Preserving the Privacy of the Super Wealthy: Tsvetkov v Khayrova
In this blog, Associate Grace Lawrence comments on the recent case of Tsvetkov v Khayrova on which a team at Family Law in Partnership advised, and the circumstances in which details of a couple’s divorce may be more likely to be published by the courts.
Many of the world’s super wealthy favour discretion and shun publicity when it comes to their personal lives. Difficulties arise when high-profile couples divorce in England. When parties litigate the division of their assets in the High Court, there is a risk that details of their financial dispute will be published and canvassed in the press.
In the recent case of Tsvetkov v Khayrova  EWFC 130 on which a team at Family Law in Partnership advised, Mr Justice Peel referred to 4 categories of case where publication is more likely to be permitted by the court:
- Where there has been litigation misconduct;
- Where anonymisation would effectively be impossible because of the prominence of one or both of the parties. Mr Justice Peel gave the example of Paul McCartney’s divorce from Heather Mills;
- Where material disclosed in the financial remedy court proceedings is already in the public domain; and
- Where one or both parties court publicity.
The first category, litigation misconduct, entails a punitive aspect, which is best exemplified by references to recent cases.
In Barclay v Barclay  EWFC 40, Sir Frederick Barclay was ordered to pay Lady Hiroko Barclay sums totalling £100m following their divorce. In the course of the financial remedy court proceedings, Sir Frederick Barclay disobeyed court orders. He failed to produce documents and answer questions and he also sold his luxury yacht and applied the monies raised for his own use. The judge in that case, Mr Justice Cohen, said that Sir Frederick Barclay’s misconduct “should not be allowed to pass completely under the radar”. He therefore revealed certain details of the parties’ financial dispute and Sir Frederick’s misbehaviour in a judgment which was made public.
In Ibtissam Ali Christoforou v Christakis Christoforou  EWHC 43 (Fam), as part of the division of their matrimonial property, the multi-millionaire Husband was ordered to transfer to his Wife a small estate of land in Cyprus upon which stood mature olive trees. The Wife alleged that the Husband cut down the olive trees prior to the transfer of land. The Husband denied this. Following the admission of drone footage showing the olive trees in situ prior to the transfer and expert evidence from a chartered arboriculturist (and legal fees incurred by the Wife in excess of £500,000 on the tree issue), the Court found that the Husband was indeed responsible. As a result of the Husband’s dishonesty and his deliberate attempts to mislead the Court, the Court permitted publication of the judgment on the issue of liability for the removal of the trees.
The only way that the super wealthy can guarantee their privacy is by resolving their case outside of the court process. Arbitration, which is effectively a private court hearing, is an increasingly popular option. The parties pay a legally qualified arbitrator to act as their “Judge” and the arbitrator makes a decision which is binding upon them in effectively the same way as a court order.
Arbitration is to the court what BUPA is to the NHS. Crucially, both the process and the outcome of arbitration are confidential, and arranging a hearing before a family arbitrator and receiving their decision tends to be far quicker and easier than struggling through the overburdened family court system.
Grace Lawrence is an Associate at Family Law in Partnership. She advises HNW and UHNW individuals on all aspects of private family law including financial and children matters, and pre and post nuptial agreements. Her work has a strong international dimension and many of her cases involve substantial business interests and trust structures. Grace has been ranked consistently as a “Rising Star” by the Legal 500. To contact Grace, visit her website page below.