Financial relief disclosure: a miscellany of meanings

‘Self-help’ documents: when in law does the duty arise?

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In ‘Just help yourself: self-help and disclosure in family proceedings’ in the Resolution Review Byron James describes the financial relief disclosure law, as he sees it, after Imerman v Tchenguiz and ors [2010] EWCA Civ 908, [2011] Fam 116, [2010] 2 FLR 814 as ‘still playing out’. He stresses that what he calls ‘the first proper post-Imerman guidance to professionals is in L v K (Freezing Orders: Principles and Safeguards) [2013] UKHC 1735 (Fam), [2014] Fam 35 (also called UL v BK) by Mostyn J. He concludes that ‘practitioners ought to adhere’ to what Mostyn J says (‘a decision from a puisne judge’); ‘or else ignore it at their peril’.

 

I am afraid I cannot agree. I dealt with this subject some time ago. ‘Illegality’ (as Mostyn J calls it) of a self-help party must be judged against the date or time at which the common law says disclosure takes place, a date which is not clear in civil proceedings. Thus if a party (like Mrs Livesey (Livesey (formerly Jenkins) v Jenkins [1985] AC 424, [1985] FLR 813 or Mr Sharland (Sharland v Sharland [2015] UKSC 60, [2015] 2 FLR 1367)) has not disclosed material information where their case is settled, their non-disclosure may lead to an order or agreement between parties to be set aside. It may be fraud (as in Sharland). And, of course, on disclosure, L v K was not a ‘decision’. In issue was a freezing order for the wife and her lack of frankness in obtaining information about the husband. The Imerman comments of Mostyn J were not part of that decision.

 

Disclosure at common law

 

The common law gives no clear guidance as to when a duty of disclosure formally arises (save in ancillary relief cases as in Imerman (below)). Until the logically prior question – when does disclosure arise? – is answered, it is not possible to say whether a document has been ‘obtained illegally’ as, for example, explained by the Bar Council’s ‘Evidence obtained illegally in civil and family proceedings’ (last reviewed May 2016).

 

In Imerman the Court of Appeal said categorically: when Mrs Imerman received documents from Mr Imerman’s computer she was not entitled to them:

 

[140]   … The rules required him only to give full disclosure under Form E. Only thereafter might he be ordered to disclose further documents should the court think it necessary. Accordingly, since the rules specifically exclude any such obligation, it is not possible, it is simply unacceptable, to countenance Mrs Imerman taking the law into her own hands so as to obtain a premature advantage.

 

Well yes, this may be the rule in ancillary relief proceedings, where there are proceedings (ie someone has filed Form A). But what happens where parties are negotiating a settlement? Proceedings, if a case is to be settled, will not be in prospect.

 

Duty of disclosure: but when, according to the law?…

 

Imerman is a judgment of the highest authority (Lord Neuberger MR, Munby and Elias LJJ). But the ‘law’ on disclosure is not clear. At what stage does a duty of disclosure arise at common law?

 

  • Despite what Imerman says, there is a duty of disclosure when parties are engaged in settlement negotiations (or mediation), if an agreement is reached and a consent order is submitted to the court? Suppose then a party (A) finds information (like brother A below) which shows facts on which a settlement was made may be false (like Mrs Sharland). Must they be ignored by A’s solicitor and a fraud be permitted because the solicitor may not (per L v K [56](3), set out below) look at the documents? That is not the law, as I shall explain.

 

  • Imerman: the duty to disclose, which subsisted during settlement negotiations, is suspended between settlement attempts until after the process of inquiry is carried out after the first directions appointment. At least, this seems to be the logic of the position in Imerman.

 

  • And what of B’s private documents which should have been disclosed prior to the order (consent or contested)? These may be the stuff of a set aside application. This is precisely the material of which Lifely was made; but on L v K principles they should have been ignored, or at least not read and advised upon by A’s lawyers.

 

In both (1) and (3) above – perhaps even in (2) – where a lawyer who refuses to read documents tempts a negligence claim (as explained in conclusion). This stark assertion arises if application – based on any of those documents – should have been made to set aside the agreement (in (1)) and the order (in (3)).

 

Lifely and documents ‘to be disclosed’

 

To understand the status and admissibility of unlawfully obtained documents, it is necessary first to go to Lifely v Lifely [2008] EWCA Civ 904 (also Court of Appeal, considered in passing in Imerman at [176]). Lifely concerned two sons (A and B) of a farmer who, during his lifetime, had agreed distribution of milk quota shares. After the father’s death they failed to agree what they had agreed with their father, and went to the Chancery Division for an answer. The chancery judge agreed with B. A year later A found a diary (a personal diary: how private is that?) belonging to B. In it he found notes by B which recorded what he, A, had originally said to the judge was agreed. He showed the diary to his solicitors, who advised him to appeal.

 

The court gave him permission out of time and permitted the diary to be produced (Ladd v Marshall [1954] 1 WLR 1489). The appeal was allowed, the earlier order was set aside and the case remitted for rehearing with the diary in evidence before the court below. But if Imerman ‘principles’ (as defined by Mostyn J) had been followed, the brother’s diary could not have been read by Burges Salmon (A’s solicitors) and an appeal could not have got off the ground. Justice would have been denied.

 

In Vernon v Bosley (No 2) [1999] QB 18 the defendant’s leading counsel (A) received form an undisclosed source, and read, confidential documents (medical reports: highly private) about Mr Vernon (B). These disclosed information which, said the Court of Appeal, should have been disclosed. It was relevant evidence which had become available between the High Court hearing and the appeal hearing. This is the common law, said Stuart Smith LJ. The principle is now confirmed by Civil Procedure Rules 1998 r 31.11.

 

In these cases the documents were private. They belonged to someone who had not authorised their being read. They were obtained and read unlawfully (in this sense) and in breach of B’s rights under European Convention 1950 Art 8. At [32] Ward LJ said in Lifely: ‘I am prepared to accept… that there is at least a good arguable claim for misuse of private information which is protected by Article 8 of the ECHR [ie all A’s in the above examples were in the wrong]. However, the matter does not end there’. Ward LJ explained how he conducted the Art 6 – Art 8 balancing exercise required of judges to decide issues of this type. He concluded, as he must if Art 6 rights are engaged, that these trump Art 8 (paras [33] to [39]).

 

Imerman principles’: date of duty of disclosure

 

In L v K Mostyn J set out what he called ‘Imerman principles’. These are his deductions from the case, not what is stated the Imerman case itself. These ‘principles’ are obiter. They are made without reference to such cases as Lifely and Vernon. And as cases like those confirm, a fair trial requires that the court has access to all relevant material, which mostly means documents (such as diaries and further relevant information about a party). Therefore parties to a case must tell each other what documents or other information they have (such as Mrs Livesey’s plans to remarry).

 

The full text of what Mostyn J says on this subject (at [56] of L v K) is in Byron James’s article at Review p 23. The main aspects of it are:

 

‘(1) … It is simply and categorically unlawful for [A] to breach her husband’s privacy by furtively copying his documents whether they exist in hard copy or electronically….’.

‘(3) If [A] supplies such documents to her solicitor then the solicitor must not read them but must immediately seek to obtain all of them from the wife and must return them, and all copies (both hard and soft), to [B’s] (if he has one). [B’s] solicitor, who owes a high duty to the court, will read them and disclose those of them that are both admissible and relevant to the wife’s claim, pursuant to [B’s] duty of full and frank disclosure.

‘(4) If [B] does not have a solicitor [A’s] solicitor must retain the documents, unread, and in sealed files, and must approach the court for directions.

 

So when does a duty of disclosure arise? This is the question which is central to all of this. Plainly before there is any final agreement – if a case settles – a duty to disclose arises. If parties settle before they issue proceedings there is a duty to disclose (as Mrs Livesey should have done) before any settlement. There will not be an Imerman Form E moment because there will not ever be a Form E if a case is settled.

 

In Imerman/L v K terms there is a pause between mediation and other attempts to settle. On this analysis a discovery no-man’s land develops. It continues – a strange silence between the party trenches – until such time as questionnaires are exchanged. This is not, I suspect, what the common law intends (though I accept that is what the Court of Appeal say in Arbili v Arbili [2015] EWCA Civ 542 and in Imerman).

 

Once the duty of disclosure has arisen then I doubt there will be many lawyers who would say that a client who – like brother A in Lifely – finds a private document or other material which should have been disclosed must give it back unread. In the case of (1) and (3) above – unlike Byron James – I would not follow L v K at all; and in a case where that Imerman period applies (between Form A and Forms E questionnaires) I would say L v K provides only obiter guidance.

 

I am sure my insurers would want me to look at the documents. My insurers will say that it can be assumed that, as a practising solicitor, I know – or I am deemed to know – what legal professional privilege and confidentiality are, even including a Cox v Railton document (ie excluded from privilege because covered by the ‘iniquity exemption’; which might apply here if fraud is involved; R v Cox and Railton (1884) 14 QBD 153); and that if privilege applies (as the Bar Council’s guidance says) then I must reflect as to whether I can continue to act.

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