BPE Solicitors explores what the future of Private Financial Dispute Resolution could be

While every effort is made to make the divorce process as smooth as possible and to help couples come to a mutually agreeable conclusion, sometimes couples can’t agree a financial settlement.

The court process is designed to ensure that the appropriate financial information is provided and that real attempts are made to reach an agreement before a Judge makes the final decision for the couple.

There are three possible hearings which can take place. The First Appointment, which is usually an administrative hearing to deal with the gathering of further evidence and any expert’s reports, the Financial Dispute Resolution appointment (FDR) and, if no settlement can be achieved, a Final Hearing at which the Judge will listen to the evidence and make the final decision for the couple.

The purpose of the FDR is to encourage settlement and involves the Judge giving the parties an indication of what they would order by way of a final settlement if they were making the decision there and then. This indication is aimed to help the couple iron out their differences and reach an agreement which avoids the court proceedings continuing on to a Final Hearing where another Judge will make the decision for them both. Whilst the Judge at the FDR can’t resolve any factual disputes, they will look at the case in broad terms to assist the couple in reaching an agreement. The discussions at the FDR cannot be referred to at the Final Hearing, which enables concessions to be made at the FDR in the hope that agreement can be reached without compromising the ability to argue something different at the Final Hearing.

The combination of the significant additional legal costs and the ongoing delay in finalising an outcome mean that many cases settle at the FDR hearing or shortly afterwards. However, with the court system flooded with cases, and with ongoing impact of delays during the Covid pandemic, it is not unusual to wait at least six months, and in some areas almost a year, for an FDR hearing date. This long delay is pushing couples to consider alternatives to be able to move on with their lives.

An increasing popular alternative is the “private FDR”. This is akin to the court-based FDR hearing but involves the couple appointing an “evaluator” to preside over the hearing which takes place outside of the court, usually at one of the solicitor’s offices. The evaluator will usually be a senior family lawyer, barrister, arbitrator or part-time judge. The couple share the costs charged by the evaluator (which will depend on their seniority but could be around £3,000) and secure their assistance for an entire day. This is unlike the court-based FDR where the Judge will usually have multiple cases to deal with that day and so will not be able to spend very long with each case. Despite the Judge’s best efforts, this can feel rushed and pressured for the couple involved. Being in the court building can also feel more stressful, with limited private meeting rooms and usually no easy access to refreshments.

With the private FDR you therefore get the attention of the evaluator for longer and can obtain a far more detailed appraisal of the case as they have the time to review all of the papers produced and engage and interact with the couple and their lawyers much more. This gives the couple the time and space to roll their sleeves up and give it their all to arrive at an agreed settlement. Breaks can be taken whenever desired in a much more comfortable environment.

Whilst there is the additional cost of the evaluator, this is often outweighed by the benefits of being able to hold the private FDR far sooner than the court could accommodate. If the private FDR isn’t successful, there is no requirement to participate in a court-based FDR and the case can move straight on to the Final Hearing. No time is lost therefore and often, there is an overall saving in legal fees.

If you would like to find out more about whether a private FDR might suit your case, please contact Helen Cankett, Partner and Head of the Family team on 01242 248256 or email helen.cankett@bpe.co.uk.

These notes have been prepared for the purpose of articles only. They should not be regarded as a substitute for taking legal advice.