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A v M [2021] EWFC 89 – case considering treatment of Private Equity funds, where Judge made clear that parties should not expect anonymization

Posted on 4 February 2022

The husband had worked in private equity for a number of years and the parties were in dispute regarding two funds. The husband argued that his carried interest ("carry") amounted to an earned bonus and so should not be subject to sharing. The wife argued that the carry was a return on the husband's capital investment during the marriage and so should be shared. Mostyn J took the view that the carry was neither exclusively a return on a capital investment nor an earned bonus, but was a hybrid resource, with the characteristics of both. He considered that the marital (and therefore shareable) element of the carry should be calculated linearly over time and reiterated his view that the marital acquest should be calculated until the date of trial (as opposed to the date of separation). He considered that the marital carry in each fund should be shared equally, but rejected an argument that the wife should be entitled to share in carry generated by the husband after the date of trial by virtue of her ongoing contributions to the family. He allocated the co-investments in both funds in a similar way.

In a previous case, BT v CU [2021] EWFC 87, Mostyn J had indicated that, in future, he intended to publish financial remedy judgments without anonymisation. He returned to this theme in A v M, setting out his view that there is no "right" to anonymity in financial remedy judgments. He traced the development of the practice, noting that, children and nullity cases apart, there had been no anonymity in the Probate Divorce and Admiralty Division. The House of Lords in Scott v Scott [1913] AC 417 had held that the Divorce Court had been bound by the general rule of publicity applicable to the High Court and subject to the same exceptions. The practice of anonymising judgments appeared to have arisen from the previous practice that the Registrar was the first instance Judge, with the Registrar always sitting in chambers. That would not of itself explain the adoption of the practice, given a chambers judgment is still publishable. He considered it hard to justify the convention of anonymising judgments in light of the decision in Scott v Scott, which had noted that the Family Courts are not a desert Island.

Barbara Reeves says: There is significant momentum from the senior judiciary and the Government to reduce the number of family cases within the court system, including the establishment of a pilot whereby private law children disputes that do not feature allegations of abuse are diverted away from the court system entirely. Alongside this, as a result of the President of the Family Division's Transparency Review, parties to financial remedy cases are likely to lose the anonymity and confidentiality that they previously enjoyed. It is clear from the decision of Mostyn J that he expects that in future, matrimonial finance cases should be treated in a similar way to civil disputes, as far as publicity is concerned. Whilst it is correct that the Family Court is not a "desert island" within the court system, at the same time, matters litigated over in the Family Court are frequently exceedingly sensitive issues relating to a party's personal life: Although it is important for the public to understand the work of the family courts, in practical terms, the prospect of publication without anonymisation is only likely to increase the appetite of parties to explore alternative dispute resolution solutions, thereby avoiding publication of their personal and financial information.

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