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High Court emphasises importance of Financial Dispute Resolution appointments

October 19, 2024

It goes without saying that it is far better to resolve a financial remedies dispute on divorce by agreement, rather than by going through lengthy and expensive contested court proceedings.

And that fact is recognised by the rules governing the procedure on financial remedy applications.

A fundamental part of the procedure is the ‘Financial Dispute Resolution’ appointment, or ‘FDR’ for short.

What is an FDR?

An FDR is a hearing within a financial remedy application. Its purpose is to see whether it is possible for the parties to settle the matter by agreement, with the help of the judge, who will give their view on the likely outcome of the case.

To this end, the applicant must, not less than 7 days before the FDR, file with the court details of all offers and proposals made in the case, and responses to them, including offers, proposals and responses made without prejudice. (Without prejudice proposals are not normally seen by the court, unless they are accepted.)

And when the parties attend the FDR they are required to use their best endeavours to reach agreement on the matters in issue between them.

If agreement is reached, then the court may make a consent order, giving effect to the agreement.

If agreement is not reached, then the proceedings will continue to a final, contested, hearing. Note that the judge hearing the FDR is not allowed to take any further part in the proceedings, which means that the judge who deals with the final hearing will not be aware of any without prejudice proposals made in the case.

All financial remedy applications must be referred to an FDR, unless there are exceptional reasons which make a referral to a FDR appointment inappropriate.

And a recent case has indicated just how important FDRs are, and how unlikely it is that there will be exceptional reasons to dispense with an FDR.

The case concerned an appeal against a decision by the court to dispense with an FDR, and proceed straight to a final hearing. The judge had done this as there was a dispute over the wife’s earning capacity, and they felt that the wife’s position had not crystallised so as to enable the FDR process to be successful.

Hearing the appeal, Mr Justice Peel said this:

“The FDR … is an integral part of the court process. Its value has been proved time and again. Its without prejudice status allows the judge to look behind the litigation posturing which is so familiar in these cases and give clear, robust views. Anecdotally, it facilitates settlement in a significant number of cases … In my personal experience, even the most intractable case can yield to settlement at the FDR.”

He went on:

“It is very hard to envisage a situation where the FDR should be dispensed with. Perhaps if one party has not engaged at all, including not attending court hearings, and has stated that they will not attend the FDR. No doubt there are other situations which might justify proceeding from First Appointment to final hearing without the FDR. But these will be very few and far between.”

In this case he considered that the judge should not have dispensed with the FDR. There was no impediment to the parties making offers, or to the court giving a firm steer. No attempt had been made by the parties to settle the matter out of court, nor had they even exchanged offers, all of which made the need for an FDR all the more pressing.

Accordingly, he directed that the parties attend an FDR.

You can read Mr Justice Peel’s judgment here.

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