Private Financial Dispute Resolution (FDR) – What you need to know.

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Frustratingly, long waits for Court hearings and last-minute hearing cancellations are becoming increasingly common place. This is incredibly costly for the parties, both emotionally and financially. But what can be done?

Should I have a Private FDR?

A large majority of financial disputes on divorce will settle either at or shortly after what is know as the Financial Dispute Resolution hearing (“FDR”). This is usually the second Court hearing, unless the parties have been able to manage the disclosure process voluntarily and in advance, when it can take place at the first Court hearing. Alternatively, the parties can avoid the stress and uncertainty of the Court timetable and arrange a private FDR.

For a private FDR, the parties select the Judge (who will be a financial remedies specialist with considerable and appropriate experience), the date and the venue of the “hearing”. On the day, their selected Judge will have read the relevant papers prepared for the hearing and will have the entire day dedicated to assisting with their matter (at Court, the Judge will have a number of other matters before him on the day and may be extremely short of time).

We already have Court Proceedings; can we still arrange a Private FDR?

Absolutely, if both parties agree to a private FDR they can ask the Court to adjourn the Court Proceedings to allow time for this process.   If the negotiations are successful, the Court will then review the Order and assuming there are no points of concern, approve it without need for a further hearing. If the negotiations are unsuccessful, the Court can then be asked to list a Final Hearing or the parties could agree to list an FDR at Court, however a Final Hearing is most likely to be the next step if the private FDR is unsuccessful.

A private FDR may not be appropriate if one of the parties is refusing to provide full and frank disclosure. It is not advisable to enter into settlement negotiations until you have a clear understanding of the financial circumstances and are comfortable that the private FDR Judge will have a full and accurate picture of your and the other parties’ financial positions. It may be necessary to seek an Order from the Court for further disclosure either from the other party or from third parties as a first step.

What about Arbitration?

The most notable difference between proceeding with a private FDR as opposed to an Arbitration is who is in control of the outcome.

  • In a private FDR, you are negotiating with the assistance of the appointed Judge. The Judge is not able make a final Order. If you cannot reach an agreement, the matter will need to go to Final Hearing (or Arbitration).
  • In Arbitration, you are presenting your case to the appointed Arbitrator and they will make the final decision which will be binding on both parties. It is difficult to appeal the decision of an Arbitrator.

How much will it cost?

The costs involved will depend on the parties own legal representation (which will charge in the same way as they would for an FDR within the Court Proceedings) and the Judge selected by the parties. Parties should expect to pay £1,500 to £3,000 plus VAT each for an experienced private FDR Judge, more if the matter is complex and requires more than one day and/or the appointment of a senior barrister.

The hearing will most likely be hosted in the offices of one of the solicitors, or the Chambers of one of the barristers, involved in the case at no extra cost. Alternatively, it can be hosted online as has been the case through the pandemic, again at no extra costs, or in private meeting rooms in a location that is most convenient to the parties, which may add an additional expense. Whichever of the above options is selected, it will be a significantly more comfortable environment than a public Court building.

Contact our Family Law experts

The family team at IBB frequently use alternative dispute resolution methods in the attempt to settle financial matters arising on divorce. For further information please contact Charlotte Southworth, senior solicitor.