Happy almost Spring-Time! For today’s topic, I will discuss how to have a Confidential Divorce.

In this regard, it is important that you know that, when one’s matrimonial matter goes to Court, the Court materials including Pleadings, Affidavits and – most importantly – the parties’ Financial Statements and Financial Documents will be in the Court file, and will be available to any members of the public for viewing.

Let’s return to Harry and Sally’s situation. Between them, they possess considerable financial assets, and also debts. Also, they have a complicated financial picture.

There are many processes available to Harry and Sally to negotiate their Separation Agreement and Divorce. It is of utmost importance to each that their financial records remain confidential. There are several processes that offer such Confidentiality. They include the following:

1. Mediation, and
2. Mediation/Arbitration (also called Med/Arb).

We will assume that Harry and Sally have retained lawyers. Harry and Sally have heard from friends about these processes and are interested in utilizing them. They speak to their lawyers and their lawyers are on side. In fact, Judges at the Courts also actively encourage Mediation to be held, outside of the Court – even to happen alongside of the Court process – to try to settle all or some of the issues in the Court matter.

Harry and Sally decide with their lawyers to try a Mediation/Arbitration Process. This is a 2-stage process where the parties engage in private Mediation with their lawyers present, with a Mediator who – as the issues are financial and legal – is a lawyer. If Harry and Sally cannot resolve their issues in the Mediation, then the Mediation process will end and will be replaced by an Arbitration Hearing.

In this, the Mediator will take off her Mediator hat and put on a new hat: her Arbitration hat. The Arbitration will proceed as a Hearing – much like a Court Hearing, with witnesses and in accordance with the Rules of Evidence just like in a Court Process. At the end of the Hearing, the Arbitrator will make the Decisions, and these Decisions will be binding on Harry and Sally just as Court Orders would be.

It is important to note that, in both these processes – Mediation and Med/Arb – Financial Information and Documentation in detail must be produced, in order to have a binding Agreement between Harry and Sally, and not have to look over their shoulders in the future. Harry and Sally must lay all of their financial assets and documents on the Table. Full Financial Disclosure is a fundamental prerequisite to have a lasting and binding Settlement, as Harry and Sally each need to have all the financial information about the other on the table in order to be able to make informed decisions (see my blog on “Financial Disclosure”).

In Mediation, and in Mediation/Arbitration, Harry’s and Sally’s Financial Information will remain Confidential to the parties, their lawyers, and the Mediator.

It has been found that the “threat” of an Arbitration Process – where third parties not Harry and Sally shall make the decisions regarding their lives, often has the effect of the parties settling in the Mediation stage!

Where parties divorcing have high net worths and financial information that they do not want to be available to the public, Confidentiality considerations are especially important.

The one caveat in a Mediation/Arbitration Process is that – if Harry or Sally wishes to appeal the Decision of the Arbitration –the appeal must go before the Court. Once at Court, all the parties’ financial records will be available to the public.

In a Mediation only Process, the Confidentiality will remain.

For further information on these processes, see my blogs as follows:

“The Three Hats that the Mediator Must Wear in the Mediation/Arbitration Process” – October, 2023

“Mediation/Arbitration: Can this hybrid process provide Solutions for Sally and Harry in their Divorce?” – March, 2023

“Did you know that you can do one-stop shopping in your divorce?” – May, 2022

My practice focus, as a lawyer and mediator with over 35 years experience and expertise, is on acting as a Mediator in a Mediation Process, or as a Mediator/Arbitrator in a Mediation/Arbitration Process. If you are interested in discussing the possibility of retaining my services in either of these processes, feel free to contact me at anne@annefreed.com.

Until next time!

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This post was originally on Anne Freed’s Blog on February 27 2024