Pasternak & Fidis Reporter

October 1, 2014

Passage of Maryland Collaborative Law Act Offers Privacy Protections to Divorcing Couples

In May Governor Martin O’Malley signed the Maryland Uniform Collaborative Law Act, which passed both houses of the Maryland Legislature without objection. Effective October 1, 2014, this law allows divorcing couples to craft their own agreement to protect their confidential information during the Collaborative Process. In contrast, if the parties seek a court resolution, it can be an uphill battle to protect financial information from public access.

The Collaborative Process is a voluntary process that bypasses the court system to reach dispute resolution. The parties commit to working for settlement only, without threatening court action. A collaboratively trained attorney assists each party throughout the process. In contrast to the court system, the parties and attorneys meet together to find solutions that work for both parties and their family. As needed, the group brings in other professionals to meet with them, in particular, financial experts and mental health experts to help with financial and parenting issues.

Begun in 1990 as a newcomer to the array of Alternative Dispute Resolution processes, the Collaborative Process is now practiced throughout the United States, England, France, Germany, Canada and twelve other countries. Attorneys in Maryland began using the process in the mid 2000s. Approximately 400 Maryland lawyers have now been trained to handle Collaborative cases.

Maryland is the ninth state to enact the Uniform Collaborative Law Act. The District of Columbia passed the Act in 2012. Virginia has yet to consider it.

Although Maryland attorneys have been working with clients in the Collaborative Law Process since the mid 2000s, the new law is an important development. Most important is the privilege for collaborative communications. If either party abandons the Collaborative Process and goes to court, the law protects statements made in the Collaborative Process from being admitted as evidence in court or obtained in court-based discovery. Thus, similar to the statutory protections for communications in mediation, the statutory protection of communications in the Collaborative Process allows the parties to speak freely in the spirit of settlement without fear of being penalized in court.

In another important change, the new law requires voluntary disclosure of all important information for settlement, without use of any of the mandated court procedures for discovery. Usually a financial expert collects information from the parties and meets with them and their attorneys to assist in reaching resolution of the financial issues. In contrast to litigation, in the Collaborative Process the attorney for each party is responsible for his or her client’s compliance with this disclosure.

The Collaborative Process ends successfully when the parties reach a settlement agreement. Prior to reaching settlement, each party has the right to end the process and go to court or seek another way to resolve the dispute. If the case ends unsuccessfully, the Collaborative attorney, who is hired for settlement only, does not continue to represent the party in court. Statistics collected nationwide by the International Academy of Collaborative Professionals indicate a 90 percent success rate. Even parties who were not successful reported by 80 percent that they were glad they participated in the process.

To date the Collaborative Process has been used primarily in divorce and family law cases, although it is also well suited to many civil law disputes such as business disputes, employment discrimination claims, and probate or estate matters. Across the board, the Collaborative Process appeals to clients who want privacy about their finances and personal matters and who want to control the pacing and time demands of resolving their dispute. Among divorcing clients, the Collaborative Process particularly appeals to spouses who want an amicable divorce; spouses who want to integrate financial planning into their divorce; spouses who want to be better informed about their finances; spouses who want to maintain a respectful relationship with each other and the other’s extended family; couples who have had a lengthy marriage; and clients who want specialized tax, business, trust and other expert advice as part of their divorce.

In a divorce or family law situation, there are two groups that are particularly well-served by the process: 1) high net worth individuals and business owners who seek a private resolution and a process they can control; and 2) parents who seek a process that protects their children. The first group, who have important financial interests at stake, can protect their financial information from disclosure to others outside the process. At the same time, if one party is less financially sophisticated, the neutral financial expert hired by the parties can help educate that person about the family finances. The parties can also control the timing of the process by deciding when they will meet and how fast they will proceed. When they reach resolution in the process, their finances will be protected from public access.

The second group, parents of minor children, are able to set protecting their children as their goal for the Collaborative Process. Instead of the attorneys’ negotiating a custody schedule, mental health experts trained as coaches meet with the parties to develop a schedule and decision-making plan that protects the children. Participants interviewed after the Collaborative Process reported the greatest benefits to be their improved ability to co-parent and the protection of their children during the divorce process.

At Pasternak & Fidis, all the family law attorneys are trained in the process. Please call Jan White, Vicki Viramontes-LaFree, Linda Ravdin, Morriah Horani or Mary Katherine Hayburn if you would like to find out if the Collaborative Process is a good choice for you.

Jan White is a founding member of Collaborative Practice Training Institute and has trained Maryland attorneys in the Collaborative Process for the Administrative Office of the Maryland Courts. She has served as head of the District of Columbia Academy of Collaborative Professionals and the Collaborative Professionals of Northern Virginia, as well as on the Board of the Montgomery County, Maryland Collaborative group, Collaborative Dispute Resolution Professionals. She is currently Chair of the D.C. Metro Protocols Committee and Co-Chair of the Ethics Committee of the Maryland Collaborative Practice Council.