Clients, on advice from their Family Law solicitor, are increasingly using a private Financial Dispute Resolution hearing (a “private FDR”) to seek to resolve the financial dispute with their spouse or civil partner on divorce or dissolution of a civil partnership. This article will explain what a private FDR is and how to effectively prepare for the hearing so that clients can get the most out of the experience. If a private FDR is successful, it can reduce stress, costs and delay of further court proceedings.
What is a Private FDR?
A Financial Dispute Resolution Hearing is usually the second Court hearing in financial proceedings on divorce or as a result of a dissolution of a civil partnership. The purpose of the hearing is to try to facilitate settlement negotiations between the parties to enable an agreement to be reached without the need for a contested final hearing. The hearing is “without prejudice”. This means that the negotiations cannot be referred to at a final hearing. As a result, parties are encouraged to set out what they would agree to without fear that their concessions will be referred to at a final hearing. A Judge will give an indication as to what they consider the outcome would be if the matter were to proceed to a final hearing – this is intended to encourage the parties to narrow the issues to assist with settlement. It is not a binding indication, and the Judge cannot hear the final hearing if a settlement is not reached.
More information about what an FDR is can be found here – What an FDR Hearing Is in Divorce Cases | Stephens Scown
A private FDR is very similar to a court based FDR but someone is employed by the parties to act as a Judge. The Judge is often a senior barrister or retired Judge. It is a voluntary, out of Court hearing, but if undertaken, the need for a Court based FDR can very likely be dispensed with. There are a significant number of benefits to a Private FDR in comparison to a Court based FDR including:-
- It takes place at a time and venue suitable to the parties – this is often more quickly than a Court based FDR can be arranged;
- The Judge is chosen by the parties taking into consideration the issues in the case;
- The Judge will have time to thoroughly prepare for the hearing, and will often spend the whole day (or days) with the parties. Court hearings in comparison are often bulk listed, and parties may get an hour or two before a Judge
- It is entirely confidential
More information about the benefits of a private FDR can be found here – Private Financial Dispute Resolution | Stephens Scown
How Should you Prepare for a Private FDR?
Given that a Judge will be being employed by you and your spouse/civil partner which will come at a cost shared between you, both you and your spouse should be invested in the process to try to reach an agreement. Making the most of the time before the private FDR judge is essential because it is often the best opportunity for a settlement to be reached without further costs, delays or stress.
As a result, it is recommended that:
You ensure that there has been full and frank financial disclosure. Settlement options should only be considered if you understand the finances available. It is important therefore to try to reach an agreement on valuations such as for properties, pensions and business interests, or if an agreement cannot be reached, for valuations to be determined by an expert. Yours and the other party’s financial disclosure should be up to date, and you should discuss any gaps or questions regarding the content with your solicitor.
Understand what your needs and priorities are. Consider your housing need, your income requirements, your earning capacity, the needs of the children, and your attitude to risk. It is often helpful to think about what your preferred option would be, but also what your bottom line is. Think about what the other party’s needs are so that you can anticipate what approach you think they may take to settlement. Communicate these with your solicitor.
Communicate with your legal team. If you are being represented by a barrister at the private FDR, ask your solicitor whether you should have a conference with that barrister before the private FDR. Your representative will often prepare a position statement, schedule of assets and offer before the private FDR. Ask when you should anticipate receiving these, and then review the documents carefully in advance to ensure they are factually correct, and reflect your views about settlement. Ask questions if needed.
Prepare for the day itself – often private FDRs will take a day, or a number of days. Make sure that you keep the entire time free of appointments, or other responsibilities so that you can focus entirely on the indication by the Judge and the negotiations. Arrange child care if necessary, and pay for enough parking if needed – worrying that you need to leave to pick up the children or to put more money on the parking meeting are distractions that are best avoided. Be prepared for long periods of waiting – this is entirely normal, and part of the process.
Listen carefully to what the Judge has to say – although it is not binding, it can provide a good steer about the strengths and weaknesses of each party’s case, and is an impartial, experienced view of the likely outcome. Ask your legal representatives about the indication when you have an opportunity to do so in private when you are no longer in the same room as the Judge. Ask them what they consider that your position should be for settlement in light of the indication.
Try to take a constructive approach and be willing to compromise where possible and reasonable to do so.
What Happens if an Agreement is Reached at a Private FDR?
If an agreement is reached, heads of agreement are normally recorded on that day. A consent order is then drafted by the legal representatives which needs to be approved by the Court – this is a document which more fully and formally records the agreement reached at the private FDR. It is normally approved by the Court on paper without the need for anyone to attend. Once approved by the Court it is full, final and binding on both parties.
A private FDR is a useful process to help parties reach an agreement by negotiation to reduce the stress, time and cost of a final hearing in the resolution of finances on divorce or dissolution of a civil partnership. If you are interested in considering a private FDR, we have experts who can advise you as to the process, and whether it is the best approach in your circumstances.
If this is something you need help with, our Dispute Resolution team are here to help.
If you are considering private FDR get in touch with our Family Finance team to discuss options.