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Privacy concerns force divorcing couples to settle outside of court

Divorcing parties are now able to use the threat of a loss of privacy as a weapon in settlement negotiations

29 September 2015

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A growing number of high-net-worth individuals are choosing to negotiate their divorce settlements outside of court, rather than run the risk of losing their privacy in the courts.

The growing trend is the result of individuals fearing that the disclosure of their business interests will put them at a disadvantage against their competitors, as well as personal security concerns, law firm Hugh James has said.

Sir James Munby, the president of the family division, issued new guidance on transparency in the family courts in January 2014, overturning previous restrictions on reporting.

However Charlotte Leyshon, an associate at Hugh James, believes the new transparency rules have had the effect of creating an ambiguous situation where what can and what cannot be reported on is unclear, allowing divorcing parties to use the threat of a loss of privacy as a bargaining tool.

'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.'

Leyshon added: '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'.

Divorcing couples do have the option of applying to the judge for reporting restrictions to be applied to their case, but the media must be alerted of this application, giving them an opportunity to contest the restriction.

However simply making this application runs the risk of bringing the case to the attention of media outlets who may otherwise have never taken an interest in the case to begin with.

There is also the option to use mediation and arbitration, which are often less confrontational and more cost effective, but in certain cases court proceedings cannot be avoided.

As a result of this, Leyshon says the 'patchwork arrangements' on reporting on the family courts currently in place must come to an end and be replaced with an exhaustive system.

'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.'

 

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Family