Financial Dispute Resolution Hearings
The Financial Dispute Resolution Hearing (FDR) is an important hearing in the early stages of financial proceedings.
What happens at the FDR?
The judge expresses a view about the likely outcome of the case should it proceed to a full hearing or arbitration, in the hope of assisting the parties towards settlement if they have not managed to do so through their solicitors. FDRs are more informal than normal court hearings, with some time for negotiations.
FDR hearings are heard ‘without prejudice’ to the parties’ open positions. This means that the judge at the FDR is able to see all without prejudice correspondence including without prejudice offers made by both sides.
Correspondence marked ’without prejudice’ by the party sending it cannot be referred to at any other court hearing and cannot therefore prejudice a party’s position at a final hearing. The benefit of sending proposals to settle on a without prejudice basis is that it enables both parties to compromise on their open positions in an effort to reach a consensual settlement outside court.
The judge at FDR is able to see all correspondence between the parties, including without prejudice correspondence, so that judge cannot then go on to hear the final hearing. Any opinion they express at the FDR will not be available to the judge deciding the case at trial.
There are two types of FDR:
- Either the parties can attend the FDR listed by the court in the usual course of the financial proceedings
- Or they can arrange a private FDR of their own accord.
Are there any disadvantages to the court FDR?
FDRs have good success rates and many cases settle at the hearing or shortly afterwards, on the basis of the indication given by the FDR judge. However, they have their limitations:
- The FDR can only take place at a specified time in the progress of a case
- Due to the high volume of cases, there is usually a considerable delay before the FDR can take place
- As with other court hearings, the parties have no power to choose who the judge will be. Judges have their own specialisms and it may be that the judge assigned to deal with the case does not have the most relevant experience or expertise to deal with the matter effectively
- Due to government cuts, court judges are very busy and typically hear several cases each day. As a result they may not have time to read the papers and fully prepare for each hearing
- The FDR judge will usually only be able to deal with one aspect of any dispute, for instance, children or money
What are the advantages of a private FDR?
Private FDRs, also known as ‘early neutral evaluation’, are increasingly common and offer many advantages over court FDRs:
- The parties keep control of the process and progress at their own speed. The date, place and time of the hearing is set by the parties, with no risk of the court vacating to make way for other business
- They can take place before court proceedings are even started, to encourage settlement, or at any stage during the court process. Private FDRs do not prohibit the use of the court system later on
- The FDR can deal with all or any aspects of the dispute, as agreed by the parties, and issues are not confined to finances
- The parties are able to choose a judge, referred to as an ’evaluator’, with the necessary experience and expertise relevant to the issues between them, and in whom they and their lawyers have confidence. The evaluator could be a judge or a specialist family barrister
- The evaluator will have had the opportunity to read the papers and prepare for the hearing in advance
- The FDR can take place wherever the parties wish, for example the solicitors’ offices or counsel’s chambers, and can be relatively informal
- The parties are not limited to the time allocated by the court and can take as long as is required. The parties usually have a full day to conduct the hearing and negotiations can continue as late as is necessary when progress is being made. The evaluator will be available throughout the day to provide further guidance and assistance. If further time is needed on a different day, the parties can elect to continue the private FDR without being reliant upon court listing.
A good analogy is to compare the NHS and private healthcare. As is more often the case with private appointments, the patient is able to see a specialist with expertise in a particular area and they do not have to wait as long to be seen. In the same way, the parties can tailor the private FDR so that it meets their requirements.
What happens after the FDR?
If the parties cannot agree a settlement, the judge at either a court or private FDR does not have the power to make a final financial order and impose a settlement. If a private FDR has taken place before court proceedings have been initiated then either party can later decide to issue an application for financial relief and set the court timetable in motion.
Otherwise, the parties will seek to obtain a directions order from the court to prepare the case for trial and fix the trial date itself, if this has not already been provided for in the timetable.
Alternatively they could both agree to arbitrate and adjourn any court proceedings as necessary. Arbitration is also an option following a private FDR where there are no court proceedings, if the parties wish to avoid court altogether. Whether there is a final hearing or arbitration, the outcome is binding.
What happens during arbitration?
If the parties decide to enter into arbitration, the arbitrator will determine the unresolved issues between the parties. The parties will have expressly agreed to be bound by the arbitrator’s award, which is later presented to the court as an agreed consent order for the court’s consideration and approval. If one party disagrees with the outcome (despite the fact that the determination is binding), the other party may need to apply to the court to enforce the award. There are also set grounds and procedure for appeal, as with the outcome of a final hearing.
What are the advantages of arbitration?
The advantages include:
- The arbitrator is selected by the parties to ensure that they have the necessary expertise. The parties are free to choose the judge/evaluator from the private FDR, so that they are aware of the issues still in dispute
- The terms of appointment are agreed between the parties and the arbitrator is aware of precisely what issues require determination
- The procedure is flexible to suit the parties’ needs and circumstances, for example, the parties could ask for a written determination on paper, a determination on one issue only, or a full hearing with evidence similar to a final hearing in court
- The hearing will take place when and where the parties wish (they can even take place abroad). They do not have to wait until the court can find a date
- The process is completely private and confidential
How can we help?
Our Family team realises that the FDR is a great opportunity to settle any dispute, or at least narrow the issues between the parties, and it should not be wasted. Ultimately, the aim is to avoid the often unnecessary expense of a final hearing.
It is important, therefore, when faced with the prospect of an FDR, to take a step back and view it as an opportunity to dispose of what can be stressful and protracted court proceedings, in a commercial and constructive manner.
To do so it is well worth considering whether a private FDR could help you to achieve that goal. We have the experience to advise on the merits of opting for a private hearing depending on the circumstances of your case. If you have any queries regarding the court FDR and the possibility of a private FDR then please don’t hesitate to contact us. We consider the most appropriate course of action to reach an early settlement if possible and to control costs if a hearing is required.
For more information or guidance please contact:
Partner and Head of Family
T. 020 7227 7448
T. 020 7227 7348
This briefing is for guidance purposes only. RadcliffesLeBrasseur LLP accepts no responsibility or liability whatsoever for any action taken or not taken in relation to this note and recommends that appropriate legal advice be taken having regard to a client's own particular circumstances.