.”

In his ruling in Lykiardopulo v Lykiardopulo [2010] EWCA Civ 1315, Thorpe LJ said arguments over the publication of the judgment “had slid into public reporting as an aid to enforcement”.

While suggesting that publication should normally be kept as a separate issue, he said the need for privacy could justify that a judgment should be redacted “wherever that protection can be given without reducing or veiling the scale of their litigation misconduct”.

Concluding in favour of the wife, Thorpe LJ said: “If this signals a shift in the practice in cases in which the judge has found significant breach of the duty by commission then I believe that the shift is both principled and practical.”

Divorce cases in the High Court will only be reported using the parties’ initials but couples lose anonymity if their divorce reaches the Court of Appeal, unless the parties can make a convincing case for anonymity.

Only in exceptional cases where the facts would lead to the identification of the parties would parties be named in High Court decisions, as in the Sorrell or McCartney cases, for instance.

Family lawyers used to assume that their clients were ‘safe’ until their cases reached the Court of Appeal, but couples should realise that they risk jeopardising their privacy if they take their divorce to court, according to Farrer & Co’s head of family, Simon Bruce.

The Lykiardopulo case may be an extreme example of what awaits litigants breaking the duty of “full, frank and clear disclosure” but it should prompt those contemplating divorce to consider alternatives to court proceedings.

“It’s another shot in the arm for private arrangements, roundtable settlements, and avoiding courts at all costs,” said Bruce. “The Court of Appeal’s mission seems to be to try and keep family cases out of court, and this is another incentive to anyone advising any man or woman of substance not to go to the High Court.”

Most celebrities and wealthy individuals will be keen to avoid publicity and will shun court proceedings, and Bruce said there is real interest in private proceedings.

Bruce also said the question ties in with that of the autonomy of the parties, as recently underscored by the Supreme Court in the Radmacher case.

“The idea is that people should be able to control their own marriages and destinies,” he said, “so telling people to opt for private settlement means they’re in control of the process; if you go to court, the judge gets control, he’s the one in the driving seat.”

For cases of non-disclosure, such as Lykiardopulo, publication of a judgment is another weapon acting as a disincentive for anyone lying in the witness box. “If they do they’ll have their lies paraded around the world,” continued Bruce.

As financial and time pressure grows on family courts the Lykiardopulo ruling could trigger a change in direction in divorce procedure, with more lawyers actively keeping their clients out of court.

If they don’t the odds are that there will be more such cases as the Court of Appeal desperately tries to ensure that court time is spent on more deserving cases, including complex cases and cases involving children.

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