Concept for Private FDR – are they just for ‘big money’ cases?

To understand what a Private FDR is, it is helpful to first know what a standard FDR is. FDR stands for a Financial Dispute Resolution appointment and is the first time during the Court process where a Judge will review the financial circumstances of separating spouses and give an indication on the likely outcome if the matter were to proceed to a Final Hearing.

Unlike a Final Hearing, the Judge’s indication at an FDR Hearing is not binding. It is hoped, however, that clear guidance from a Judge can help to narrow the areas of dispute between separating spouses and allow them to reach a settlement, without incurring further costs.

FDRs are a very useful step in the Court process, and many cases settle at or shortly after this Hearing. For this reason, there has been an increase in the use of Private FDRs, either as part of a Court process (for example, to hurry matters along if Court delays would mean an FDR appointment will be a considerable wait) or as an alternative to the Court route.

What is a Private FDR?

With a private FDR, the separating spouses will agree, through their solicitors, a date and convenient location, and then jointly instruct a private Judge. The Judge will have the benefit of time to read the financial paperwork (Court Judges will often have multiple cases in their schedule and so may not be able to give this as much time as they would otherwise like) and will hear about each spouse’s position from their legal representatives. The Judge will then give an indication as to the outcome, much as they would at a Court FDR.

The benefits of a Private FDR

There are many benefits to a Private FDR but one glaring concern for many will be cost. As such, a common misconception has arisen that Private FDRs are a recourse only for those with significant assets. That is not the case – Private FDRs can be an excellent tool in all manner of circumstances. Whilst there is the additional cost of appointing a private Judge, this can be justified by the benefits such as the speed it can be arranged, the bespoke approach that can be taken, and the increased likelihood of settling upon getting a clear indication, from a Judge that has had the time to thoroughly understand the case.

Take, for example, a case where one spouse is meeting all outgoings for a family home that they are no longer living in. Without a private FDR, the paying spouse could be looking at over five months of these payments before a Court FDR could take place. A Private FDR can be held as soon as the financial information is available. The savings to the paying spouse by resolving the outgoings situation could therefore very easily cover the increased cost of a Private FDR.

Another example is where the separating spouses have tried to resolve their finances before reaching an impasse, such as through mediation or solicitor negotiation, and have completed an exchange of financial information. If Court proceedings were issued, the spouses would need to repeat this exercise in accordance with the Court directions, resulting in increased costs. A Private FDR could be an excellent tool here – getting an indication without delay, rather than incurring the cost of repeating steps for the Court’s benefit.

In summary, there are many advantages to a Private FDR, the benefits of which are not just limited to cases where there are significant assets. As a team, we have been involved in many successful Private FDRs and expect to see this tool used more frequently in the future. Get in touch with our Family team to discuss.