The Financial Dispute Resolution hearing – or FDR – is a key stage in financial remedy proceedings, the court process used when the divorcing couple are unable to agree financial matters between themselves. When one side applies for a financial order in divorce proceedings the application initiates a clearly defined financial remedy timetable as follows:
- Appointment with family mediator – Unless you are exempt, you must both attend a Mediation Information and Assessment Meeting (MIAM) before the family court will hear your financial remedy application. This is to see if any non-court approaches may lead to a resolution of your financial matters
- Application for a financial order using Form A
- Exchange of detailed financial information using Form E
- First court appointment – the First Directions Appointment where the court reviews the information that has been exchanged and sets a timetable for the parties to follow to move things forward
- Financial Dispute Resolution (FDR) hearing – as we discuss in detail below the FDR is a hearing before a judge aimed at finding a settlement. Where appropriate the judge will indicate what a final ruling might look like as a way of encouraging settlement
- Final Hearing – If the FDR does not result in an overall agreement there is a final hearing with a different judge from the one who dealt with the FDR. That judge will listen to both sides and make a final order
Here we discuss the FDR, the second stage in the court process when an application for financial relief has been made. With the emphasis on negotiation, the FDR is designed to focus minds on outstanding financial matters. Often it provides an indispensable stepping-stone towards a binding agreement that does away with the need for a further, final hearing where a judge decides the outcome of the financial claim.
It is important that you think carefully about the settlement you want to reach before you attend the FDR, and you discuss this with your solicitor or barrister. Think about what sort of outcome you could live with in the years ahead and what sort of result you would find unacceptable. You should have thought carefully about what you are seeking in terms of a settlement. In particular:
- How will the cost of future living arrangements for you and any children be met?
- Is one spouse seeking maintenance. If so, for how long?
- How are pensions to be dealt with? Is a pension sharing order appropriate, for example?
- How do you want other assets to be split?
Remember that by the time the FDR comes around full financial disclosure by both sides will have taken place. Assets, such as pensions, should have been valued. The FDR judge will expect to be provided with a clear picture of your financial situation.
What Happens at Court?
The FDR is all about moving any financial disputes forward in the search for agreement.
The FDR appointment is usually scheduled for an hour. But you should have plenty of time to discuss any concerns with your legal advisor before and after the hearing. If both parties have instructed lawyers, they will usually try to find a negotiated agreement based on their clients’ instructions before going before the judge. Each side should formulate an offer of settlement so that the judge can give their opinion on the reasonableness of each side’s position.
Offers at FDRs are made on a ‘without prejudice’ basis. This means that, while the FDR judge may see what each side is offering, if the FDR is unsuccessful, and subsequent negotiations fail, the offer will not be revealed at any final hearing. (The FDR judge will not play any role in this final hearing, and any indication the FDR judge gave about what a reasonable outcome might look like cannot be referred to.)
Can the Judge Make a Final Decision at the FDR?
No. The FDR is a preliminary hearing held before the final financial hearing. However, the judge will have access to all the financial evidence and so will be in a position to predict what the outcome could be. He or she will provide an opinion (an ‘indication’) of what a final order might look like and impress upon the parties the advantages of reaching a negotiated settlement. Parties are also usually reminded of the unpredictability of final hearings where a judge decides the case alone.
What Happens if an Agreement is Reached?
If you are happy with the proposals, your solicitor or barrister (if you have instructed one) together with your husband or wife’s advisor will prepare a draft Consent Order for the judge. It is often possible to have this finalised and approved by the judge at the FDR.
If there is no Agreement is a Final Hearing Unavoidable?
If you can’t reach an agreement at the FDR, the judge will set a date for a final hearing – usually within a few months. So that parties are not prejudiced by their conduct at the FDR, a different judge will always be allocated to the case for the final hearing.
Failure to reach agreement at the FDR does not mean attempts to finalise matters should end. Negotiations will usually continue. If anything there should be a renewed impetus to agree matters after taking into account the FDR judge’s views. His or her opinions on the probable outcome at a final hearing should carry real weight between the parties and encourage settlement.
What if I Think My Spouse Has Not Made Full Disclosure of Financial Assets?
If you believe there has not been full and frank disclosure you can raise this at the FDR. It’s also possible to apply to delay the FDR if you think the non-disclosure will undermine the usefulness of the FDR. At the FDR it is always open to the judge to make directions in relation to further disclosure before a final hearing if he or she thinks it is appropriate.
Can I Avoid the FDR?
While FDRs are a constructive, structured way for couples to resolve financial matters when they divorce, sometimes one or both spouses are reluctant to attend. Can they be avoided? As we’ll see, in certain, limited, circumstances they may be.
One way to avoid an FDR is to reach an out of court agreement. While this will still need to be formalised in a Consent Order there will be no need for any further or final hearing.
FDRs may also be dispensed with if one side can show an exceptional reason why they would be inappropriate – although this is rare.
Finally court FDRs can be replaced by private meetings between eth parties aimed at reaching a settlement. Private FDRs like this are encouraged by the courts. In fact they are an increasingly common feature of financial remedy proceedings, given the publicity that now surrounds financial remedy hearings and the difficulty in securing an FDR hearing within a reasonable timeframe.