Talking to a family lawyer can be baffling when they use terminology you are not familiar with. Divorce solicitors need to take the time to explain the terms they use and your options.
In this blog, London family lawyer Angelique Holm explains what a private financial dispute resolution hearing is and why a private FDR can be a good way to reach a financial settlement after your separation or divorce.
For family law advice call Angelique Holm on 0203 488 8620 or email.
info@hopeholm.co.uk or visit our website HopeHolm Family Law.
The financial dispute resolution hearing
To understand what a private financial dispute resolution hearing is you need to know a bit about the financial court application process when a divorcing couple ask a family judge to decide how their assets are divided.
Financial proceedings involve a standard court process of financial disclosure and three court hearings:
- A first directions appointment or FDA
- Financial dispute resolution or FDR
- Final
The FDA is to work out if further financial disclosure is needed following the exchange of initial financial information (in Form E) or valuation evidence.
The FDR is a court or judge-led settlement hearing that takes place in court. The judge tells you what sort of order they think might be made if you go to a final hearing and a judge hears evidence.
The FDR judge hears legal submissions from the representatives of the husband and wife before indicating the likely outcome of the case if it proceeds to a final hearing. The judge then gives you time outside of the courtroom to negotiate and reach a financial settlement. You may then ask for the judge’s views on settlement offers made outside the courtroom after the judge’s initial indication was made known.
After listening to the FDR judge, you and your spouse and lawyers can negotiate a financial settlement or ask the FDR judge to list the financial application for a final hearing. The FDR is a without-prejudice hearing. This means that any offers or concessions made at the FDR hearing cannot be brought to the judge’s attention at the final hearing. Court rules ensure the final hearing won’t be listed before the judge who gave their views at the FDR hearing.
If you reach an agreement with the judge’s help at the FDR hearing, the judge will be asked to make a binding financial court order at the end of the hearing. The order is binding. That means you must be prepared to reach a long-term agreement at the FDR hearing. Your family law solicitor will advise you on any financial settlement offers and explain if, in their view, you might do better by asking the judge to list the financial application for a final hearing.
What is a private financial dispute resolution?
A private financial dispute resolution hearing is similar to one held in the court process but, instead of a family court judge assisting, you and your spouse jointly ask a family law professional to conduct the financial dispute resolution. The professional is normally an experienced family law barrister specialising in family law who acts as a private judge. The financial dispute resolution meeting takes place at the barrister’s chambers or, if that isn’t convenient, at one of the solicitors’ offices.
In other words, a court financial dispute resolution hearing is like using the NHS and a private FDR is akin to using BUPA.
You may think that going private will be a lot more expensive but in the long run, a private FDR can be quicker, more efficient and overall end up costing you less than deliberating back and forth whilst waiting for a date for both the court-based FDR and final hearing.
The cost of a court or private financial dispute resolution
With a court-based FDR, the judge’s time is paid for as part of the court application fee. With a private FDR, you and your spouse pay for the services of the private FDR professional.
The cost of your divorce solicitor and any barrister instructed for an FDR is likely to be the same, whether it is court-based or private.
The extra costs involved in a private FDR may be justified to you because of the advantages of a private FDR. Overall, it may work out cheaper as a private FDR has a greater chance of helping you reach a financial settlement and the legal costs and stress are a lot less in a private FDR than either a court-based FDR or final hearing.
How do you find a private financial dispute resolution judge?
If you are interested in using a private FDR judge to reach a financial settlement it’s important to choose a divorce solicitor with experience in private FDRs. Your family law solicitor will help select a suitable private FDR professional. Most private FDR judges are barristers but it is essential to choose someone that suits your family circumstances. For example, some barristers have expertise in resolving financial applications involving family business assets, pensions or trust assets.
What are the benefits of a private financial dispute resolution?
Why would you pay to use a barrister in a private FDR rather than have a family judge conduct a financial dispute resolution hearing in a court setting?
Here are some reasons:
- The court process is slow. Backlogs mean there could be a long delay in getting a financial dispute resolution hearing date. There may be a pressing reason why you need to reach a financial settlement, such as wanting to sell the family home or business or to reduce the stress of being in limbo until you obtain a financial court order
- The FDR court process can be quite formal as it takes place in court. A different venue can provide more informality and privacy. Those factors can make it feel more comfortable to negotiate a financial settlement. For example, there are limited interview rooms in court buildings leading to corridor discussions to discuss a judge’s indication at the FDR hearing before you have to go back into court to let the FDR judge know if you have reached a financial settlement
- The FDR timing can be inflexible as judges don’t work in the late afternoons or at weekends and sometimes won’t work around your commitments, expecting you to change your commitments. A private FDR can be a lot more flexible
- You can’t guarantee the judge you will get at a court-based FDR hearing. The judge will have a ‘family ticket’ to hear family law cases but they may not have specialised in family law before they were appointed as a judge. With a private FDR, your divorce solicitors can jointly select a family law professional who they both think has the expertise and experience to be best placed to help you reach a financial settlement
- With a court-based FDR hearing the judge may be constrained by time limits if they have other cases listed at the same time as yours. The venue and other considerations at a private FDR can be more accommodating
The difference between a court financial dispute resolution hearing and a private FDR
If you reach a financial settlement at a court financial dispute resolution hearing the judge will normally make a binding financial court order at the end of the hearing. The order is final and can’t be changed or challenged. You get the finality of a court order on the day of the hearing.
At a private FDR, the judge conducting the FDR can’t make a financial court order. Instead, the two divorce solicitors will draw up the agreed heads of agreement or a draft financial court order and send it to the family court for approval. There is normally no need for a court hearing to get your order.
You or your spouse will find it very hard to set aside the agreement reached at the private FDR because you agreed to it on an open basis. That means any judge in court proceedings would be told about the agreement. It is therefore rare for anyone to renege on an agreement reached at a private FDR but the difference between a court and a private FDR is that going private means you don’t get your financial court order on the day of the FDR.
What happens at a private financial dispute resolution?
Every private financial dispute resolution is different but in terms of procedure you can expect:
- Preliminary meeting with your divorce solicitor (and your barrister if instructed) to go over any points and to check if you have any additional questions
- Initial hearing with the private FDR judge, the representatives for husband and wife and yourselves. The representative for the person who started the financial application will make submissions on their key points followed by the other representative. The judge will already have read a bundle agreed by the divorce solicitors and key FDR documents, such as an asset schedule and case summary. Neither spouse will need to speak or give evidence
- The private FDR judge may then need time to consider the representations before indicating what sort of orders the court might make at the final hearing
- The judge will then allow negotiating time for you to digest the judge’s views and see if you can come to a settlement. You will be in a separate room from your spouse and the lawyers will negotiate and take your ongoing instructions. Often a spouse may agree with some aspects of what was said by the judge but not all. For example, a spouse may be pleased that the judge thinks the court would order spousal maintenance but not be happy with the suggested amount or the spousal maintenance term
- You either reach an agreement in the negotiations or reach an impasse and one or both solicitors think further input from the judge would be helpful. For example, on whether spousal maintenance should automatically stop if the receiving ex-spouse starts to cohabit with a new partner or the required amount to buy off or capitalise the spousal maintenance
- The judge may give a further indication based on where you are at with the negotiations. After further negotiation time, you may be able to reach a financial agreement
- If agreement can be reached the family lawyers write up a heads of agreement or financial court order and get you to sign the document so they can submit it to court for approval
Preparing for a private FDR meeting
A successful private FDR is preceded by a lot of preparation work by your divorce lawyer, such as:
- Taking your detailed instructions on what you want out of your financial settlement and why
- Talking to you about the range of potential orders a court could make if you ended up at a final hearing
- Exchanging financial disclosure and reviewing it
- Asking extra questions on the financial disclosure or missing assets
- Requesting valuations. For example, the family home or family business
- Getting reports, such as advice from a tax accountant or pension actuary
- Preparing an FDR bundle for the private FDR judge containing the relevant information
- Having a pre-FDR meeting with you to discuss strategy and your bottom line
- Making any offers so your spouse and their solicitor know your negotiating position in advance of the private FDR
Instructing Angelique Holm for your financial settlement and private FDR
Angelique Holm and her team are focused on achieving the best financial settlement outcome for you. She balances getting you the best financial deal at a private financial dispute resolution hearing with the costs and litigation risks of going to a final hearing and allowing a judge to decide on what goes into your financial court order. At all times she listens to what you want out of your divorce financial settlement while giving you realistic and constructive legal advice.
For family law advice call Angelique Holm on 0203 488 8620 or email.
info@hopeholm.co.uk or visit our website HopeHolm Family Law.