You may be concerned that starting a court process to resolve a financial dispute on divorce will lead to endless hearings, hours of litigation and an eye-watering legal fees bill. The family courts are over-worked and under-staffed and cases can sometimes get lost in the system, or unhelpfully delayed due to a lack of judges.
In an attempt to reduce the number of cases ending up in court, earlier this year the Family Procedural Rules were changed to encourage separating and divorcing couples to engage from the outset with Non-Court Dispute Resolution (NCDR).
NCDR methods include mediation, arbitration, evaluation through a neutral third party (such as the Private Financial Dispute Resolution (pFDR) process) and collaborative law.
This article examines and explains the pFDR process. For an overview and discussion on other forms of NCDR, please see our previous article.
Financial Dispute Resolution hearings
A Financial Dispute Resolution (FDR) is often the second court hearing in the usual 3-hearing process. An FDR is conducted on a without prejudice basis, and it is the stage of the process at which most cases settle.
The court will choose the venue and the date and the judge. The parties will have little or no control over this. The hearing date could be 6 months or more after the date it was requested by the parties. The judge may have a number of other cases in their list on the day of the FDR and may not have been able to read into the papers before seeing the parties and their legal advisors for the first time. The judge may only be able to spend a few hours with the parties on the day of the FDR. In some cases, the hearing is postponed due to lack of court resources. In those circumstances, any legal costs incurred by the parties are wasted.
The judge will be provided by the parties with a detailed asset summary and will hear from each party or their legal representative with their proposals for settlement. The judge will give an indication as to how, in their view, the parties income, capital and pension might be redistributed between them if their claims were determined at a final hearing (trial). It is then open to the parties to agree to accept the indication of the judge, and sign up to a settlement in those terms, or to reject the indication and take their case to a final hearing (trial).
The purpose of an FDR is to encourage parties to settle their claims at an early stage of the court process and by so doing avoid unnecessary costs, time, and uncertainty of a final hearing.
A private FDR is an out-of-court FDR. The parties step away from the court system and instruct a privately-paid-for judge, often referred to as a neutral evaluator (usually a practising barrister). The parties choose the identity of their evaluator, the date, time and venue of the pFDR. This can lead to greater investment in the process; knowing they have chosen their own expert. The evaluator will invariably have more time than a court-based judge to read into the case and will spend all day on the day of the pFDR with the parties and their solicitors and barristers before providing his/her/their indication.
Is my case suitable for a pFDR?
In most cases, the answer will be yes. The extra cost may be daunting, but it will usually be shared between the parties and there is no risk of wasting money on a court-based hearing that might be cancelled at the last minute.
If the parties’ claims cannot be settled at a pFDR, it will then be for them to choose whether to take their case back into the court-based system, or instruct another private judge (called an arbitrator) to determine their case at a private final hearing (trial).
At Herrington Carmichael, we understand that reaching a financial settlement with your spouse or former partner can be a costly and lengthy process, often arriving at a time of stress and financial uncertainty. Our family law solicitors are here to help you make sense of your options, including whether a pFDR is suitable for you.
If you are looking for expert, tailored advice, please contact us to arrange an appointment.
