Government announces Lasting Power of Attorney “revamp”
As family lawyers we help clients through challenging times when they may struggle to manage the overwhelming emotional impact of divorce. Until recently, they could be entitled to assume that any court proceedings would be heard in private and it would be highly unlikely for them to be reported in the media or for any documents to be available for any third party to inspect.
Sir Andrew McFarlane’s October 2021 report entitled, Confidence and Confidentiality: Transparency in the Family Court`s threatens to turn that assumption on its head in a development that is potentially alarming for anyone contemplating a divorce or likely to be a party to future litigation in the family court.
The thrust of the report can be summarised in one of the concluding paragraphs in which Sir Andrew states that, ‘the time has come for accredited media representatives and legal bloggers to be able, not only to attend and observe Family Court hearings, but also to report publicly on what they see and hear.’ As a team that frequently acts for clients in the public eye, we are preparing carefully for the changes to ensure that our clients are given the greatest possible protection from the media glare.
The general direction of travel since 2009 has been towards greater transparency but there has always been a tension between privacy on the one hand and transparency and accountability of the family justice system on the other.
Sir Andrew summed up the accountability argument in his report commenting that, ‘Justice taking place in private, where the press cannot report what has happened and where public information is very limited is bound to lead to a loss of public confidence and a perception that there is something to hide.’
Accredited members of the press have been able to attend certain family hearings since 2009 and there was a degree of angst in the profession at that point with many clients wishing to settle rather than risk going to trial. One high profile (and widely reported) example was Earl Spencer’s proceedings which settled out of court following the previous president, Mr Justice Munby’s decision to refuse the Earl’s application to have the media excluded from attending the final hearing (Spencer v Spencer  EWHC 1529 (Fam).
This led to many in the profession referring to the ‘Spencer effect’ as people in the public eye scrambled to settle rather than face having their situation pored over in the court of public opinion.
In reality, the accompanying reporting restrictions were so tight that there was often little or nothing that could be reported and the press rather lost interest in attending.
In January 2014, Mr Justice Munby moved to encourage greater transparency with his publication of guidance on the publication of judgments in the Family Courts and the Court of Protection. Despite encouraging more judges to publish anonymised judgments, numbers declined and it was clear that not all of the High Court bench had taken the medicine. In particular, there was a clear divide between those who favoured hearings in open court such as Mr Justice Holman and those seeking to maintain the privacy of parties such as Mr Justice Mostyn. With the latter apparently seeing the ‘transparency light’ in his judgment in BT v CU  EWFC 87, the dominant opinion at the High Court bench is now firmly on the side of transparency.
The current system was based on the Administration of Justice Act 1960 which enshrined the principle that proceedings in the Family Court should be heard in private. Although proceedings relating specifically to children will remain that way, the presumption is reversed so that the starting position is that the media will now be able to report on proceedings subject to the relevant judge’s discretion as to whether any non-parties should be excluded.
Perhaps more alarming is the current plan for members of the press to be given access to the position statements filed by the barristers acting on each side. These documents typically set out the background to the case in great detail before setting out the arguments being deployed on both sides. It is also envisaged that third party attendees would be given access to any witness statements filed in the proceedings.
Subject to a carve out relating to minor children, the working draft standard reporting permission order assumes that accredited members of the press will be able to refer to, quote from or use any of the following:
the names of the parties;
photographs of the parties;
a description of the factual, evidential or legal issues in the proceedings including the open proposals made by the parties;
quotations from, or information derived from, any documents filed in the proceedings (“the filed documents”), including, but not limited to, witness statements, replies to questionnaire, voluntary disclosure and position statements;
quotations from, or summaries of, the oral evidence of witnesses, or of the submissions of the advocates, or the comments of the court; and
quotations from, or summaries of, the judgment and order disposing of the proceedings.
While increased public confidence in the family courts is a worthy and important aim, it remains to be seen how these proposals can be implemented without a raft of unintended consequences. Given the level of detail set to be publishable, it is hard to imagine how the risk of so called ‘jigsaw identification’ could be eliminated. A primary concern has to be the welfare and mental health of children who may risk having their parents’ situation discussed by their friends and peers but there are also wide ranging implications for the parties themselves.
As a team we act for people from all walks of life including business leaders, hedge fund managers and professional sports people. Whether it be the need to maintain the confidence and backing of your investors, your board, your manager or your teammates, details concerning conduct could operate as a distraction and cause irreversible damage to careers and sometimes to the value of corporate entities.
Professional sportspeople are a good example of those who may be adversely affected by the proposed changes. Their careers may burn brightly for a short period before being cut short by injury or a loss of form leaving them with a small window in which to maximise their earnings and commercial impact via endorsements and media appearances. In football, for example, details of conduct might dent a player’s transfer value, limit their commercial appeal before one even considers the likely loss of form and focus on the pitch.
If you are a fund manager with ‘skin in the game’ or a business founder with significant personal wealth invested in their business, lurid personal details being reported in the press might have implications for their FCA registration or dent investor confidence leading others to withdraw their capital.
At a time when the court system is overburdened with a backlog of cases, some consider these changes to be yet another encouragement to those who can afford it to seek alternative routes to using the court system (discussed below).
It is possible that the proposals may act as such a deterrent to litigation and that parties may be more inclined to settle and behave in a more constructive and sensible manner rather than litigating points of principle or seeking to punish the other party for their alleged conduct.
While anything that increases public confidence has to be a net positive, we are looking closely at ways in which we can protect our clients’ privacy. In particular:
Arbitration – First introduced in 2012, this provides for cases to be determined by a specially trained barrister or solicitor as arbitrator. This has the advantage of taking place in private and the parties are bound by the ‘arbitral award’ which is then converted into an order to be approved by the court. From a slow start, this has increased in popularity over the pandemic as a sensible way of resolving cases quickly instead of clients having to wait for up to a year for a final hearing to be listed. The Court of Appeal’s decision in Haley v Haley  EWCA Civ 1369 has also been key to increasing the popularity of this process with clients. The judgment confirmed that an award can be appealed in the same way as a court order. That said, Haley is also problematic from a privacy perspective. While arbitration takes place in private, any appeal would be public so arbitration is not necessarily a silver bullet for those wishing to avoid public scrutiny.
Mediation – While a voluntary, non-binding process, mediation provides a confidential alternative to court proceedings which also offers parties with flexibility to agree a tailored process to suit their situation. It is becoming increasingly sophisticated allowing for the involvement of experts dealing, for example, with valuation evidence or evidence relating to the effect of medical conditions.
Private Financial Dispute Resolution hearings (‘pFDRs’) – These see parties instructing an independent barrister or solicitor to act as judge to provide an indication as to the likely outcome of the case at trial. The process is akin to using private health insurance rather than the NHS in that the parties choose their tribunal and the ‘judge’ is able to devote a whole day to the case rather than parties being sandwiched between a number of other cases in a busy court list. Settlement rates are high and these take place in private avoiding any impact of the proposed changes. Once again, this process requires the consent of both parties and cannot be imposed if one party fails to agree. If agreement is not reached, the parties will be left with the court process or arbitration so the there is no guarantee that public scrutiny can be avoided.
Confidentiality clauses in nuptial agreements – While the size and scope of such clauses has been increasing in recent years, it is not clear what protection they might offer once the transparency changes have been introduced. Typically such clauses seek to restrict what parties can say to third parties and also to limit what can be said on social media platforms such as Facebook or Twitter. Agreements commonly include clauses that commit parties to taking all necessary steps (to include making applications by consent) to ensure that hearings are held in private and that accredited members of the press are excluded. Such clauses are likely to be rendered ineffective by the proposed changes. Perhaps more helpful is the inclusion of clauses in which parties agree how disputes are to be resolved. Clauses committing parties to arbitration are likely to grow in popularity as the only way to avoid public scrutiny.
Stay married – There is a risk that parties (particularly those in the public eye) may choose to remain in unhappy marriages rather than risk being the subject of press attention. Regardless of one’s view as to whether this strengthens or weakens the institution of marriage, there is certainly an argument to suggest that this might adversely affect minor children living with parents constantly at loggerheads.
Increased generosity – The ‘Spencer effect’ may become a reality once the proposals come into force. It is possible that financially stronger parties may now be forced to pay over the odds (rather like an additional ‘privacy premium’) so as to settle their cases long before they reach court. Some may question whether this restricts the ability of well-known individuals to obtain a fair outcome if the cost of adverse publicity is the main driver behind negotiations rather than the correct application of the law to their situation.
The President has been decisive in addressing a perceived decline in public confidence in the Family Courts. His wish to increase public understanding of the system via increased transparency is well-intentioned and may well achieve the desired outcome. Despite that, there are other practical consequences of those changes. It is crucial that we prepare for the changes now to ensure that our clients and their families can continue to resolve disputes in a way that causes the least possible damage to all concerned and in particular to their children. The role of reputation management lawyers has never been more important and we are lucky at KN to be able to call on the expertise of our leading media team.
Will MacFarlane is a partner in Kingsley Napley’s Family & Divorce team and he advises clients on the full range of family law issues arising on the breakdown of relationships. He has a particular interest in resolving complex financial claims often with an international element. He has over 13 years of experience having spent his formative years at Withers in London.
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