02nd Jun 2020

FDR hearings, but not as you think

By Carla Ditz

FDR hearings, but not as you think. 

With limited access to the Courts at present due to the Covid-19 pandemic and most hearings being postponed until further notice, those clients who are knee-deep in the litigation process may be wondering

  • how long before their court hearing is resumed; and
  • might there be another way to reaching a settlement to speed up the process?

The answer to the first question is not yet known. But for the second question the answer is an affirmative yes.

An alternative process has long been in existence but has not gathered the momentum or attention it deserves….until perhaps now. Alongside mediation and arbitration,  Private FDR hearings sit proudly as a means of assisting couples to resolve the issues between them.

In this blog, we take a look at the benefits of Private Financial Dispute Resolution Hearings and why clients should give serious consideration to these hearings as an alternative to a court-based FDR, particularly during lockdown.

What is a Financial Dispute Resolution (FDR) Hearing?

Before we look at benefits of a private FDR hearing, it is worth taking a minute to remind ourselves of the purpose of the FDR hearing itself.

  • During the normal course of financial proceedings, the court will list a First Directions Appointment (‘First Appointment’). This is a short hearing where the case is outlined to the judge and a court timetable is set in motion including the financial disclosure process.
  • At the First Appointment, the court will then list the subsequent hearing, the FDR hearing. As its name would indicate, the key feature of this hearing is a means of assisting the parties to reach a settlement as the FDR judge provides an indication of what he/she thinks the outcome will look like should the case proceed to the final stage, the Final Hearing. Equipped with this information, and also the reality that legal fees will soar until the date of the Final Hearing, many cases settle either at the FDR hearing or shortly after with each parties’ positions converging, often with concessions on both sides being made in order to reach an agreement.
  • Unlike other hearings, the FDR hearing is more akin to mediation with the judge acting as mediator. The FDR hearing therefore enjoys the special status of being ‘without prejudice’ or private so conversations can take place freely and in the spirit of negotiation. Ultimately what this means is that a Final Hearing judge will have no knowledge of what was discussed at the FDR hearing.
  • If the parties are able to reach an agreement at the FDR stage, the judge can make the order by consent. If not, no order can be made and the case will then be listed for a Final Hearing.

FDR hearings are a valuable tool which enable focused negotiations to take place. When the realities hit home, be it emotional or financial, there is a very real opportunity to finalise matters there and then. With momentum and motivation, agreements can be achieved with the end in sight.

So how does a private FDR differ from a court-based FDR?

Private FDR hearings vs Court based FDR hearings

A private FDR is held before an agreed judge, at an agreed time and at an agreed location. The hearing can be scheduled very quickly and at a time to suit all parties. It is easy to see the appeal of this process primarily as it avoids the need to wait for a court-based hearing. This is particularly relevant during the lockdown period.

With remote hearings now up and running on various platforms such as Zoom or Microsoft Teams, a private FDR hearing can still take place (and for some clients, doing this from their own home may in fact be preferable particularly where one party is abroad).

Court based FDR

Judge

A judge is allocated to the case but may not have the requisite experience eg. the judge may have more experience of children matters rather than financial matters.

There is always the risk that a judge may not have had the time to read the papers before the hearing takes place. This can hinder the effectiveness of the hearing as the judge is not well prepared or familiar with the facts of the case before the parties attend court.

Timing

There are delays with listing court hearings and the timing of the hearing itself is restricted.

Hearings may also be listed late in the afternoon which does not always allow for an effective FDR as negotiations may be cut short and momentum is lost. Parties do not therefore get the service they deserve particularly having paid large sums for legal representation.

Venue

It can be difficult to have settlement negotiations in the court building with insufficient consultation rooms.

Costs may be incurred in attending the hearing itself particularly if one party lives abroad.

Private FDR

Judge

The parties choose the judge themselves.

All papers can be sent to the judge beforehand. This allows the judge to familiarise him/herself with the case before the private hearing.

Timing

The parties choose the date and time of the hearing and the hearing can be scheduled as soon as the parties require it.

A full day can be allocated to allow plenty of time for negotiation. A private FDR is not time limited therefore, unlike at court.

Venue

The parties choose the venue. This can be completely neutral to all parties and can provide for sufficient meeting rooms and consequently, privacy.

Technology allows for these hearings to take place remotely.

What are the downsides to a Private FDR Hearing?

  • Cost! This will vary depending on the seniority of Judge which is chosen.
  • A private hearing is a voluntary process so you cannot compel a party to attend. However, given the costs and planning that will be involved, it is hoped that this would act as an strong incentive.

Why opt for a Private FDR hearing?

Even before the global pandemic, the courts were overwhelmed and under resourced. This led to considerable delay in the listing of cases and leaves clients in limbo, as they wait for their hearing date. Post lockdown, we will almost certainly see more delays as the system slowly gets back on its feet again. An effective and successful private FDR can avoid a potentially ruinous situation of going through the full court process with the associated cost and delay.

There is also a misconception that private FDRs should be limited to big money cases. Cases where there are relatively modest assets in question can equally benefit (arguably more so) from this process which may prove to be quicker and cheaper in the long run and preserve valuable resources for the family.

Why wait?

Until the lockdown eases, the opportunity and technology is there and we have seen that remote hearings are proving effective. The technology does in fact lend itself well to this type of hearing with ‘break-out rooms’, ‘advocate rooms’ and chat facilities available.

The process, including the wealth of experienced private judges, is well established and at Family Law in Partnership, we have been promoting the idea of Private FDRs since 2007 when we were involved in (what we believe to be) the first ever Private FDR.

For more information on Private FDRs, please contact any of our top London divorce and family lawyers on E: hello@flip.co.uk or T: 020 7420 5000 for advice.

Please also see our dedicated web page: Solicitor Led Negotiation and Private FDRs for more information.