When Might an Arbitration Not Be Entirely Private and Confidential?

It is beyond argument that one of the great virtues of family law arbitration is its ability to provide the parties with confidentiality and privacy for the resolution of their dispute. Unlike court proceedings, the parties will not face the risk of the hearing taking place in open court with curious members of the public present, or in private but with the media potentially in attendance (even if constrained in what they may report).

The website of the Institute of Family Law Arbitrators (IFLA) has within its FAQs the question ‘What are the benefits of family arbitration?’ and the second bullet point in the answer is ‘Confidentiality: The entire process is protected by strict confidentiality under the Rules of both Schemes.’ In the context of financial arbitration, that is clearly a reference to Article 16.1 of IFLA’s Family Law Arbitration Scheme Arbitration Rules, which states:

‘The general principle is that the arbitration and its outcome are confidential, except insofar as disclosure may be necessary to challenge, implement, enforce or vary an award (see Art.13.3(c)), in relation to applications to the court or as may be compelled by law).’

The general focus of most people who advocate the benefits of family law arbitration is on the first 12 words of the above rule. While most of the remainder of Article 16.1 is also readily understood, given that it is obvious that any application to the court for an order to reflect the arbitrator’s award or to enforce an award will require reference to the award itself, the words ‘or as may be compelled by law’ have to date attracted little attention.

In Rt Hon The Countess Karen Anne Spencer v Rt Hon Ninth Earl Spencer, Charles Edward Maurice Spencer [2025] EWFC 431 Peel J had to consider how the court should deal with an application by a party to disclose parts of an award for use outside the proceedings the arbitration was directly concerned with.

Earl Spencer and Countess Spencer agreed that the financial remedies application arising from their divorce would be decided by family arbitration. One of the issues in the financial remedies proceedings was the potential liability the wife had to the husband’s partner, Professor Jarman, who had issued proceedings against the wife in the King’s Bench Division (KBD) for alleged misuse by the wife of Professor Jarman’s personal information.

Although the wife had defended Professor Jarman’s claim, the arbitrator made an award which was based on the assumption that the wife would accept a Part 36 offer made by Professor Jarman to settle the KBD proceedings. Although acceptance of the Part 36 offer would constitute a formal admission of liability by the wife, the arbitrator had assumed that the wife would accept the offer without an admission of unlawful conduct, and a Statement In Open Court (‘SIOC’) was likely to be agreed and read out in the KBD to confirm that. To that end, the parties agreed that certain parts of the arbitrator’s award would be disclosed to the wife’s and professor Jarman’s respective media lawyers and to the KBD, and that agreement was recorded as part of the award.

In due course the wife did accept the Part 36 offer. However, the content of the SIOC could not be agreed between the parties’ respective media lawyers and there was an application pending before the KBD to deal with that.

Although most of the arbitrator’s award was converted to a financial consent order, the parts of the order relating to the disclosure of that award were not agreed and came before Peel J in the Family Court. The wife sought orders permitting disclosure of more than had been agreed within the arbitration. This included her being allowed to disclose the full award to her media lawyers and to utilise the contents of the award not only in the KBD proceedings ‘but in any dealings with the media to, as she puts it, “defend her reputation”’ (para 15). The husband resisted that application.

Peel J noted that:

‘It is well established that arbitration proceedings are generally (i) private and (ii) confidential in that there is an obligation, implied by law and arising out of the nature of arbitration, on both parties not to disclose or use for any other purpose any documents prepared for, disclosed or produced in an arbitration; paragraphs 103–106 of Emmott v Michael Wilson & Partners Ltd [2008] Civ 184.’ [16]

He also cited Article 16.1 from the IFLA Financial Scheme Rules (above) but noted that:

‘the general principle is not absolute and is subject to exceptions. It is suggested at paragraph 107 of Emmott that those exceptions include:
 
i⁠) With the express or implied consent of the parties.
 
ii⁠) Where the court has given permission.
 
iii⁠) Where it is reasonably necessary for the protection of an arbitrating party’s legitimate interests.
 
iv⁠) Where the interests of justice (or public interest) require disclosure.’

He reminded himself that:

‘the wife’s article 6 rights (right to a fair trial in the King’s Bench proceedings), article 8 rights (protection of personal reputation) and article 10 rights (freedom of expression) are engaged. So, too are, the husband’s rights, in particular articles 6 and 8 (both of which bear on the confidentiality of the arbitration which was intended to avoid publicity).’ [19]

In balancing those various rights it was important to ensure that the wife could fairly put her case in other proceedings and to ensure that other tribunals were not misled (paras 20–21).

Having performed that balancing exercise, Peel J reached the conclusion that the disclosure of the identified paragraphs of the award which had been permitted by the arbitrator went as far as was necessary or justified to satisfy the wife’s rights. She was, however, permitted to disclose to her media lawyers and to the KBD part of an email from the arbitrator which post-dated the award. She was also permitted to disclose the whole of the award to her media lawyers, albeit only the identified paragraphs could be used by them in the KBD proceedings, to be referred to in open court.

Importantly for those who promote arbitration to high profile clients as an alternative to the court process, Peel J held (at [26]):

‘But to go beyond authorisation of the identified paragraphs, for that specific issue, in my judgment is not justified. It would disproportionately invade the essential confidentiality of the arbitration process to give the wife wide scope to rely on matters contained within the arbitration which were not authorised for disclosure and which are not obviously necessary given the disclosure which has already been provided for … As counsel for the husband submit, to permit expansion of disclosure as sought by the wife would drive a coach and horses through the confidentiality central to the arbitration process.’

As a post-script, it was unfortunate (and more than a little ironic given Earl Spencer’s previous well-publicised experience of media access to the hearing of his earlier divorce and his loss of anonymity as a result of the judgment of Munby J in Spencer v Spencer [2009] EWHC 1529, [2009] 2 FLR 1416) that having taken the wise step of dealing with their financial remedies within the confidential surroundings of an arbitration, the matter has now surfaced into the public domain as a result of the dispute over the disclosure of the award. However, it should be remembered that the parties were named in the published judgment in this case primarily as a result of the fact that there were the proceedings in the KBD brought by Professor Jarman, which were to be heard in open court. As Peel J observed (at [43(ii)]):

‘The judgment is my consideration of the extent of disclosure of material from the family proceedings into the King’s Bench proceedings which are in open court. It would be anomalous to anonymise a judgment which determines disclosure into open court.’

Parties to family law arbitrations can remain confident of the general principle of confidentiality continuing to apply in the vast majority of cases.