High net worths negotiating divorce settlements rather than risk loss of privacy

The loss of privacy in divorce cases is forcing high net worth couples towards negotiated settlements to avoid assets, financial arrangements, and personal details being reported in the press.

Lawyers at top 100 firm Hugh James explain that while divorcing couples are able to apply to the judge for reporting restrictions, the application process can draw unwanted media attention.

Ironically, couples requesting such restrictions are required to alert the media to their privacy application to give them the opportunity to contest it.

Charlotte Leyshon, an associate at Hugh James commented: '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.'

Some clients of Hugh James have expressed concern that their personal security might be put at risk if sensitive financial documents are leaked, or that the disclosure of financial information may give an advantage to business competitors.

'The potential glare of publicity around a divorce case is increasingly something that high net worth clients are taking into account,' added Leyshon. '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.'

She continued that while mediation and arbitration are a possible solution to press intrusion some cases will be forced to go through the court process due to the intractability of some couples.

'If one party is being unreasonable, then their ex-partner may be forced to settle on unfair terms simply to avoid court,' said Leyshon. '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.'

Since 2009 journalists have been able to attend most family law hearings with some Family Court judges opting to sit in completely open court unless there is a specific need to protect the identity of a minor or vulnerable adult.

For those couples wishing to avoid publicity, the choice between a mediated settlement or a trial is complicated by conflicting and inconsistent views among the judiciary.

A recent ruling by Mr Justice Mostyn explicitly criticised the approach of Mr Justice Holman. Holman J takes the view that reporting restrictions should only be granted in a limited number of cases.

In a separate judgment published yesterday and relating to press reporting of the ancillary relief proceedings between Nicole Appleton and Liam Gallagher, Mostyn J remarked: 'To say that the law about the ability of the press to report ancillary relief proceedings which they are allowed to observe is a mess would be a serious understatement.'

'At the moment, the rules around privacy are pot luck,' observed Leyshon. 'There is no generally accepted principle of what may be reported, and what may not when a privacy application is made.'

She continued: '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.'

John van der Luit-Drummond is deputy editor for Solicitors Journal john.vanderluit@solicitorsjournal.co.uk | @JvdLD