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Family Law

The leading authority on all aspects of family law

30 JUL 2010

Sandra Davis on the Implications of <i>Imerman</i>

A right to privacy or a cheat's charter?

Sandra DavisIn 177 carefully crafted paragraphs the Court of Appeal yesterday rewrote the rules of engagement in matrimonial finance cases.

The Court of Appeal's analysis in Imerman of the development of the law of confidentiality, and its application across all Divisions, including the Family Division, is unimpeachable. 

Self-help is no longer much, if any, help. Indeed it hasn't been (so we are told at paragraph 117 of the judgment) since 1267. Rather the privacy of an individual, even of a degenerate non-discloser, is paramount.

And yet the Master of the Rolls, Lord Justice Moses and Lord Justice Munby were, they said, "very much alive" to the fact that many determined spouses "are dishonestly hiding their assets with a view to avoiding their responsibilities". 

What then are the consequences for the spouses of (potential) non-disclosers?    

Rather than being able to root around the family home or office for documents that tend to demonstrate their spouse's true financial position, the economically weaker party now has only three weapons in their armoury. 

First, if it can be proved that full and frank disclosure has not been given, they can seek adverse inferences from the Court and (presumably) an enhanced award from the assets that have been identified (paragraph 123). But how will anyone now know whether disclosure has been full and frank when the self help documents that prove the opposite can no longer be safely scrutinised by the lawyers or forensic accountants? 

The second option it seems is to have faith in a system that is "sophisticated in detecting and dealing with dishonest disclosure" and which ensures that "assets are now daily uncovered in the family courts despite the most ingenious efforts of their owners to cover them up" (paragraph 124). Leaving to one side that this will see many more families having to litigate to fully contested final hearings, the fundamental difficulty (which is acknowledged two paragraphs later in the judgment) is that the receiving party will often have no personal knowledge of the existence of assets that have been salted away in the first place. 

Regardless of how sophisticated the courts may be, in the absence of a paper trail leading to the pot of gold, how will it be possible for judges to make findings that assets have been hidden? Without those findings, forget about tracing assets and enforcing the resulting court orders.

Finally there is seize, freeze (and hopefully squeeze).  

The financial cost of applying for and carrying out orders to search and seize is significant; even satisfying the evidential burden necessary to obtain such an order in the first place will generally require the prior engagement of investigators and forensic accountants. The emotional cost for families will be horrendous.   

Picture the scene. The suspected non-discloser answers a knock on the door of the family home to a process server who has arrived to serve a divorce petition and an Anton Piller order. Enter stage left a battery of lawyers and IT experts armed with raid boxes. Exit stage right any last vestiges of civility.

It's all well and good that such orders are frequently made in the Queen's Bench and Chancery Divisions but whilst the law applicable across the Divisions is the same, the reality is that the parties involved are fundamentally different. The breakdown of a marriage (particularly where there are children involved) gives rise to radically different issues to those that arise in a commercial dispute between corporate entities or unrelated private individuals.  

In the rare event a spouse has the evidence and financial resources necessary to obtain an Anton Piller, will they actually want to take the nuclear option? This isn't the murky world of corporate espionage, this is people's lives.

White and later Miller; McFarlane saw the pendulum swing in favour of wives. Imerman is an equally important decision. The upper hand has now been given to liars and cheats. The best that can be said about it is that it is a non-discriminatory decision. Husbands and wives now both have carte blanche to conceal their assets.   

Sandra Davis is a Partner and Head of Family at Mishcon de Reya. She is a member of the firm's management board, a Fellow of the International Academy of Matrimonial Lawyers, the author of International Child Abduction (Sweet & Maxwell, 1993) and a member of the Lord Chancellor's Child Abduction Panel. In 2009 she was shortlisted in the Citywealth Magic Circle Awards as a Leading Lawyer.

The views expressed by contributing authors are not necessarily those of Family Law or Jordan Publishing and should not be considered as legal advice.

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