Understanding financial dispute resolution hearings

On divorce or the dissolution of a civil partnership, both parties are entitled to a fair settlement based on their respective resources. If the parties cannot agree terms together it may be necessary for court proceedings to be issued to ensure that a settlement is reached. The court proceedings are called Financial Remedy Proceedings.

The Financial Dispute Resolution Appointment, also called FDR Hearing, is usually the second stage of the three-stage process in cases in which the Court is dealing with an application for financial remedy. Sometimes additional hearings are needed to deal with interim issues such as maintenance and legal services payment orders.

Stage 1: Information gathering

The first hearing, which is called a First Directions Appointment, is used to ensure that the parties and the Court have all the relevant information and documents they need to reach a solution, so that by the time of the Financial Dispute Resolution Hearing, all relevant information should be available and key issues identified. This enables the parties to move forward to negotiations.

Stage 2: Negotiation

The parties should subsequently be able to look at the substantive merits of the case and hopefully reach a settlement at an FDR Hearing. If the parties are unable to reach a solution together, the court will assist in the negotiation process.

Stage 3: Final Decision

If the parties cannot reach a solution, the court can impose an outcome at a Final Hearing.

Learn more about financial settlements and the financial remedy process.

What is the purpose of the FDR Hearing?

The FDR Hearing presents an excellent opportunity to reach a financial settlement without the costs and delay of proceeding to a Final Hearing.

The parties are expected to make offers of settlement prior to the hearing and the Judge will give their view of the case at to what they regard as a fair and reasonable settlement. This process encourages the parties to reach settlement by hearing an independent view on the merits of the case.

Many cases settle at the FDR Hearing. Even if that is not possible, the process may assist by narrowing the issues between the parties.

Making an offer

The offers which are made can be either open or on a without prejudice basis. Ordinarily, the Court is not allowed to be aware of without prejudice offers. However, FDR Hearings are unusual in that the Court is entitled to see all offers including any which are without prejudice. The importance of a without prejudice offer is that the offer cannot be made known to the Court at other hearings including the Final Hearing if a settlement cannot be reached. Therefore, a party may be willing to be more generous in their without prejudice offer to try to reach a settlement at the FDR Hearing and their open position at the Final Hearing may be less generous to the other party.

If the parties have a willingness to negotiate and compromise, this is a good opportunity to reach a final settlement.

What happens at the FDR hearing?

Normally an FDR Hearing is attended at Court in person although in some cases the Court may list the hearing for a remote video hearing. It is important that both parties attend with their legal representatives if they have one.

The Judge will have received a bundle of documents in advance of the hearing and details of the offers which have been made. The lawyers for each party will usually prepare a case summary or position statement which sets out the background and reasoning behind their offer.

The Judge will read the position statement and any other relevant documents. There is an opportunity for the legal representatives to make verbal submissions to the Judge in support of their position. If unrepresented, the party will make their own verbal submissions. The Judge does not hear sworn evidence which is usually reserved for the Final Hearing.

The Judge will consider the merits of the case, and the offers made and will give their view of what the issues are, how they might be addressed, and what would be fair and reasonable in the circumstances of the case. In most cases, the Judge will give the parties a clear indication of what the outcome should be. The Judge will consider see circumstances of the case and apply the law set out in the relevant legislation and primarily the factors set out in section 25 of the Matrimonial Causes Act 1973.

The parties and their representatives are given time at Court to consider the Judge’s view and for that purpose you leave the Court room. There are further discussions and negotiations but at this point the Judge has not finished with the FDR Hearing. After those further discussions, the hearing will resume before the Judge who will be updated as to whether it has been possible to reach settlement and the extent to which the parties have changed their offers.

The view of the Judge who deals with the FDR Hearing is not binding on the parties, and there is no obligation to settle. However, the majority of cases do settle as most parties are keen to reach a resolution.

If your case does not settle, the Judge who deals with the FDR Hearing will not be permitted to deal with the case at a Final Hearing. In fact, the views of the FDR Judge cannot be referred to at future hearings. It is important to understand that a Judge has a discretion. The Judge dealing with the Final Hearing may take a different view.

Outcomes at the FDR

Where a case settles, and there is sufficient time, a draft consent order will be prepared and hopefully the terms of it agreed by the parties. The draft order is then presented to the Judge for approval on the same day.

In some cases, there is insufficient time to prepare the draft order, and the parties agree to sign a document called “heads of terms” which is a summary of the proposed agreement, but it is not approved by the Judge in the form of a consent order. The consent order is normally filed at Court soon afterwards and usually approved by the same Judge who heard the FDR Hearing.

If the FDR Hearing does not result in a settlement, the Judge can adjourn it if there is good reason to believe that a settlement can be reached by having a further FDR Hearing, although this is rare.

If a settlement cannot be reached, the Judge is likely to list the case for a Final Hearing.

The Judge normally takes the opportunity to address all parties as to the cost implications of not reaching an agreement. Cost estimates are available to the Court and the parties, so that everyone is clear as to the additional costs which will be incurred if they do not reach a settlement. In cases where a settlement is not reached, the parties are encouraged to continue to negotiate and settle the case after the FDR Hearing to avoid additional costs being incurred. The parties often subsequently reflect on what has happened at the FDR, and the views of the Judge, and they may well settle after that reflection.

Learn more about the importance of obtaining a financial consent order.

Is my case ready for an FDR?

Hopefully all the information and documents will be available so you can proceed with an effective FDR Hearing. However, there may be missing information or documents, and it is important to consider the importance and overall impact which this has. For instance, it may be possible to have an effective FDR Hearing even if some minor information or documents are missing and there are methods to address this situation.

If there is something fundamental missing, which would render the FDR Hearing meaningless, you should take legal advice as to whether the hearing should be adjourned, and you should address how the problem should be dealt with.

How do you prepare for an FDR?

In advance of the FDR Hearing the Court requires that financial information be updated and exchanged with the other party. You should discuss with your legal advisor the merits of your case and take advice on the best approach and proposals to be made. It is important that any relevant documents are produced in advance, and you should avoid producing documents on the day of the hearing.

You need not prepare to give evidence or be cross-examined at the FDR because this will not happen.

You will be expected to attend Court early, usually at least one hour before the hearing is to start so that everyone is prepared, and last-minute discussions can take place prior to the hearing. FDR Hearings can be time consuming, and you should ensure you are free for the rest of the day and make appropriate arrangements including work and childcare commitments.

The Court may not have catering facilities so take water and some snacks. If you have someone attend Court to give you support, they will not be allowed into the Court room.

If it is a video hearing, make sure that you are in a quiet and undisturbed place. You should have no one in the room with you.

What is a Private FDR?

If both parties agree, you can arrange what is called a Private FDR. This does not take place in Court but at a private venue such as a Solicitor’s office or Barrister’s Chambers. The person who hears the Private FDR is appointed by agreement of both parties and is usually a senior Barrister or Solicitor with expertise in family finance. They will charge a fee for their services which is paid by the parties. Their role is the same as the Judge in Court.

The advantages of a private FDR are that you know the hearing will take place at a time and venue which is agreed and which may take place much sooner than waiting for a court hearing date. You can ensure the person hearing the Private FDR has had sufficient time to read all of the relevant papers and has no other cases to deal with on the day of the hearing. Often in Court the Judge must deal with several cases on the same day and you are not guaranteed when the hearing will start. You also avoid the possibility that the judge in Court is not available because a case has gone part heard or lack of judicial availability.

Costs of the FDR

There is no additional court fee payable for the Court to deal with the FDR Hearing. The expense is the cost of the lawyers preparing for and attending the hearing (and the cost of the Private FDR judge if that option is chosen).

The costs will vary depending on the length of your hearing and how long you spend at Court, whether you instruct a Barrister, and the seniority and expertise (and therefore the charges) of the Barrister and Solicitor dealing with your case. An estimate can and will be provided to you for the costs of the FDR Hearing, but this depends on the circumstances of your case. Normally both the Solicitor and Barrister attend the FDR Hearing with you.

Concluding thoughts

The FDR Hearing provides a unique opportunity to settle financial matters. Expert legal advice and suitable preparation will greatly assist, as will a sensible offer supported by a well-structured and reasoned position statement.