“Letting sunlight into the Family Court”: Gallagher and transparency in financial remedy proceedings

Financial remedy practitioners will be aware of the recent and ongoing developments that have been taking place on the transparency front. In recent financial remedy proceedings decisions, Mostyn J has challenged the assumption that judgments in financial remedy cases should be routinely anonymised.

Stephanie Coker examines a further Mostyn J decision, namely Gallagher v Gallagher (No.1) (Reporting Restrictions) [2022] EWFC 52.

Background

The substantive judgment is reported as Gallagher v Gallagher (No.2) (Financial Remedies) [2022] EWFC 53. Within those proceedings, the Husband applied for a reporting restriction order (hereinafter “RRO”), alternatively an anonymity order. The Husband sought anonymisation of the parties throughout the proceedings, and prohibition of reporting of any part of the proceedings which would identify the children, the parties, the children’s school, the property where the children were residing or the companies in which the Husband was a director.

The Husband relied on five grounds in support of the RRO he sought. The first ground was that Article 8 ECHR which deals with the right to private and family life was engaged by disclosure of information obtained under compulsion in financial remedy proceedings. Second, a significant proportion of the final hearing focused on the valuation of a construction business in which he was a joint and equal shareholder. It was argued that dissemination of this information:

“could sour existing relationships and enable his competitors, all of whom bid and compete for the same work, to obtain a significant advantage.”

Third, reporting of the construction business information would affect the commercial interests of third parties including his business partner. Fourth, aspects of the Husband’s evidence and his approach to prospective liability arising from an Irish lawsuit against him could be exploited and prejudice his position in those proceedings. It was also argued that nature of the allegations was such that the Husband could be exposed to potential criminal sanctions, including imprisonment. Finally, the Husband argued that most of the evidence filed by the parties was done with a reasonable expectation that their anonymity would be preserved.

Decision

In considering the Husband’s application, Mostyn J elucidated those principles governing the openness of financial remedy proceedings not falling within s.12 of the Administration of Justice Act 1960, which are heard in private under FPR 27.10 but which the press and legal bloggers are able to attend under FPR 27.11. Mostyn J explained that the correct interpretation of FPR 27.10 and its reference to financial remedy hearings being heard in “private” was to do no more than provide partial privacy at the hearing. The rule does not impose secrecy as to the facts of the case. In essence, “private” means open court.

The judge challenged the assumption that family proceedings should remain secret because this is how proceedings have always been conducted. In response, he stated:

“The resistance to letting sunlight into the Family Court seems to be an almost ineradicable adherence to what I would describe as desert island syndrome, where the rules about open justice operating in the rest of the legal universe just do not apply because “we have always done it this way”. In my judgment the mantra “we have always done it this way” cannot act to create a mantle of inviolable secrecy over financial remedy proceedings which the law, as properly understood, does not otherwise recognise. I do acknowledge, however, that the tenacity of desert island syndrome is astonishing.”

The above suggests that arguments that “we have always done this” are unlikely to succeed (certainly before Mostyn J). Rather specific facts are likely to succeed and will be required when carrying out the Re S balancing exercise. The judgment does not go into detail about what the Re S balancing exercise entails, and such a discussion is beyond the scope of this article. For the present purposes, it is sufficient to note that the case of Re S outlines what should be considered by a judge where there is a dispute over what should and should not be published.

According to Mostyn J, a RRO amounted to a derogation from the principle of open justice, and therefore may only be permitted in circumstances where a focused Re S balancing exercise of the various rights protected by Articles 6, 8 and 10 leads to the conclusion that the privacy right should overreach the principle of open justice. In this case, a RRO was justified and ordered to prevent the naming of the minor children, publication of photographs of them or identification of their schools or where they lived. A RRO was also made to prevent reporting of material which could expose the Husband to serious jeopardy or unfairness. This included advice regarding the degree of risk the Husband faces from action by HMRC against him, and an opinion from a lawyer regarding his prospects of success in defending other litigation.

Other arguments advanced by Husband’s counsel in support of a RRO included that “to allow more sunlight into the Family Court will allow some litigants effectively to blackmail the other party into settling the case at an unjustly high price in order to avoid a public hearing and the unwelcome exposure of skeletons in cupboards, and that this possible practice, of itself, would be a good reason to ordain anonymity generally”. Mostyn J firmly disagreed with this argument and expressed that “the constitutional principle of open justice obviously cannot be put aside by anecdotal gossip about the motives of some litigants who have settled their cases”. A comparison was made with the civil courts including TOLATA proceedings which are heard in open court and yet the courts are not empty. Mostyn J also disagreed that anonymity would provide enough transparency if the media were able to report the facts of the case. Mostyn J also concluded that indirect identification of minor children of the litigating adults, and distress to the parties were not good reasons to ordain anonymity generally.

Reflections

Overall, this is significant change, and there are mixed responses to this. Mostyn J’s approach appears to be that anonymity will not be a general rule to litigants in financial remedy cases wherein their judgments are published. If anonymity is sought litigants will have to make an application on notice and provide specific facts and not generalities as to why there should be anonymity. An expectation by litigants that their case will be anonymised is unlikely to succeed. However, fear not as interim RROs can be made pending full analysis.

Stephanie Coker, barrister for 5 St Andrew’s Hill Chambers.