It will often be the case that a family who has experienced the suspicious death, injury or other abuse of a child may be not only the subject of criminal proceedings, but also subject to the involvement of the local authority and often the commencement of care proceedings. It is recognised by both the family and criminal justice systems that the children involved and their families need consistent treatment. There is therefore a detailed and comprehensive Crown Prosecution Service protocol dealing with the disclosure of information from family law proceedings involving children in related criminal proceedings. (https://www.judiciary.gov.uk/wp-content/uploads/JCO/Documents/FJC/Publications/RelatedFamCrimPro.pdf).
The position with regards to financial remedy proceedings is different, and the protocol does not apply. This article aims to provide a brief overview of how the courts deal with the issue of cross-disclosure in financial remedy proceedings and maps the development of the case law in this area.
Financial remedy proceedings: The legal definition
Rule 29.12 (1) of the Family Procedure Rules 2010 provides that:
“Except as provided by this rule or by any other rule or Practice Direction, no document filed or lodged in the court office shall be open to inspection by any person without the permission of the court, and no copy of any such document shall be taken by, or issued to, any person without such permission.”
However, Rule 4.1(3)(b) states that the court may “make such Order for disclosure or inspection, including specific disclosure of documents, as it thinks fit”.
So whilst the starting point is that documents filed within financial remedy proceeds are confidential and cannot be disclosed to any third party, the court can override this provision if it sees fit and make an order for specific disclosure.
In considering whether to make an order for disclosure, the court has to weigh up competing interests, namely confidentiality versus public interest. Evidence in financial remedy proceedings is protected by a cloak of privilege and the parties’ duty of confidentiality. Only if this confidentiality is overridden by the public interest will the court make an order for disclosure. The fact that documents are useful or relevant is not a good enough reason in itself.
Notable cases involving financial remedy proceedings
There are several significant High Court decisions dealing with this issue, all which involve disclosure to HMRC.
In S v S (Inland Revenue: Tax Evasion) [1997] 2 FLR 774, the judge held within the confidential financial remedy proceedings that the husband had been guilty of tax evasion. The wife’s brother disclosed a copy of the judgment to HMRC who then applied for permission to retain it. The judge refused the application. He stressed the importance of spouses in financial remedy cases making full and frank disclosure of their assets and stated that this was likely to be undermined and discouraged if there was an overarching threat of intervention by HMRC. He established that the court has discretion as to whether to permit disclosure, and it will be very rare for that discretion to be exercised in favour of disclosure. As the husband had not admitted the tax evasion, the public interest in securing full and frank disclosure within the matrimonial financial proceedings was more important than the punishment of tax evasion.
A similar approach was followed in R v R (Disclosure to Revenue) [1998] 1 FLR 922. In the case, the tax fraud was admitted and the judge ordered that HMRC could retain the documents.
In A v A; B v B [2000] 1 FLR 701; [2000] 1 FCR 577 Fam Div, Charles J considered whether the court should, of its own motion, send papers to HMRC showing that two husbands had evaded tax. He weighed up the competing interests evenly and did not make the order for disclosure on the basis that the husbands would make disclosure to HMRC of certain matters relating to tax evasion themselves.
Matters were clarified further in the case of HMRC v Charman [2012] EWHC 1448 (Fam). Coleridge J had made an award to the wife of over £40 million. One of the issues in the case was the extent of the husband’s tax liabilities. HMRC were seeking over £11 million in respect of unpaid tax from the husband, which was disputed by him. HMRC wanted to rely on transcripts of hearings in the financial remedy proceedings and various other documents. The husband refused to disclose these documents and HMRC issued an application for disclosure. Both HMRC and the husband relied on public interest arguments in support of their respective positions.
Coleridge J summarised that as a general rule, evidence in financial remedy proceedings is not disclosable to third parties save in exceptional and rare cases, for very good reason. He held that in this case there were no rare or exceptional circumstances and the confidentiality attached to the documents should not be overridden. The fact that there was no suggestion that the husband was guilty of tax evasion or criminal behaviour was relevant.
It is not just in cases involving HMRC that this issue can arise. The writer has recently come across a case where the family court allowed disclosure of orders, transcripts and judgments to the CPS in circumstances where the husband was on trial for domestic violence offences in the Crown Court and the wife had been found to be dishonest in her evidence in the family court. The judge held that on balance, the husband’s right to a fair trial overrode the wife’s right to confidentiality.
In conclusion, this is an interesting point of law and one where the court must carefully weigh up competing interests. It is clear from the judgment in HMRC v Charman that disclosure will only be allowed in rare and exceptional cases and there will always need to be a compelling reason.
