Are Private Financial Dispute Resolution hearings the way forward for divorcing couples in these uncertain times?

Are Private Financial Dispute Resolution hearings the way forward for divorcing couples in these uncertain times?

A ‘private’ FDR hearing may sound like something created for high net worth divorcing couples, but that is not the case. It can be of great benefit to all divorcing couples.

There are a number of advantages to participating in a private FDR hearing. In light of COVID-19/Coronavirus, with physical hearings only taking place where absolutely unavoidable and the court’s immediate capacity to deal remotely with cases being limited; these advantages have become more important and attractive than ever before. Further, recent local guidance for London financial remedy court judges provides that all FDR hearings ‘‘should if possible be dealt with by way of private FDR’’ and should be conducted remotely.

The push towards private FDRs could not be clearer.

So what is an FDR hearing?

A Financial Dispute Resolution hearing is the second hearing in financial remedy proceedings; the hearing after the First Appointment and before the Final hearing.

During an FDR hearing, a judge will give you and your spouse a clear indication of what financial orders a judge is likely to impose on you if you do not reach a financial settlement and the case proceeds to a Final hearing. For example, the FDR judge will give you an indication about what should happen to the family home, whether there should be a pension sharing order, whether one spouse should pay the other spouse spousal maintenance and for how long or whether there should be a clean break and so on.

Outside of court, you and your spouse will try to negotiate and agree a financial settlement with the assistance of your solicitor and your barrister. Anything you say or any offers you make in a genuine attempt to settle, will be ‘without prejudice’, meaning that your spouse cannot use what you have said or proposed against you at the final hearing. For this reason, the judge at an FDR hearing cannot hear the case at a final hearing. A judge will encourage you and your spouse to negotiate but will not and cannot impose a financial settlement on you.

What is a Private FDR hearing?

A private FDR hearing is one that takes place outside the court arena. You and your spouse will appoint and pay for an independent financial remedy specialist to act as a judge. The specialist will conduct themselves in the same way as a court judge would, in that he or she will give you a clear indication of what financial orders a judge is likely to impose on you if you do not reach a financial settlement and will encourage you to negotiate.

What are the advantages of a Private FDR hearing?

Flexibility

A private FDR hearing is more flexible than a court FDR hearing. A private FDR hearing can be arranged at a day and time convenient to you and your solicitor and in accordance with your diary commitments.

In comparison, a court FDR hearing will be imposed upon you. You will need to be available on the day and time set by the court unless there are exceptional circumstances or you and your spouse come to an agreement to vacate and relist the hearing.

Place

A private FDR hearing can take place in a location and forum convenient to you. Ordinarily it would take place in your solicitor’s office, in a barrister’s chamber or even in a hotel conference room. Now, as a result of COVID-19/Coronavirus, the hearing will take place remotely and can be conducted from the comfort and familiarity of your own home, from a computer, laptop, iPad or even a mobile phone. This means that you will not be held back by self-isolation, being stuck abroad or living abroad.

If you are worried about security and privacy, don’t be. Separate virtual meeting “rooms” can be set up for each party and their legal representatives to have private discussions in, and there can be separate “rooms” for your barristers. Parties can also privately chat to their legal advisors through typed messages whilst in the presence of the financial remedy specialist. Hearings can be recorded and password entry would be required.

In comparison, and ordinarily, a court FDR hearing will involve you attending and negotiating in an often rundown court with limited or no rooms to carry out private discussions. At the moment, they are being carried out remotely, if at all.

Expertise

In a private FDR hearing, you can choose the financial remedy specialist and can ensure that he or she is indeed a specialist. You can also choose someone who has particular niche expertise, for example, a specialist who has experience in dealing with international business assets, or a specialist who has experience in dealing with a pension that has reached its lifetime allowance.

In comparison, you are allocated a judge in a court FDR hearing and there is no guarantee that the judge you will get on the day has a wealth of experience in dealing with financial remedy cases, let alone specialist experience.

Preparation

In a private FDR hearing, the specialist you choose will carefully read and consider all of the documents you provide him or her with and on the day. The specialist will have a good grasp of the issues between you and the assets and liabilities involved.

In comparison, a judge is often stretched for time. Quite often they will read the documents just before the hearing is due to start and in some cases, the judge may not have read the documents at all!

Time

The private FDR hearing specialist will be at your disposal throughout the day. He or she will be there to guide and assist you as and when you need it. If you run out of time, you and your spouse can continue to negotiate on another day.

In comparison, a judge in a court heard FDR will not be at your disposal. They will often have many hearings to deal with on the same day and you may not receive more than one hour of their time. In addition, you will not be allocated a time to see the judge, which means that you could be called into court at any time during the day. If you are called in during the late afternoon, you and your spouse could have very little time to meaningfully negotiate before the court closes. This procedure has, however, altered because of COVID-19.

Costs

You and your spouse will split the cost of the specialist equally unless you agree otherwise. From my experience, instructing a specialist for the day will cost anywhere between £3,000 plus VAT to £8,000 plus VAT depending on experience. That said, and from my very recent enquiries, a number of barrister chambers are offering a welcomed discount to help ease the difficult economic times people are currently faced with and because remote hearings tend to be much more efficient, saving on both time and travel costs.

When compared to the numerous advantages set out above, this is not a significant amount of money, particularly if you and your spouse are committed to reaching a financial settlement. Private FDR hearings have a very high settlement rate.

It is important that you seek specialist independent family law advice from a solicitor regarding whether your case is appropriate for a private FDR hearing and if so, how you should best prepare for it. The family law department at BLM can help.

 

 

 

Disclaimer: This document does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. It is intended only to highlight issues that may be of interest to customers of BLM. Specialist legal advice should always be sought in any particular case.

 

Who to contact

Yasmin
Khan-Gunns

Solicitor , London

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Grainne
Fahy

Partner , London

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