Thursday, 20 December 2012

The Divorce App: A good idea or inAPPropriate?

Is mobile technology bringing people together or driving them apart?

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There is no doubt that technology strongly influences the way we live our lives and finding love is no exception. Ten years ago, if you said you met your other half online, you may have raised a few eyebrows.  Today, online dating is not only socially acceptable but a multi-million pound industry with companies such as eHarmony and competing for the best relationship and marriage statistics.  The internet, followed by the explosion in mobile technology, has made it easier to meet people than ever before.  And that is not the only area of our lives that has benefited from the mobile revolution.  You can now go shopping from your mobile to find the perfect first date outfit or search to find the most romantic restaurants and how to get there.  When it comes to finding love we now have access to all the information we could possibly need simply by reaching inside our pockets.

What about the end of a relationship? Can technology help to make a break up that much easier?  Should it?  The government has recently launched an app called “Sorting out Separation” to help people who are facing a divorce or the breakdown in a relationship. This may seem long overdue in the age of having an app for everything but it has come under criticism from those who are concerned that making divorce too easy could devalue marriage.

The app itself offers some basic advice on how to avoid conflict and provides a database of useful resources which the separating person might find useful with an emphasis on protecting children.  It covers everything from counseling to child maintenance and everything in between.  Many of the topics covered would often be raised in a first meeting with a solicitor.  Previous generations in a similar situation would have picked up the phone having no option but to consult a solicitor for clear guidance.  The next generation will have grown up in a world of WiFi, smart phones and super fast internet speeds with a universe of apps putting vast amounts of information at their fingertips.  Combine this with the upcoming cuts in legal aid and it is difficult to imagine that this app will not be well used by those trying to navigate the many legal and emotional issues they are suddenly faced with when a relationship ends.

But does making the process of divorce easier devalue the institution of marriage?  The app is not providing anything dramatically new, just presenting information that is already on the internet it in a new accessible format. What do you think?

Vote in the poll!

Tuesday, 18 December 2012

UPDATE: Gay Marriage – Government Announces Changes

The Government has this week announced its plans in relation to gay marriage, which is to become legal for most religious organisations should they decide to opt into the legislation. I considered some of the issues that gay marriage raised for practitioners shortly after the government’s consultation on this subject ended in June 2012. The culture secretary Maria Miller, who announced the plans on Tuesday, detailed what she described as a “quadruple lock” to allow same sex couples to marry but also to protect those institutions and individuals that do not want to participate in performing same sex marriages from the threat of litigation on the grounds of discrimination. The legislation is designed to recognise equality whilst protecting religious freedoms. The biggest objections to the announcement have come from those institutions that are to be explicitly excluded, the Church of England and the Church of Wales, where it will remain illegal for same sex couples to marry. They are claiming that Ms Miller’s announcement was a surprise as they were not consulted on their exclusion and there may be discussion of an amendment. After the summer debates in which the Church of England claimed gay marriage was “the greatest threat to the Church of England in 500 years” it is be difficult to comprehend them now campaigning to be included in the opt in legislation. Perhaps their real objections lie in the fact that they were not given the final word in how they are treated in the legislation or that they are being singled out in a very public way as being opposed to this progressive, and for many much welcomed, change to the law.

Wednesday, 21 November 2012

Non-Disclosure in Financial Remedy Proceedings. Show me your teeth!

Is the Family Court doing enough to discourage non-disclosure and are the penalties sufficient for those who blatantly flout the rules?

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If you have not heard about the case of Petrodel Resources Ltd& Ors v Prest & Ors then you must have been living under a family law rock!  It is not often that such a case causes such a divide within the judiciary and touches on everything from the fundamentals of company law to division of assets on divorce. I’d better give a (very) brief summary of the facts for the benefit of those under-rock-dwellers before I go any further:

The husband, Mr Prest, was appealing the decision of Mostyn J who had ordered that various UK properties owned by a company, of which the husband had complete control and was the sole shareholder, be transferred to the wife as part of the divorce settlement. The Court of Appeal upheld the husband’s appeal 2 to 1 with Thorpe LJ dissenting on the grounds that the company, and not the husband, owned the properties and so they could not be considered part of the matrimonial pot. The full Court of Appeal judgement can be viewed here.

There is very little parity between the reasoning of Thorpe LJ and Rimer LJ, with each Lord Justice sticking to their judicial guns and coming to completely dichotic conclusions.  So who is right?  Well, that is a question that the Supreme Court will no doubt consider and family lawyers will be waiting with cautious anticipation for the answer.

One item that was not in dispute between the judges was the lack of financial disclosure provided by the husband.  This was summarised by Mostyn J at first instance:

I have sought to make sense of the husband's factual case. Ultimately I have decided that this has been a vain task because the husband has failed so comprehensively to comply with his obligation to provide full and frank disclosure...”(para 12)

Whilst this lack of financial disclosure allowed for adverse inferences to be drawn, it did not provide a route to the impropriety necessary to pierce the corporate veil and get to the assets which were tied up in the company.  This left the family judges (Mostyn J at first instance and Thorpe LJ in the Court of Appeal) reaching for a way to implement a fair outcome whilst arguably stretching their powers under s.24 (1) of the MCA 1973 while the commercial lawyers applied the less flexible company law to the scenario.  There has been plenty of discussion about the impact this decision may have on the way in which family law is practiced and I do not intend to add further to that particular debate at the moment.  I want to consider what the Family Court can do to encourage full and frank financial disclosure and penalise those who willfully disregard that obligation.

The duty to provide full and frank disclosure is an inherent part of UK family law and is set out in the pre-action protocol annexed to Practice Direction 9A – Application for a Financial Remedy of the FPR 2010.  If a party fails to provide such disclosure, particularly if they have been specifically ordered to do so by the Court, then in addition to adverse inferences being drawn, that party could also face imprisonment, a fine, a costs order against them, inability to proceed with their application (Hadkinson Orders) or they might even face criminal consequences under the Fraud Act 2006.  These are serious penalties which family solicitors are obliged to inform their clients of at the outset of proceedings. But are they enough of a deterrent for people like Mr Prest who viewed the proceedings asa game in which he has sought to manipulate the process to his advantage” (see Thorpe LJ's judgement para 28).

Committal Proceedings are generally considered a last resort and there can be a great deal of disregard for court orders before the family court deploys those particular teeth, after all you are talking about taking away someone's liberty. But the Family Court has not shied away from using the threat of such a penalty in extreme cases.  Recent instances include property tycoon Scot Young who was ordered to explain the vanishing of his vast fortune (which occurred suspiciously at around the same time that his wife asked for a divorce) or face a prison sentence. The recently reported Winter v Winter also involved committal proceedings for willful breach of a Court Order to bring funds into this jurisdiction. In that case, Mrs Justice Baron said of the husband’s approach to the proceedings “the time has come to put an end to his disrespectful approach to a court of law. Courts are not toothless bodies. They make orders in order to regulate positions between human being so that society may work in a proper fashion.”

But is this enough to discourage those who see the family court as something to play with while tormenting their former spouse or should the family judges be quicker to show their teeth when they are faced with someone who obviously has no interest in playing by the rules.

What is your experience of the Family Court with non-disclosure and/or failure to comply with Court orders? Don't forget to vote in the poll on the right!

Tuesday, 6 November 2012

UPDATE: Presumption of Shared Parenting

The Department for Education has announced that it intends to introduce a presumption of shared parenting into section 1 of the Children Act 1989.  The move has been expected following a consultation earlier this year and the proposed wording has now been released along with explanatory notes.  I initially wrote about the consultation in July 2012 and again in September 2012 as a guest contributor for Chambers Women in Law.  The Children’s Minister, Edward Timpson MP, in writing to the Chair of the Justice Select Committee said that “over half of the respondents [to the consultation] supported the Government's view that a presumption is the right approach.” He also maintained that “[t]he structure and wording of the clause leave no room for legal interpretation other than that the welfare of the child overrides all other considerations. The amendment, while popular with father’s rights groups such as Families Need Fathers, has been described by the Law Society as “seriously flawed”.
As part of the July post on this blog a POLL was taken on this subject, you can view the results here.

Friday, 26 October 2012

Bankruptcy! Can the Family Court handle it?

Family Law has a tendency to spread its tentacles into other practice areas and bankruptcy is no exception, not least because financial difficulties are often cited as a contributing factor to the breakdown of the relationship but also because the sudden need to support two households can cause cash flow problems.

When a relationship breaks down there can be a lot of mistrust and resentment between the spouses and so it is no wonder that, in the context of financial remedy proceedings, an application for bankruptcy can be viewed as a spiteful attempt to ensure that the money goes to anyone except the ex.  Further suspicion could be aroused when the bankruptcy petition is made by the bankrupt themselves and the creditors are also members of the bankrupt’s family.  This was the scenario in Arif v Zar where the wife, unsurprisingly, made an application for the husband’s bankruptcy petition to be annulled on the grounds that his debts were shams and that he was not balance sheet insolvent as he claimed.  The Family Court cannot look at assets that are not owned by the spouse when making a financial remedy order, so if her application failed then, unless she could demonstrate a significant surplus of assets over liabilities, her claim for a financial remedy would be severely prejudiced.

The recent judgement of the Court of Appeal in Arif v Zar did not look at the details of the husband’s financial position, nor did it consider the merits of the wife’s application for the bankruptcy order to be annulled.  In fact, it only dealt with the limited procedural question of whether Mostyn J had acted within his jurisdiction when he transfered the annulment hearing to the Family Division as he had done at a case management hearing in the family proceedings. The original bankruptcy registrar, Registrar Derrett, had considered the issue of the annulment to be one which required swift resolution and so had timetabled a summary hearing in the Chancery Division.  Mostyn J had considered that it was more appropriate for the matter to be dealt with in the Family Division together with the financial remedy hearing (avoiding multiplicity of hearings) and so had transferred the proceedings under CPR 3.1(7).  In the family proceedings the husband (and the wife of course) would have been subject to a higher level of disclosure and could have been subjected to cross examination which would not have been the case at the summary hearing because Registrar Derrett had not ordered it.  The Court of Appeal held Mostyn J did not have the powers to make such a decision as there had been no material change of circumstances since Registrar Derrett’s decision and any appeal would have to be made in the appropriate court.

So was Mostyn J a little too keen to take this matter out of the hands of the Chancery Division, and in doing so overstepped his judicial limits?  Or was Registrar Derrett reluctant to let a matter involving the Insolvency Act 1986 go to the Family Division.  After all, the circumstances where the Insolvency Act 1986 and the Matrimonial Causes Act 1973 clash are not uncommon and judicial confusion as to where best to resolve such issues is to be avoided. It is perhaps no wonder then that the Court of Appeal took this opportunity to give some useful guidance as to how bankruptcy registrars should deal with annulment applications that arise in conjunction with matrimonial proceedings.  In his judgement, Lord Justice Patten said (at paragraph 21):
  • Registrars should be “alive to the real possibility that a spouse may attempt to use the protection of a bankruptcy order as a shield” in financial remedy proceedings; and 
  • Where there is credible evidence of such an attempt then Registrars should not be afraid to use their powers to:
    • order full disclosure;
    • order witness attendance and cross examination; and
    • consider whether a transfer of proceedings to the Family Division would be the most appropriate way to determine the issues and save costs.
In conclusion, he said that the court will have to “balance the need to secure justice for the spouse against the need to ensure that all issues in the bankruptcy proceedings are resolved at a minimum cost to the creditors”.  So the Family Division can look at matters involving the Insolvency Act 1986 but the discretion to transfer lies with the registrar in bankruptcy or the Chancery Division judge.  If there is any dispute as to how that discretion was exercised then an appeal should be lodged against the decision before proceedings could be transferred. Something that family practitioners, and judges, should be aware of when dealing with such cases.