How to Succeed in Major Financial Proceedings

Major financial proceedings in family law are defined as matters which involve a contested net asset pool of $20 million or more. The Federal Circuit and Family Court of Australia has launched a Major Complex Financial Proceedings List to more efficiently deal with commercially complex financial family law cases. Without effective case management, family law cases that involve complicated commercial issues can require the additional and sometimes unnecessary allocation of significant court resources in dealing with ongoing interim and protracted disputes. These may include disputes about disclosure or discovery, the management of technical or complex expert evidence and disputes concerning interests in trusts or other corporate structures.

What matters qualify for the Major Complex Financial Proceedings List?

To qualify as a MCFP List Case, a matter must fulfill the following criteria:

  • Involve a contested net asset pool of $20 million or more; and
  • Involve a complex disputed issue such as:
    • serious allegations of non-disclosure;
    • serious disputes in relation to valuations or other expert reports;
    • substantial assets held through a trust/corporate entity or offshore;
    • substantial third-party claims to the asset pool;
    • serious allegations of fraud; or
    • other complex questions of law or novel points of law; and
  • Not involve a parenting dispute, or if it does, the parenting dispute can be considered and determined separately at a discrete hearing, or referred to Dispute Resolution, such as a Parenting Dispute Resolution Conference.

The FCFCO has provided its explanation and guidance relating to the list here.

How to succeed in high stakes family law litigation?

We apply this question to all family law litigation which involves a high net worth individual (HNWI). Wealthy individuals within Australia are generally deemed to be those with net investible assets over $1m (or net of over $2.5m including the family home) and earning more than $250,000 per annum. Having said this, the ATO categorise ‘Wealthy Individuals’ as those who control a net wealth of $5m or more.

There is no doubt that when wealthy individuals divorce, the stakes are higher than usual. We have previously written about how to succeed in family law litigation generally where we provided a number of practical tips. All those suggestions apply to high net worth divorce scenarios, however there are additional strategies that need to be brought to bear in large asset pool cases.

  1. Make use of a multi-disciplinary team of experts. Your family lawyer, despite being competent, experienced and passionate will not be able to conduct forensic financial analysis or in depth financial investigations. You need to bring in some expert assistance. Your family lawyer needs to know what type of consultant or expert will be needed. These types of non-legal experts are force multipliers.
  2. Bring on board the best Counsel (barrister). When you need to win, you need to choose Counsel carefully. Your family lawyer should be able to advise you on which Senior Counsel should be briefed. The designation of a barrister as Senior Counsel is intended to recognise those whose standing and achievements justify an expectation on the part of the public and the judiciary that they will provide outstanding services, as counsel, to the administration of justice. However, not all have appropriate experience in family law and not all command equal respect, your family lawyer will know who to brief.
  3. Pay tremendous attention to interim and interlocutory applications. Major financial proceedings will typically take longer to resolve than most matters, therefore pay great attention to what interim orders you need. Likewise, interlocutory applications and threshold determinations could end up being absolutely critical to the success of your proceeding overall.
  4. Demand personal service and a proactive approach. If your family lawyer is simultaneously directly dealing with or supervising the carriage of a further 10, 20, 30, 40 or perhaps even 100 other family law matters, how much of their bandwidth will be focused on the most important of all those matters, namely your matter? Given the importance of your matter, your family lawyer should be able to devote a great portion of their available time to ensuring your success.
  5. Know who is actually working on your case. Beware of the moment when the junior lawyer assisting your family lawyer suddenly seems to be fully responsible for your matter. We have seen this time and time again, when the pressure gets put on the other side and that pressure persists for some time, there is an easy way for a principal to get home on time, they dump the matter on one of their underlings and from that time on they will “supervise” your case only. You need a family lawyer who will carry your case on their shoulders from beginning to end. Sure, your family lawyer should have junior lawyers and paralegals assisting them, but the key word here is “assisting”.
  6. Guard your privacy and your reputation. Co-ordinate with your accountant, investment advisor, PR rep and cyber-security expert to avoid mishaps. Make sure your tax situation is compliant, you don’t want to give the other side any leverage. Secure your email, social media accounts and all electronic records. Review and manage what your social media activity says about you. Understand how to use s 121 of the Act and the Harman undertaking to protect your privacy.
  7. Take timely action. There is no point in closing the stable door after the horse has bolted. Understand when and how to make use of tools such as Anton Piller (search and seizure) orders, Mareva (asset freezing) orders, injunctions and undertakings.
  8. Position yourself to win the costs battle. You need to know when to make and how to respond to offers of settlement and Calderbank offers so that you do not expose yourself to liability for what will likely be above average legal costs. Conversely, make clever use of the same to position yourself well in relation to your own application for costs against the other side.
  9. Understand different options to achieve the outcome you need. Consider the impact of protracted litigation on you and your family, but also have sufficient trust and faith in your family lawyer and Counsel to respect their advice whether that be to settle, or to go trial if necessary.

Jano Family Law have experience in high net worth family law litigation, including carriage of matters involving major asset pools ($20m or more). In one such matter, the presiding judicial officer described the case as being, “As complex as family law gets.

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