Guide to Private Financial Dispute Resolutions (private FDRs)

In recent years, and particularly through the pandemic, the challenges for couples have increased, and there has been an escalation in separation proceedings. Processes that offer more ease and less cost to separating couples have been increasing in popularity. Private FDRs are one of those processes. 

What is a private FDR?

A traditional Financial Dispute Resolution (FDR) hearing is a normal part of the legal separation process to deal with the division of financial resources. Usually, the parties will apply to the court for a financial order, and a date will be set for an FDR hearing.

A private FDR is exactly what the name suggests. The separating couple takes the process into their own hands rather than waiting for a hearing to be scheduled and an order to be made by the court. Instead, they privately appoint and pay for a legal expert (whether an experienced judge, barrister or solicitor) to independently adjudicate the case outside of court and to provide an assessment of the likely outcome (financial aspects).  

Why have a private FDR?

There are various reasons why a private FDR is a preferable route for separating couples.

• It offers an alternative to lengthier, more costly and more stressful court hearings.
• It offers greater privacy which is often desired in relation to financial matters.
• It is far less formal and will happen at an out-of-court venue like a hotel conference room or a barristers’ chambers, therefore, allowing the parties to feel more relaxed.
• An independently appointed legal expert is likely to have more expertise in the financial areas relevant to the case than the appointed judge. 
• Joint decision-making in relation to the legal expert, and joint payment of the required fees, can move couples closer to achieving agreement and settlement.
• The legal expert is likely to have greater time and attention for the specifics of the case than a busy judge in the Family Court.
• The process can be more empowering for separating couples as they are in control, and any agreement reached will be an independent one on their own terms.

When can a private FDR take place?

A private FDR can take place in the presence or absence of ongoing court proceedings for divorce or dissolution. It can be arranged before proceedings have even been issued, proving very cost-effective if agreement is reached early on. If court proceedings are ongoing, an adjournment must be applied for until the private FDR takes place. 

What to expect from a private FDR

A private FDR will usually consist of the following steps:

• Advance preparation: Once the legal expert has been appointed and the date set, the parties will prepare for the private hearing. Normally, without prejudice offers will be exchanged in advance of the date to establish each side’s attitude to the case. Position statements including the case facts, relevant financial information, agreed points, and points of dispute will be prepared, along with a bundle of key documents, for the legal expert.
• Day of the private hearing: On the day, submissions will be made by the representatives on each side and, considering those along with the documents, the legal expert will give an indication or opinion on the case.  With this indication, the parties are in a better position to negotiate. A series of without-prejudice offers are likely to be exchanged in an effort to settle the matter. This may all happen on the day of the private hearing with the hope that settlement is reached, or it may continue in the days that follow (often in writing). 
• Agreement reached: When an agreement is reached between the parties, the heads of agreement can be taken to court, set out formally in a court order and approved by a judge. All else being equal, the separating couple can move ahead for the final order of divorce or dissolution. 
• No agreement reached: When agreement cannot be reached, and the parties have not yet issued formal court proceedings, they may then decide to do so. Where court proceedings have been issued, the parties will have to return to the court for directions on how next to proceed and to set a date for the final contested hearing. 

Costings

Given the fact that private FDRs decrease the time spent involved in legal proceedings, they are a cost-effective process. When negotiating, parties should always take into account the additional financial resources (often in the thousands, or sometimes tens of thousands of pounds) that will be wasted if a matter goes to a full contested hearing