The End of 'Self-Help' Disclosure?
This article explores some of the problems that can arise from 'self-help' disclosure in the context of divorce proceedings; it asks the question: are the days of self-help disclosure at an end? Importantly, it demonstrates the need to consult family lawyers like Southampton Row Solicitors before taking any action.
This article begins by explaining the concept of the disclosure of financial information, before then using a recent ruling by the Court of Appeal to highlight why self-help disclosure is a route fraught with legal problems and pitfalls.
Reaching a financial settlement that both sides can agree on is one of the most challenging aspects of a divorce. Before a court can take any action, negotiations have to first be attempted between the two parties which will require each party having sufficient knowledge to enable them to make an informed decision. This is achieved by full and frank disclosure on the part of both parties as to their financial circumstances. Usually a satisfactory agreement is reached; however, if these negotiations are unsuccessful then the court is required to step in and adjudicate over the issue. As part of the court procedure the court will require full and frank disclosure by both parties in order to make this process as fair as possible..
Usually, proceedings will run smoothly from this point onwards. However, occasionally one side will feel that the other is not being truthful regarding their financial situation. What then happens if this is the case?
It is not uncommon in this situation for one party to produce documents that they believe demonstrate their spouse has not disclosed the full details of their finances such as their bank accounts or assets. These may be obtained via what is known as the 'self-help' route; in other words, the individual has obtained documentation such as bank statements belonging to the other party without the direction of a court order.
Following the recent case in the Court of Appeal concerning the former owner or Del Monte Foods, Vivian Imerman, and his wife, Lisa Tchenguiz Imerman, the legality of this process of self-help disclosure has been severely challenged.
Mr Imerman, who was born in South Africa, sold a major stake in tinned fruit giant Del Monte in 1999 for an estimated £380 million. After his wife had filed for divorce in 2008, Mr Imerman's brothers-in-law, with whom he shared an office, downloaded numerous confidential documents belonging to the husband from his computer without his knowledge. Their aim was to discover the true nature of the husband's financial situation in order to ensure that their sister received a fair share.
Prior to this case it was accepted practice for a spouse to secretly copy, retain and use confidential documents, as long as they were obtained without force; a practice which has been defended legally using what has become known as the 'Hildebrand rules'.
Crucially, the ruling by the Court of Appeal, in the case of Imerman, has determined that the Hildebrand rules have 'no basis in law'. This decision meant that the documents that were taken from Mr Imerman's computer had to be either returned to him or destroyed. Ms Tchenguiz was also required to pay over £1 million in costs, and ordered to not make use of any information that may have been gained from reading the documents.
It is worth noting at this point, however, that the situation is slightly different if one party leaves copies of documents lying around a shared space (for example at home in a place such as the kitchen table), and these are found by the other party; this can even include one party finding documents in a rubbish bin!
In terms of the Hildebrand rules, this ruling demonstrates that they cannot be used as a defence for conduct which was criminal (in this case a breach of Mr Imerman's rights by his brothers-in-law). The case of Hildebrand v Hildebrand can therefore only be used as an authority as to the time at which (during court proceedings) unlawfully, or clandestinely, obtained documents, or copies of documents, must be disclosed to a spouse.
One of the problems with self-help disclosure, highlighted by the Imerman case, is that self-help disclosure is likely to be indefensible should it occur at a point at which it is unclear whether a party would be honest about their financial situation when required to be. For example, in this case the information was taken from Mr Imerman's computer before he had a chance to disclose his financial situation in court.
The upshot of the Imerman ruling is that self-help disclosure can no longer be defended in court. It illustrates that proper legal advice must be sought from the relevant experts before any action is taken in this regard.
It is also worth stressing that aside from the legal pitfalls, self-help disclosure is fraught with other problems; it is for example likely to encourage a vindictive response by the other party, increase costs, and make the chances of settlement far less likely.
The Imerman case highlights the difficult balance courts have to strike between protecting an individual's right to confidentiality, and ensuring that there is a fair and just resolution of financial issues in divorce proceedings.
For any further information on this and other family law matters, please contact our litigation department at Southampton Row Solicitors.
