The benefits of a private financial dispute resolution appointment in divorce proceedings

John Osborne, head of Harrison Drury’s divorce and family law team, considers the benefits of private Financial Dispute Resolution appointments (FDRs) in reaching a financial settlement during divorce proceedings.

In Financial Remedy Proceedings, the FDR is usually the second of three hearings. It provides an opportunity for each party to put forward their settlement proposals to a judge who will consider the reasons for each proposal, in line with any supporting documents that have been filed with the court.

Each party’s legal representative will give submissions and the judge will commonly give their own view on how the case would likely conclude if it was to proceed to a Final Hearing (the third and final hearing).

The purpose of the FDR is to encourage the parties to settle the case to avoid it progressing to an expensive Final Hearing, saving time, costs and stress. Further details regarding the process are outlined in our article : What to expect in divorce court: Financial remedy proceedings.

Prior to the FDR, the judge should have an opportunity to review the hearing documentation. However, court lists are regularly crammed or even over-listed, so judges have less time to review the papers and often have to allocate reading time during the hearing itself. This is not always helpful, particularly when there are several complexities that need to be explored.

This can cause the FDR to be ineffective, wasting the parties’ time and money which can, understandably, cause further frustration. As such, a private FDR can be a favourable option.

A private FDR presents many benefits, for example:

• The parties jointly choose the private FDR judge, who is often a retired or part-time judge or an experienced solicitor or barrister.
• The private FDR can take place in chambers, solicitors’ offices or, more recently, by way of virtual platform rather than in court, removing some of the pressures associated with court proceedings – it provides a much more relaxing environment.
• The private FDR judge will know the case inside and out as they will be given plenty of preparation time ahead of the hearing to review the papers.
• The hearing itself can take place on a date chosen jointly by the parties for as long as the parties desire, providing convenience and flexibility. Many such hearings last all day to give the parties thinking and discussion time.
• The case is more likely to settle due to the voluntary nature of the hearing (as the parties have chosen to attend and have agreed when, where and how long the hearing should last).
• As with a court FDR, the judge’s indication is not binding – the parties are not forced to come to an agreement however if they do, Heads of Terms or even an agreed order will be prepared on the day.

The structure of a private FDR is similar to a court FDR. At a private FDR, both party’s legal representatives will make submissions to the private FDR judge, who will provide an indication on the likely outcomes, having already considered the hearing documentation. The parties will then enter into negotiations on the day, and may even meet with the judge again to discuss certain aspects of the indication, if further input is required.

Essentially, the judge will remain on standby to provide further assistance until the parties have agreed to release the judge (or if they come to an agreement). At court FDRs, judges are usually tied up in other hearings on the same day, so their full attention is not guaranteed.

While a private FDR can typically cost between £7,000 and £10,000, in high net worth cases the cost is relatively small to have an experienced specialist’s attention to achieve a bespoke solution.

Harrison Drury’s divorce and family law team has experience in dealing with private FDRs. If you require advice regarding financial remedy proceedings or would like to know more about private FDRs, please contact our team on 01772 258321.