If you are in court proceedings dealing with the division of your finances on divorce, you will have heard of an FDR hearing. An FDR (Financial Dispute Resolution) is the second stage hearing within the financial remedy process and comes after an FDA (First Directions Appointment) but before a Final Hearing. It is effectively a day of negotiation at court, assisted by a Judge who will give indications about the potential outcome of a case, all on a “without prejudice” basis, with the aim of facilitating an agreement.
An FDR can usually only take place once both parties have given detailed financial disclosure, and relevant expert evidence has been obtained, such as valuations of properties and businesses, and actuarial reports looking at how pensions can be shared.
Case of GH v GH [2024]
In a recent case, the Judge emphasised the importance of the FDR within the financial remedy process and confirmed that it is hard to envisage a situation where an FDR should not take place. As such, it must be assumed that there will have to be an FDR hearing in almost every case, and exceptions will be very few and far between.
In this case, the Judge originally decided to dispense with the FDR hearing, and move straight to a Final Hearing, because the wife’s position had not crystalised and there was an ongoing factual dispute about her earning capacity, indicating that an FDR negotiation would not be successful.
On an appeal against this decision, it was decided that this was wrong, and that this was not an “exceptional reason” as required by the rules. Regardless of the difficulties in the case, the FDR Judge would still be able to look into the case and give clear and robust views, including about how each party had presented the case and the offers made. It was said that even the most intractable case was capable of settlement as part of this process. The purposes of the FDR was for the parties to hear from the Judge an independent evaluation of the likely outcome, as well as the risks associated with not settling the matter, in respect of costs, uncertainty, delay and emotional stress of continuing to a final hearing. The Judge can also indicate how relevant a particular issue might be to the case, such as one party’s borrowing capacity or ability to earn.
Rather than being a potential waste of time, it was highlighted that it is these most difficult types of cases are those that can benefit most from this input from the Judge, even where a party’s case is not fully crystalised. Indeed to dispense of an FDR would likely be a disservice to the parties.
When might an FDR not be required?
An “exceptional reason” is required for the FDR to be dispensed with. This could be where a party has not engaged with the proceedings at all and has made it clear that they will not attend the FDR hearing.
It is certainly not the case that factual disputes between the parties, a lack of engagement in Non Court Dispute Resolution, or indeed the fact that the parties had not exchanged settlement offers are good enough reason.
Non Court Dispute Resolution (NCDR)
There are a number of difficulties with the family court system. The process can be slow and unreliable. As such, you could be waiting a long time for your FDR hearing to be listed. It can be unclear who the hearing will take place in front of, whether there will be comfortable and appropriate rooms for the parties to wait in at court, and indeed the risk that the hearing could be vacated at the last minute.
In addition, there is now greater emphasis on the need to consider and utilise the various out of court options (previously ADR and now NCDR). These include mediation, arbitration, collaborative law, early neutral evaluation and private FDRs. Not only can it be incredibly beneficial for parties to use these dispute resolution methods for many reasons, the court can now penalise parties for not doing so, either by putting court proceedings on hold or by making costs orders against those who unreasonably refuse. There are of course some exceptions to this, for example, where one party has suffered domestic abuse.
Is it possible to have an FDR out of court?
Yes, Private FDRs are becoming a very popular and successful form of NCDR. These private hearings are essentially the same as you would get at court, however, the parties get to choose and appoint their Judge, choose the date and location of the hearing, which is likely to be a comfortable, neutral venue. The parties can be confident that the Judge will read all of the papers and properly understand their case, leading to helpful indications and the best chance of a settlement. There are many advantages to a PFDR. These hearings can take place at any time, within or outside the court process. It is now common for court proceedings to be put on hold so that a PFDR can take place, in order to avoid delay and uncertainty.
How can Stephens Scown help
The family team at Stephens Scown can help you resolve your financial issues on divorce, and will work with you to find the best route for you given your particular circumstances. We are experts in Non Court Dispute Resolution (NCDR), for example, we can support you through mediation or arbitration, regularly facilitate Private FDRs, and are trained in Collaborative Family Law and Resolution Together (One Couple One Lawyer). However, where court proceedings are ongoing or necessary, we are also very experienced in supporting you through that process to help you achieve your aims.
Please get in touch on: 0345 450 5558 or: enquiries@stephens-scown.co.uk