Settlement of financial claims – without parties engaging in full-blown financial remedy proceedings – is often a priority in divorce cases. At Brookman we use a range of tactics and alternative dispute resolution methods to find common ground between our clients and their estranged spouses. Often we succeed in finding agreement in cases where the spouses at first appear to have irreconcilable differences. Settlements are also positively encouraged by the courts. Financial Dispute Resolution Hearings (FDRs) are a key part of this approach.
The purpose of the FDR is to allow couples to get an objective insight into what is likely to be the eventual outcome of any financial remedy proceedings. The hope is that an injection of realism into proceedings will concentrate minds and facilitate settlement.
What are the rules for FDRs?
The Family Procedure Rules state that
“the court must direct that the case be referred to an FDR appointment unless… there are exceptional reasons which make a referral to an FDR appointment inappropriate”.
We answer some FAQs about FDRs here.
GH v GH (2024) – FDRs are rarely ignored
The essence of FDRs was distilled into a short judgment by The Hon Mr Justice Peel in the case of GH v GH [2024] EWFC 2547 in which he made clear that FDRs should never be dispensed with lightly. The factual background to the case need not concern us here. However from a procedural point of view Peel J had been asked to overturn a decision by the lower court judge to dispense with the FDR in the case. An order like this, enabling the parties to go straight to a full financial remedy hearing, would certainly appear to disregard the critical role of FDRs in streamlining and reducing financial remedy trials we have described above.
So why did the lower court feel the FDR was unnecessary?
The underlying facts of the case have not been reported so we only have Peel J’s statement of the lower judges reasoning to guide us. The reasoning appears to have been based on the following:
- There was an ongoing factual dispute about the wife’s earning capacity
- The wife’s overall position was not clear enough for the FDR process to succeed
We are slightly in the dark as to the wife’s position was unclear and why its unsettled nature led the lower court judge to make the order they did. However Peel J had no hesitation in reinstating the requirement for an FDR.
In Peel J’s opinion the exceptionality referred to in the Family proceedings Rules mentioned above needs no ‘no gloss or interpretation’ He stated that the value of FDRs has been proved time and again. Judges can look behind the ongoing litigation and posturing of the parties and give a clear, robust view. The FDR judge is there to tell the parties if their proposals are sound or devoid of merit, or if particular points or arguments are or are not likely to find favour at trial.
Where, as here, financial matters are unclear, dispensing with the FDR entirely is not the appropriate course. Judges at the FDR are not required to determine issues. Rather they are asked to express a view as to how financial issues appear on the available evidence and indicate how relevant they are.
Comment
We don’t come across orders to dispense with FDRs frequently and this clear steer by Peel J – the National Lead Judge of the Financial Remedies Court – would suggest such decisions will be even less common in future In practice FDRs serve an extremely useful purpose, increasingly so when family remedy courts are stretched, and trial dates are hard to come by. There is significant anecdotal evidence that FDRs facilitate settlement in many cases – not just in straightforward cases but in complex cases as well.
We encourage constructive settlements and regularly deploy effective methods of ADR such as Early Neutral Evaluation. We have successfully settled divorces where the parties appear too far apart at the outset to reach any kind of out of court agreement. It is of note that in GH v GH, Peel J. highlighted that he was unaware of any attempt at Non Court Dispute Resolution, or of the parties attending round table meetings, or exchanging offers. This made the need for an FDR more urgent.