When divorcing, resolving financial matters can be one of the most stressful and complex aspects of the process. Whether you are dealing with property, pensions, or ongoing financial support, reaching an agreement with your soon-to-be ex-spouse can be very challenging – especially when emotions are running high. One key decision that many separating spouses face, when dealing with such matters, is whether to issue contested financial remedy proceedings and attend a court-led Financial Dispute Resolution hearing (FDR) or opt for a private FDR. Both routes aim to help reach an agreement in respect of the financial issues separating them, without the need to go to a contested final hearing where ultimately a judge will make the crucial decisions for them. FDRs and Private FDRs differ significantly in terms of cost, speed, flexibility, and the experience for the separating spouses.
What is an FDR?
An FDR is a structured hearing, guided by a judge, to help separating spouses reach a financial agreement. It is often compared to mediation, but with a judge rather than a mediator. The FDR usually follows the financial disclosure process, and it is designed to encourage a settlement without needing to attend a contested final hearing. FDRs are held on a without prejudice basis, meaning that the judge at any future final hearing cannot know what has, or has not, been said in the courtroom. This allows both spouses to make certain concessions in an effort to reach an agreement. FDRs and Private FDRs both share the same goal of guiding the parties to reach an agreement, but the experience of each can be very different.
Court-led FDR
A court-led FDR is usually the second hearing within formal contested financial remedy proceedings. It will usually follow the first directions appointment (the FDA), and by the time the court process has reached the FDR stage they will have a full understanding of the financial landscape of their case. Therefore, the parties can genuinely attempt to reach an agreement in respect of the finances.
Naturally, there are pros and cons of a court-led FDR, as set out below:
Pros:
- Although financial court proceedings are expensive in most cases, parties do not pay for the judge at the FDR. The whole court process, from application through to resolution, is covered by the initial application fee (or subsequent application fees).The parties will still need to pay for legal representation or expert evidence.
- The court-led FDR is legally integrated within the court process of England and Wales. There doesn’t need to be separate arrangements made for the hearing. The court will do the leg-work in fixing a date and venue for the hearing.
- There is a clear-cut directions following a court-led FDR. If the parties cannot reach an agreement at the hearing, the court will set out directions to take the matter (usually) to a final hearing.
Cons:
- Due to court backlogs, many separating parties are finding themselves waiting months on end for a hearing date.
- Arguably, given how busy the court timetable is, parties might think that the judges dealing with their FDR might be rushed, or might not be able to giver their full time and attention to the matter before them.
- The scheduling of court-led FDRs in not flexible. Often, the parties are given a date for the hearing and they need to stick to it. If the parties have pre-arranged holidays, or other commitments, they may be anxious to adjourn the FDR given the delays in receiving a relisted date.
- Family court proceedings are generally private affairs. However, a court-led FDR will still require both parties attending the court building (unless heard remotely) and this lack of discretion may causes issues for some separating spouses if they do not what to be in the public eye.
What is a Private FDR
A private FDR replicates the court process, but takes place outside of the court system. Both parties agree to instruct a private judge (usually a retired judge, a barrister, or solicitor) to facilitate the hearing. As with court-led FDRs, there are some pros and cons to this way of dealing with the FDR:
Pros
- Usually, parties can schedule a private FDR quickly – often within a few weeks of deciding this is route they wish to take.
- The parties will also be able to agree on their choice of judge. As such, if their case has niche facts, they can agree to instruct a suitable judge who has experience of similar cases.
- Usually, the private FDR judge will have more time to prepare, and hear, the matter than a court-led FDR judge. Often, court-led FDRs are limited to one hour of court time, whereas a Private FDR can take ‘as long as it takes’ in some cases.
- A private FDR is, as the name suggests, more private. This can provide more discretion to those spouses who may wish to keep matters out of the public eye.
- A private FDR is also more flexible. The parties can choose the date, venue, and format (i.e. in-person or remote).
Cons
- The parties pay the Private FDR judge’s fee. These fees can often be into the thousands of pounds per day.
- If matters cannot be agreed at the Private FDR, the parties may need to still take matters through the formal court process.
If budget allows, and parties value speed, discretion, and flexibility, then a private FDR is often the preferred option. That said, any type of FDR will only assist the parties in reaching an agreement if they are both willing to negotiate. If costs are a concern, and the parties are already deep in the court-led process, a court-led FDR may provide a constructive way forward in reaching an agreement.
In either case, the goal of the FDR is the same; to reach a fair, mutually acceptable agreement, without the stress, time, and cost of a contested final hearing.
