1.     What is an FDR?

An FDR is an abbreviation of ‘Financial Dispute Resolution’. It is usually the second hearing in a financial remedies case in the family court in connection with a divorce though they are also utilised in cases under Schedule 1 of the Children Act 1989 (for financial support of children between unmarried parents). Part 9 of the FPR states that the FDR is “to be treated as a meeting held for the purposes of discussion and negotiation” (rule 9.17(1)) and “parties attending the FDR must use their best endeavours to reach agreement on matters in issue between them” (9.17(6), emphasis added).

At an FDR, a judge will usually hear short oral submissions on behalf of each party before giving a non-binding indication on how they would decide the case if they were sitting as a judge at the final hearing. After the indication is given, the parties are expected to negotiate, usually by way of shuttle negotiation between their legal representatives. The judge’s indication often helps parties to narrow the issues and the majority of cases reach a settlement at or shortly after an FDR.

A benefit of the FDR hearing model is it is a without prejudice hearing, which means it is privileged and either of the party’s concessions made during negotiations cannot be referred to in open correspondence or court. Documents prepared for or at an FDR will likely carry WP privilege too, as held by Roberts J in LS v PS [2021] EWHC 3508 (Fam). If you are uncertain what ‘without prejudice’ means, I encourage you to read my article ‘The four W’s of WP Privilege’ which explains this further.

FDRs are now commonly adopted on a voluntary basis as a form of non-court dispute resolution (‘NCDR’) without the parties having engaged in litigation in court at all. An out of court FDR is known as a private FDR or ‘pFDR’ for short.

2.     What is a private FDR or ‘pFDR’?

In a private FDR, the ‘judge’ is likely to be a barrister (or retired judge) sitting as a ‘tribunal’ and the parties would usually pay for their fees by splitting the cost equally. The advantage of having a private FDR over a court-based FDR is that the parties can choose their judge and be satisfied that they have the specialist experience to decide their matter and, consequently, and likely more invested in their indication. The private judge will usually have the entire day set aside to devote to the FDR, will have read all the papers and may provide their indication in writing as well as deliver it orally, which can be useful for the parties and their legal team to refer back to. In contrast, a judge in court may have four or five FDRs or other hearings listed before them in one day. However, a pFDR can only be entered into if both parties agree.

3.     Why do we have FDRs?

FDRs were introduced in 2000when they were included in the Family Procedure Rules (‘FPR’). The intention was to encourage the parties to focus on the real issues in the case in a timely manner (i.e. before reaching the final hearing or trial) and reduce the costs and stress associated with continuing to be engaged in litigation. It can be helpful to have a neutral and experienced third party express a view on the case and split the difference or narrow the issues between the parties. The judge is also a fresh pair of eyes to the case which can assist the parties from remaining in their otherwise entrenched positions and unlock the pathway to settlement.

4.     When does an FDR take place?

An FDR should take place when the disclosure process is completed (or completed to a satisfactory level where the extent of the parties’ financial assets is reasonably clear and certain). This is usually after Forms E have been exchanged and a First Appointment hearing has taken place and any directions arising from that hearing complied with, such as obtaining valuations or single joint expert reports (e.g. in relation to tax or pension sharing). Cases involving issues of non-disclosure can utilise the FDR process and a proportionate approach should be taken where these issues are present. This may mean that the judge will need to make some assumptions in respect of the gaps in disclosure or give an indication that provides for different outcomes depending on the missing disclosure that should nonetheless be forthcoming.

If a pFDR is being entered into outside of court, the parties can agree to this hearing at any time; they could even agree to attend a pFDR in respect of a discrete issue. If the parties wish to attend a pFDR but are engaged in litigation, they can ask the court to order a pFDR takes place and to list a directions or mention hearing following the pFDR to deal with case management moving forward.

5.     Where do you find FDRs being used?

As explained above, FDRs are usually found in the context of financial remedy proceedings connected to a divorce but can be utilised in various other applications, including Schedule 1.The FDR model echoes the NCDR approach known as ‘early neutral evaluation’ or ‘ENE’, which is commonly used in the Chancery Division, Commercial Court and Technology & Construction Court to resolve civil and commercial matters. It is, therefore, a tried and tested formula relied upon beyond the realms of the family court as a means of resolving a dispute.

Helpful Resources:

·        Family Justice Council’s Best Practice Guidance: https://www.judiciary.uk/wp-content/uploads/2014/10/fjc_financial_dispute_resolution.pdf

·        FPR: https://www.justice.gov.uk/courts/procedure-rules/family/parts/part_09

For more information on FDR and pFDRs please contact mail@burgessmee.com

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