05 August 2010

What do we do now?

It's not uncommon. We've all been there. A client comes in, perhaps at first meeting, before terms of business or any other advice from you. She (as it usually is) hands you some documents. She found them at home. They belong to her husband and show he has a numbered Swiss bank account, a trust fund, an overseas property or business interest etc.  But now the Court of Appeal has left us wondering: what should you do after Imerman?

We are told that a husband enjoys rights of confidence as against his wife. It will therefore be a breach of confidence (not to mention potentially a tort and/or a crime), without the authority of the husband, to examine, or to make, retain, or supply copies to a third party of, a document whose contents are, and were (or ought to have been) appreciated to be, confidential to the husband. Hildebrand is no defence, for the client or you.

So, before looking at the documents and, if possible, before the client tells you the contents, it will be important to establish if they are confidential. This will depend on the facts of each case and the way in which the parties lived and conducted their personal and business affairs. The Court of Appeal says that confidentiality is not dependent upon locks and keys or their electronic equivalents. If a husband leaves his bank statement lying around open in the matrimonial home, in the kitchen, living room or marital bedroom, it may well lose its confidential character as against the wife. If the document was in the husband's own study, it would be less likely that the wife could copy the statement without infringing the husband's confidence, even less likely if the statement was kept in a drawer in his desk and less likely still if kept locked in his desk. However a personal diary or journal may remain confidential even though it was kept visible and unlocked. There are fine lines to be drawn here and much room for argument about whether the parties were in the habit of seeing each other's documents or discussing their bank balances.

If you conclude the documents may be confidential, you would need to advise the wife accordingly. The husband would be entitled to an injunction requiring the delivery up of the material and destruction of copies, and prohibiting the use of the information by the wife and her advisers. The husband may go so far as to make an application to prevent the wife from continuing to instruct her solicitors if they have intimate knowledge of the information. The wife would have to apply to the court for permission to use the information if in due course the husband had not disclosed appropriately in accordance with the rules, and she may need to seek information by way of a production appointment or in extreme cases protect her position with search, seizure and freezing orders at vast cost and disruption. In the majority of cases, such measures are simply not feasible. The husband may only have been concealing a few thousand pounds which would be swallowed up by the additional litigation costs; that could be the difference between housing a family and not. While the Court of Appeal acknowledged that difficulty, they did not offer any solutions.

Also, do not forget in all of this, Ward LJ's analysis of tortious liability in White v Withers - the Court in Imerman favoured his approach so an action for damages cannot be ruled out. If computers are involved this adds yet another layer of complexity and potential liability.

There is a clear tension between your respective duties to do the best for your client and to act lawfully. One can only hope that practitioners will take a sensible and pragmatic (as opposed to a costly and litigious) approach between themselves. After all, as has been pointed out, you cannot remove information from a person's mind, and given the historic approach of the family court, evidence is ultimately more likely to be admitted than not, so the non-discloser takes the risk that one way or another the truth will out - the question is, at what cost?

The Court of Appeal's own conclusion in Imerman points to one possible option for practitioners. Whilst in our scenario you would of course have to send the confidential documents immediately to the husband's solicitors, you might seek an undertaking that your opposite number will retain them and provide disclosure in accordance with the rules and their duty to the court. If such agreement is not forthcoming, a direction from the court might (justifiably, in my view) be sought. This will not change the fact that there has been a breach of confidentiality (and probably a tort) by the wife, but in the face of a fait accompli it may be the best you can do to minimise the risk for both you and the client, and preserve the information.

As ever, it will be vital that practitioners give their clients clear advice at the first opportunity about the potential problems of self-help, and ensure that there is a written record of that advice.

Hayley Trim is a Family Law PSL at Jordan Publishing and was formerly a family solicitor practising in London.

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