The Rise of Private Financial Dispute Resolution Hearings

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By Tracey Dargan, Partner and Head of Divorce and Family Law

Whilst some hearings in the Family Courts are able to proceed remotely due to the Covid 19 outbreak it is unsurprising that it is not possible for most if not all, non-urgent hearings to be heard. In the light of this, it has become common practice for legal advisers to try to agree the terms of certain orders in writing as far as possible which can then be submitted to the court to avoid a physical hearing. Where it is usually necessary however, to attend the court for the purpose of a Financial Dispute Resolution hearing, the guidance from Mostyn J, Senior Judge of the Financial Remedies Unit, is that parties should be encouraged to have their Financial Dispute Resolution hearings (FDRs) conducted privately, and that these hearings can, and should, be carried out remotely.

Our offices and most barristers’ chambers can facilitate remote FDRs. This will be key in the days to come given the direction that physical hearings should now only take place if unavoidable.

A Private FDR (PFDR) is where the parties pay for a financial remedy specialist (whether a solicitor, barrister, or judge) to act as a PFDR Judge. The hearing will take place at a time convenient to the parties with either half or a full day set aside to solely consider the issues of each case. This is very different from the experience of being in a very long court list where judges regularly have to consider several cases on the same day. The aim of PFDRs is the same as court based FDRs – to enable the parties to reach a settlement without incurring further costs. If an agreement can be reached, this can be settled into an order to be approved by the court.

A judge conducting a PFDR will thoroughly read and consider the papers provided and then hear arguments from the parties’ representatives, before giving a neutral evaluation of the likely outcome should the matter proceed to a Final Hearing. The majority of cases settle at a court FDR however, PFDRs are known to have an even higher success rate given the expertise of the judge chosen by the parties and the time which can be dedicated to each matter.

If all parties agree that the matter ought to proceed as an PFDR, a consent order will need to be provided to the court confirming this. The parties will also need to ensure that full and frank disclosure is provided in advance to enable the parties the best prospect of settling the case.

The Process

Choosing a PFDR Judge

No additional qualification is required for a barrister, solicitor or judge to act as a PFDR Judge. It will be important to consider with your solicitor the level of expertise needed depending on the type and complexity of the case. The benefit is that you can choose a judge who specializes in certain matters, such as third party claims or who has a good knowledge of company valuations and shares, which you are unable to do within the court process. The parties will also want to consider the costs of the judge to be appointed which should be proportionate to the assets in the case. In most cases the cost of appointment is shared between the parties and is likely to be a modest percentage of the overall costs.

The PFDR Contract

Once the parties have agreed on the appointment of a particular PFDR Judge, a contract will be drawn up noting the privileged and confidential nature of such a hearing. It is important to note that, as with court-based FDRs, these hearings are without prejudice and the views of the judge cannot be relied upon at a further hearing.

The benefits

The main benefit of having an FDR conducted privately is the speed and transparency of the process. PFDRs can also be issue led and are ideal where parties have reached agreement in some areas but not others. You can choose your judge, choose to have the hearing conducted remotely (which is currently necessary) and at a time to suit you, without the long wait and crowded waiting rooms at court. You will also have the benefit of a judge whose sole focus for the day is your case.

In a time where courts are going to be under additional strain, PFDRs present an excellent alternative.

If you need advice or assistance then please contact our Partner and Head of Divorce and Family, Tracey Dargan.

Please note the contents of this blog are given for information only and must not be relied upon. Legal advice should always be sought in relation to specific circumstances.