Spear’s and private client law specialists Speechly Bircham LLP held a seminar on 15 October where some of Speechly’s top lawyers discussed the tricky and constantly-evolving issues of privacy, reputation and wealth management.
The event, which was attended by over 100 private client advisers from some of London’s best asset management firms, was unusual because it melded the tax and privacy sides into a coherent and (we must add) entertaining format, that of a dialogue between Charles and Alex, with Catherine and Claire providing the case law. Speechlys specialises in this integrated approach, which is one of the reasons they were named Private Client Law Firm of the Year at the Spear’s Awards in September.
(The picture illustrating this article is one of the mock-up front covers Speechlys produced to illustrate the dilemmas facing the seminar’s protagonist, the fictional footballing millionaire Marco Zambrotta.)
Below are the key points made at the event.
Speakers: Charles Gothard, Partner and Head of International Tax and Wealth Structuring; Alex Carter-Silk, Partner and Head of Privacy and Reputation Management; Catherine Dineen, Solicitor (Private Client); Claire Cartwright-Hignett, Solicitor (Commercial).
> The seminar focused on issues which arise for celebrities and ultra wealthy high profile individuals when protecting their families’ privacy, reputation and wealth and the importance of managing these affairs as a single entity.
> Just because an individual is in the public domain does not automatically mean their private life is in the public domain.
> Certain parts of an individual’s life always remain private, namely finance, health and sexual relationships.
> A celebrity does not always have to end up in conflict with the press to preserve their privacy; it is possible to negotiate with the press in a logical way.
> Managing an individual’s “public face” needs focus and conscious decisions must be made as to how much of their life is put in the public domain.
> Individuals should take a holistic approach to their public persona and properly demarcate their private lives. Those in the public eye should avoid admissions, denial statements and telling lies.
> The courts are particularly reluctant to allow the publication of photographs of individuals’/families’ private lives taken with a long lens camera.
> Children have their own right to privacy which is distinct from that of their parents and waiver of it will only be valid if it is in the child’s best interests.
> Timing is crucial when obtaining an injunction to prevent publication of an offending photograph or article.
> Damages in a privacy case can be very low. Currently, £60,000 is the most that has ever been awarded (in the Max Mosley case).
> Pre-nups are not binding contracts in England but if put in place correctly they have been held by the higher courts to be highly effective as a way of ring-fencing assets and limiting divorce awards to avoid a possible 50/50 split of assets after a long marriage (say 12 years or more). Pre-nups now may well be enforced by the English courts in a wide range of circumstances. We have seen a huge increase in demand for pre-nups from clients and their advisers who recognise that given the rise of divorce awards in the UK many clients would be stupid not to consider having one.
> Use a confidentiality agreement to prevent the terms of a pre-nup (and the financial disclosure given during the pre-nup negotiation) from ever being revealed to anyone but the courts and legal advisers.
> Speechly Bircham are increasingly advising clients to enter into a post-nup to re-endorse their pre-nup following the recent case of MacLeod v MacLeod which confirmed post nups to be a type of “maintenance agreement” and therefore potentially binding.
> The media have been able to access the family courts since April 2009. Couples should therefore consider alternative dispute resolution to keep proceedings out of the courts (and can state in their pre-nup this intention, as well as an intention to make a request to the judge to exclude the media if they do end up in court).
> There is an important distinction between keeping assets private from your spouse and from the tax authorities. Individuals should ensure that they are internationally tax compliant, especially in the context of wealth held offshore in bank accounts and trusts. There is now a greater likelihood than ever before of “getting found out” by tax authorities if tax is evaded. The extent of information held (or being obtained by) tax authorities is enormous (think UBS and LGT débacles and inter-government tax information exchange agreements).
> English divorce judges have power to vary the terms of offshore trusts and court orders can be made to compel offshore trustees to make payments to a spouse on a divorce. If this is of concern then careful thought needs to be given as to how the trust is established and run – the terms and jurisdiction of the trust, its assets, the contents of the letter of wishes and the trustees’ conduct will also be crucial when determining whether or not the trust will be robust in the face of a divorce attack.
> Personal wealth should be handled in the same way as privacy – in a focused and co-ordinated manner. Choosing a lead adviser who has the “big picture” helps to avoid wasting time, money and tax, as well as issues being missed.
> An individual should have a coordinated estate plan for their global personal and trust assets – this may therefore involve having foreign wills, as well as a UK will – the objective being to ensure that their assets pass to the next generation (or are held for their benefit to protect them and the assets) in an orderly and tax efficient way, minimising the risk of family disputes and challenges.
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