Private FDRs: A Brief Guide
What is an FDR?
In every application for financial remedies the Family Procedure Rules provide for a hearing referred to as a “Financial Dispute Resolution Appointment” (FDR). The purpose of this hearing is to help the parties reach a final settlement of all the issues in the case and so avoid the costs and uncertainty of a contested final hearing. The hearing is conducted on an entirely “without prejudice” basis, so that whatever is said in the course of negotiations or at the hearing itself cannot be relied on by either party in the event of a contested final hearing. For an FDR to be successful the parties must both have given full disclosure of their financial circumstances, and any expert evidence as to the value of assets or liabilities will need to be ready. In advance of the FDR the parties exchange “without prejudice” proposals for settlement. The parties will then appear at the FDR with their legal representatives who will present their respective arguments to the judge in support of their proposals. The judge will then give an indication of his or her view as to the range of likely outcomes in the event of a final hearing and encourage the parties to negotiate in the light of that indication. In the majority of cases this will result in a final settlement of the case. If the parties cannot reach an agreement, the judge will give directions to take the case to a final hearing.
What is a Private FDR?
The parties can choose to opt out of the court’s own FDR and agree to appoint a suitably qualified lawyer of their choice to conduct an FDR instead of a random judge of the court. If the parties wish to do this they can either ask the court to make a suitable order to that effect at the First Directions Appointment, or if they decide to have a private FDR after the order listing a court FDR has been made, they can ask the court to cancel (“vacate”) the court FDR so that a private FDR can take place. It should be understood that the lawyer conducting a private FDR is not a judge and has no power to make a final order or to make an order for directions. His/her role is to facilitate the reaching of an agreement and it will be necessary to return to the court to have that agreement made into a court order. If no agreement is reached, it will be necessary to ask the court to give directions to take the matter to a final hearing. In all other respects, a private FDR is just like a court FDR; it is not a mediation, and the lawyer in the position of “judge” will give a clear indication of the most likely range of possible outcomes.
Why might the parties want to have a private FDR?
- The parties are able to choose their own tribunal. All too often the indications given by judges of the Family Court vary hugely depending on the identity of the Judge, a matter which is entirely outside the control of the parties. It may be that their lawyers are anxious to avoid the risk of unhelpful indications being given by certain judges they do not rate highly, or are particularly keen for an indication to be given by a trusted lawyer with particular expertise in aspects of the case in question.
- The lawyer conducting a private FDR will not have any other cases to deal with on the day. He/she will be able to prepare the case more thoroughly than is often the case with busy judges, and will be able to devote the entire day to one particular case if necessary. He/she may also provide services not usually provided by the court, such as drawing up his/her own schedule of assets to help the parties and/or giving a written indication for the parties, although every case is different and lawyers will differ in the way in which they conduct a private FDR.
- A private FDR can take place in any location agreed by the parties, but will usually be in comfortable offices provided by the lawyers, with plenty of room for the parties and their advisers to have the confidential discussions without which no FDR can be successful. There is likely to be a much calmer and less pressurised atmosphere than at a crowded Family Court, which is obviously more conducive to settlement.
- It is usually possible to arrange a private FDR at relatively short notice, so that the time between First Directions Appointment and FDR is much shorter than it would otherwise be.
- Fixing a private FDR removes the risk of the court FDR being cancelled at the last minute with serious costs consequences to the parties and additional delays in bringing the matter to a conclusion. Very large numbers of cases are now being vacated in this way, sometimes more than once, as the number of judicial appointments have failed to keep pace with the rising demand on judges’ time. Put simply, there are not enough judges to deal with the caseload efficiently, and this is causing unacceptable delays in the family justice system. Many litigants are now fixing private FDRs when a court FDR is vacated by the court at short notice for lack of judicial availability.
Disadvantages of private FDRs
- The parties will have to pay for the services of the lawyer acting as “judge” in a private FDR. Depending on the value or complexity of the case, this may prove to be a very small proportion of the costs incurred on both sides. It should also be remembered that the cost of a cancelled or adjourned FDR is likely to be more than the cost of paying a private FDR “judge”.
- The private FDR “judge” will not be able to make the final order or make any directions order in the event of no agreement being reached. It will be necessary to submit any draft consent order to the court for approval, but this is just a paper exercise which is very unlikely to lead to any difficulty at all, as the District Judge is hardly going to decide that an order approved by a senior lawyer in a neutral position is outside the range of reasonable outcomes. If no agreement is reached it will be necessary to apply to the court for directions, but such directions are rarely contentious and this can be dealt with by submitting a consent order to the court for approval.
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