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Privacy in Financial Remedies Proceedings

David Bedingfield, barrister, 4 Paper Buildings, considers conflicting judicial attitudes to the vexed question of rights to privacy in financial remedies proceedings.

David Bedingfield, barrister, 4 Paper Buildings

David Bedingfield
, barrister, 4 Paper Buildings 

The vexed question of just what a journalist who attends a financial remedies hearing can actually tell his or her readers continues to cause difficulties in the Family Division.  The case is held "in private" under r 27.10 of the Family Proceeding Rules 2010, but since 27 April 2009 any  journalist might attend that hearing pursuant to r. 27.11 of those same Rules. Mr. Justice Mostyn has now made clear his position: the default rule is that the reporter is prohibited from identifying  ". . . by name or location any person other than the advocates or solicitors instructing them," and cannot refer to any of the parties' financial information, ". . . whether of a personal or business nature, including, but not limited to, that contained in their voluntary disclosure, answers to questionnaire. . . , in their witness statements, in their oral evidenced or referred to in submission made on their behalf. . . save to the extent that any such information is already in the public domain." See DL v SL [2015] EWHC 2621, Fam (decided 27.72015). See also Appleton and Gallagher v News Group Newspapers Ltd and The Press Association [2015] EWHC 2689 (Fam), (decided 22.9.2015).  In other words, a reporter may attend, he or she may say a bit about the procedure and how matters were decided, but that reporter may not actually report what goes on at the hearing.1 

Mostyn J's decisions are at odds with the practice of Holman J, who has now held that in fact the default position is that every financial remedies case appearing before him should be heard in open court, with reporters able to report on anything said, unless an application is made to limit that reporting. See Luckwell v Limata  [2014] EWHC 502, Fam; see also Fields v Fields [2015] EWHC 1670, Fam. In Fields, Holman J pointed out that financial remedies appeals are heard in open court. Why should the situation be different at the trial level?

Mostyn J's and Holman J's judgments make interesting reading, not just because they seek to answer a difficult and pressing legal question that will have great practical consequences to litigants and the media in the United Kingdom. The judgments also show how High Court and Court of Appeal judges are increasingly asked to make policy decision by "balancing" conflicting rights under the European Convention for the Protection of Human Rights. These balancing exercises, including determining whether a decision by a state actor (or, in some cases, the state itself) is "proportionate", or "necessary in a democratic society", result in an increasingly constitutionalised (and some would say, Americanised) legal order.

This is inevitable, I would argue, and there is no alternative. Courts are here to decide disputes. The ECHR is in fact a constitutional fetter on state action. In the appropriate case—and the question whether and to what extent legal proceedings can be reported is just such a case—a court is required to wrestle with notions such as "expectations of privacy", and "respect for family life". It means commentators assessing those judgments need not be legally trained. After all, everyone has an opinion about "privacy". It means, inevitably, an increasingly politicised judiciary. That is the price, I contend, of a rights-based constitutional order.

Mostyn J in his two judgments set out what he believed to be compelling justifications for maintaining what has been the status quo regarding the reporting by the national media of divorce cases since 1926, and the enactment of the Judicial Proceedings (Regulation of Reports) Act 1926: divorce is a "private business", (see para 11 of his judgment in DL v SL), and is therefore protected by the anonymity principle. Mostyn J gives the following legal justifications for that rule:2

a) Parliament has in FPR 27.10 specifically provided that these proceedings should be held in private;

b) The process of a financial remedies hearing involves the extraction of "highly personal and private information under compulsion" which the recipient may not use save for the purposes of the proceedings;

c) Article 14 of the 1966 International Covenant on Civil and Political Rights (ratified by the UK in 1976) stipulates that the press can be excluded from all or part of the trial when the interest of the private lives of the parties so requires, and provides that judgment need not be in public in cases involving matrimonial disputes;

d) The Judicial Proceedings (Regulation of Reports) Act 1926 covers financial remedies proceedings and remains good law.

Mostyn J in his judgment in DL v SL sought to reconcile Rule 27.10 and 27.11 like this:

"The reform which resulted in FPR 27.11 being made was the result of a campaign to enable the world to see how public law care proceedings were conducted. It was not designed to enable the essential privacy of ancillary relief proceedings to be cast aside. Reporting how a case is conducted, and what legal points are raised, in an  abstract way is one thing; laying bare the intimate details of the parties' private lives is altogether another." (See para 14.)

Mostyn J noted  Lord Rodger's view, set out in  Re Guardian News and Media Ltd [2010] 2 AC 697, at para 63,  that failing to give the names of those involved in  a trial (in that case, a criminal trial) would likely mean the newspapers would give less coverage to that trial. It would be less "newsworthy" if no names were given. Therefore simply a judgment or trial report that is "anonymised" will not in most cases provide the detail that a newspaper or media outlet requires.  Mostyn J dealt with that argument in this way:

"That is all true, but in my opinion the question of whether a party's private affairs should be laid bare in the national press should not depend on whether the report of the case is thereby more newsworthy and therefore likely to gain a higher circulation for the publisher."   (See para 14.)3

Mostyn J in DL v SL also engaged in the balancing test that the European Convention  requires when rights claimed under the Convention would seem to be in conflict. Here, the right of the public to know and understand what is happening in courts funded by taxpayers is (at least theoretically) in conflict with litigants who want the proceedings to remain private.  Mostyn J notes that the principle of open justice has deep roots (Se paragraph 5.) He cites Lord Bingham's view that ". . . at the heart of the concept of the rule of law is the principle that laws should be publicly made and publicly administered in the courts." (See Bingham, The Rule of Law (Allen Lane, 2010), page 8.)

Mostyn J also cites Jeremy Bentham's aphorism that "publicity is the very soul of justice." Bentham believed (in 1843) that one of the benefits of having trials in public is that the witnesses would more likely tell the truth if they understood that "a thousand eyes" would have seen them lie. Mostyn J also cites The US Supreme Court Justice Louis Brandeis's famous Harpers Weekly article of 1913: "Sunshine is said to be one of the best disinfectants."

Mostyn J concludes that therefore the two principal reasons for publicity are to secure the probity of the judge, and to enhance the veracity of witnesses. A subsidiary, but not principal, reason, according to Mostyn J, would be to promote understanding and debate about the legal process, but he notes that this could equally be achieved by education. He notes that the principle of open justice is not absolute. Adoption proceedings, of course, are held in private. No one contends that merely because they are in private these proceedings are "robbed of justice." (See paragraph 8.)

Mostyn J notes that other courts now regularly recognise a "privacy" right for adults. He points to the US case of Griswold v Connecticut 281 US 479 (1965), where the Supreme Court found a "privacy right" in the penumbras of several enumerated rights in the US Constitution. That right made it unlawful for the state of Connecticut to outlaw the provision of birth control information by a doctor to a patient. This reasoning was later used by Justice Blackmun and a Supreme Court majority to outlaw blanket bans of abortions. See Roe v Wade [1973] 410 US 113, S Ct. 

Mostyn J sets out in particular in Appleton and Gallagher his view that there is an implied undertaking by litigants in financial remedies proceedings not to use documents or information supplied by compulsion save for purposes connected with the litigation. He queries whether the press are also bound by that undertaking of privacy. 

Mostyn J contends that the appropriate approach is that the press cannot report what they see and hear in financial remedies proceedings unless they are able to justify why the "core privacy maintained and endorsed by Parliament should be breached." See paragraph 16. There are two situations where the balancing exercise, according to Mostyn J, will lead to a judgment being fully public. One is where a party has lost the benefit of the privacy right because there has been "proof of iniquity," as Mostyn J put it. See Lykiardopulo v Lykiardopulo [2010] EWCA Civ 1315, [2011] 1 FLR 1427. The other is where there is so much information in the public domain that privacy has already been lost.  See Blunkett v Quinn [2004 EWHC 3826, [2005] 1 FLR 648.

Mostyn J relies heavily on the Court of Appeal's judgment of Clibbery v Allan [2002] EWCA Civ 45, [2002] 1 FLR 565, CA, where Thorpe LJ stated at para 90 that ". . .it was never doubted that publication of such private proceedings was prohibited."  The primary basis of support for the prohibition, Thorpe LJ noted, was not the 1926 Act, but the specific demands of litigants engaged in financial remedies proceedings. In Mostyn J's view, this tips the balance heavily in favour of privacy.

But does Mostyn J understate, in his balancing test, the importance of "newsworthy" conflict in the courts? And does he overvalue the right to privacy?

As a first matter, it is not always correct that both litigants in financial remedies applications want the proceedings kept out of the newspapers. Almost invariably, one of the parties is either neutral, or in fact wants the matters reported. Not always, but most often, that party seeking publicity is the one claiming to be wronged by the richer party. The wife, in other words, often  does not  care if her husband's various nefarious business enterprises are made public. It is almost invariably the rich and famous who are the subject of press interest; those they harm in the main would welcome press scrutiny. If a party understood that his finances (dubious or otherwise) are about to be laid bare, it is more likely that party would seek to settle on favourable terms. Mostyn J ignores that.

And of course it is right that financial remedies proceedings involve the extraction of highly personal and private information under compulsion. Similarly, a case involving a wealthy businessman who walked in front of a number 3 bus and was injured also requires the extraction of highly personal and private information under compulsion. It is right, as Mostyn J notes in Appleton and Gallagher, that litigants in civil proceedings do not have to produce the amount and detail required in some (but not all) financial remedies proceedings. But libel claims, civil fraud claims, and even bog-standard personal injuries all require production of basic financial information. (How does one claim lost income without showing what income was lost?) Should we decide that rich and famous people run over by the number 3 bus might bring a claim for damages, but should be allowed to bar the press from the proceedings (or require an anonymised judgment) because they are rich and famous and therefore "newsworthy"?

It is right, too, that Article 14 of the 1966 Covenant provides that signees to the Convention might still exclude members of the press from attending a trial or reporting the outcome when ". . . the private lives of the parties so require." But the Convention merely states that a decision to do so does not breach that Convention. It does not require a signee country to impose such a rule. The question therefore remains to be answered: Is it appropriate to have as a starting point a rule that prohibits full publication of financial remedies proceedings? Is such a rule compliant with Article 10 and with the concept of open justice? Does such a rule give too much importance to the embarrassment that might be felt by the rich and famous and too little import to the concept of transparency?

Mostyn J points to the reasoning of Mrs. Justice Roberts in the case of Jamie Anne Cooper-Hohn v Christoper Anthony Hohn [2014] EWHC 2314 to buttress his conclusion that Article 6 is a justification for keeping in place a "rule of confidentiality". Litigants in financial remedies proceedings would be loath to produce confidential business or personal documents if they knew that the next day that information would be on the breakfast tables of  the nation, goes the reasoning. Roberts J, in a case involving a very wealthy hedge fund manager and his wife, who was managing another fund that provided a great deal of money for charitable causes, sought to balance the principles of Article 6 and Article 10 of the ECHR. In her view, the Article 6 rights of the litigants would be imperilled if the rule of confidentiality were abandoned in financial remedies proceedings. Roberts J was concerned that the information would be available for public consumption " . . .  without any judicial filter."  The husband's evidence, in her view, ". . .  might well touch on several areas of highly confidential and commercially sensitive information, which might well be damaging not only to his own business affairs but to the commercial interests of other third parties who have not, and will not have, the opportunity to make representations to secure protection for those interests." See para 170 of Roberts J's judgment in Hohn.

But how would that information be damaging?  Is the information true, but not something that the husband would want published? Why would he not want it published if it were true? Would it reveal something that in fact should be revealed? Is the market being fooled by the high value of the fund? If that is the case, surely it would not be in the public's interest to permit the husband to continue to operate his business in a way inconsistent with what is in fact true.

And again, if those who are run over by the number 3 bus have to reveal private information, why should the owner of a hedge fund who is being divorced escape that duty?

And why should the husband who appeared in DL v SL before Mostyn J escape public censure? This is a man who, as Mostyn J noted, has in the course of the litigation made a number of ugly threats to the wife and her solicitors. After one pre trial review, he ". . . hurled abuse at the wife's counsel and solicitor, saying that they were fucking cunts." (See para 18.) Is this a gentleman whose identity should be shielded? Is that really in the public interest?

Mostyn J and Roberts J both contend that the 1926 Act remains good law.4  The history of the Act has been extensively reviewed by Munby P in the case of Rapisarda v Colladon [2014] EWFC 1406. That case involved the question of whether the press should be entitled to report on a matter brought by the Queen's Proctor to dismiss a large number of divorce petitions that had been fraudulently brought. Munby P noted that the 1926 Act had not been enacted primarily to protect privacy interests of litigants, but instead was enacted to protect public morals. Apparently, the repeated reports of salacious details in divorce cases was causing a breakdown in public morality, at least according to King George V. The sovereign's private secretary in March of 125, after the tabloids' blanket coverage of  the particular nasty case of Dennistoun v Dennistoun (1925) 69 Sol Jo 476, wrote to the Lord Chancellor and set out in detail the King's feelings of "disgust and shame at the daily published discreditable and nauseating evidence." What became the 1926 Act was introduced as a private member's bill, and eventually received government support. The Act sets limits on what may be reported in "divorce proceedings." (Ancillary relief had not yet by 1926 become a settled jurisdiction.)5 

But as Munby P points out, the Act gives to trial judges a discretion simply to ignore the Act altogether. See section 1(4) of the 1926 Act. And that is what Munby P did in Rapisarda. He held that he had a discretion under the Act to provide by order that any evidence given at trial could be reported.  Munby P did not hold unequivocally that the 1926 Act applied to financial remedies proceedings because that in fact was not the case before him. Mostyn J, and Roberts J, both have now held that the Act continues to apply, despite its somewhat antiquated view about what is or is not in the public's interest.

The difficulty here is this: should courts restrict publication of true facts? No one doubts that there are cases where a court should do this. The obvious case is where the interests of minors are involved. But should there be a default position that rich and famous people who are divorced should not face press scrutiny? 

The best way to approach the question is to query why it is newspapers believe something is "newsworthy." Newspapers are driven by stories involving conflict and distress. If you have a camera set up outside a red light, and that camera reveals hour after hour of cars safely passing the intersection, you have no story. But if a drunk driver runs the light and ploughs into a row of school children, well, you've got a story.

And divorce, particularly divorce among the rich and famous, produces conflict and stories. Some of those stories are embarrassing. Some reveal fraud. Some reveal good people being harmed by bad deeds. Is ALL of this off limits? Is there not a compelling public interest in revealing true facts about those with power in our society? 

It is instructive, perhaps, to consider how U.S. courts dealt with the right to privacy. The genesis of the "right to be left alone" is a law review article published by the Harvard Law Review in 1891. Louis Brandeis (the same Louis Brandeis cited by Mostyn J in DL v SL)  was then a lawyer in a Boston law firm. He and his law partner, Samuel Warren, were angry after tabloid journalists had taken pictures and written stories about the wedding of Warren's daughter. What they both sought was the creation of a tort that would permit the subjects of "embarrassing" but true stories to sue newspapers or other media outlets for publishing those stories. The Boston lawyers put it like this:

"To satisfy a prurient taste, the details of sexual relations are spread broadcast in the columns of the daily papers. . . When personal gossip attains the dignity of print, and crowds the space available for matters of real interest to the community, what wonder that the ignorant and thoughtless mistake its relative importance. Easy of comprehension. . . no one can be surprised that it usurps the place of interest in brains capable of other things."6

Several state courts in the US sought to create the tort, and sought to balance the "privacy interests" of plaintiffs with the First Amendment rights of the newspapers. The Courts began to carve out an exception to the tort that swallowed up the rule: If the story was "newsworthy," the action failed. An example is the famous case of Sidis v F.R. Publishing Company, (2nd Cir 1941) 113 F2nd 806, cert den (1941) 311 US 711. The case, decided by the 2nd Circuit Court of Appeals in New York, is seen as the death knell of these types of cases. The offending publication was the New Yorker. The writer was James Thurber. Thurber profiled a man who, 27 years earlier, had been a child prodigy in mathematics. The plaintiff at the time of publication was living in Boston's shabby south side and collecting street car transfers for a living. According to the Court, the article was "merciless in its dissection of intimate details of its object's personal life, and the article was a "ruthless exposure of a once public character who has since sought and has now been deprived of the seclusion of a private life." The 2nd Circuit nevertheless affirmed the dismissal of  the plaintiff's case. Courts should not seek to second guess the decision by editors as to what is or is not newsworthy, according to this reasoning. Plaintiffs claiming to be damaged by the publication of true facts therefore faced an impossible task.7

No doubt both the Court of Appeal and the UK Supreme Court will provide their own analyses of the policy issues at stake. When they do, they will be forced to asses just how much import society should give to hearing embarrassing, but true, facts about those with money and power who use the nation's courts. This is a damnably difficult question. No one doubts that it is unfair and hurtful to reveal a person's  affairs (both financial and sexual) in a public forum simply because his or her marriage breaks down. But stories about conflicts are, it is contended, inherently valuable. They reveal; they instruct; they tell us who are. If we restrict reporting of true facts, we tell ourselves lies.


[1] Given that the reporter is also barred from looking at any documents produced, it is hard to see how much actual reporting could go on in any event. See R 29.12 of the FPR 2010.
[2] Mostyn J has already visited this issue. See W v M (TOLATA Proceedings: Anonymity [2012] EWHC 1679, where he reviewed the legal principles involved and held that actions under the Trusts of Lands Act would be covered by the "anonymity principle."
[3] Private Client Adviser notes concerns amongst practitioners that the lack of privacy in such proceedings can be used as a weapon in settlement negotiations. The article is here.
[4] Mostyn J gets around the difficulty that application of the 1926 Act to financial proceedings held in chambers would mean that publication of matters permitted by the Act should be the default or starting point by holding in Appleton and Gallagher that the 1926 Act only applies if the trial judge decides to hold the hearing in open court. If held in chambers, in private, there is an implied privacy right that the court may enforce.
[5] Munby P sets out in detail the history of the 1926 Act, and the fact that Parliament has applied it to maintenance applications under the Matrimonial Causes Act 1973. The story is told by Professor Stephen Cretney, [2997] CFLQ 43. See also Kate Summerscale, Mrs Robinson's Disgrace: The Private Diary of a Victorian Lady (Bloomsbury 2012) and Robinson v Robinson and Lane (1859) 1 SW and Tr 362; Deborah Coehn, Family Secrets: Living with Shame from the Victorians to the Present Day (Viking 2013).  Mostyn J rightly notes that it would be bizarre for Parliament to apply the 1926 Act to this portion of the MCA 1973 and not mainstream ancillary relief applications. Mostyn J and Munby P also note that Parliament in 2010 enacted the Children, School and Families Act 2010, which, had it been brought into force, would have permitted judges to anonymise any judgments in financial remedies proceedings, and to punish those who without permission revealed information from those proceedings. The Act has never been brought into force. Even if Parliament does enact a similar provision, the question will remain: Is this expectation of privacy regarding true facts that are discovered by the press in financial proceedings consistent with Article 10 and the concept of open justice?`
[6] See Brandeis and Warren, "The Right to Privacy" (1890-1891) 4 Harvard Law Rev 193, 195.
[7] Note here in particular Mostyn J's view that "newsworthiness" is not a concept that should hold much weight in the balancing exercise. The 2nd circuit also explicitly held that "famous" people—even those who have not sought that fame—have less expectation of privacy than others. One reason is that they would have more access to the media, to correct any incorrect stories about them, than would less famous people.