Sorting out money matters in a divorce with a financial dispute resolution (FDR)

The Family Court System, a newer addition to the judicial system, places a strong emphasis on settlement rather than creating a winner and loser. This approach aims to better resolve disputes, particularly in divorce cases, by encouraging compromise and cooperation between parties. The Financial Dispute Resolution (FDR) hearing is a key part of the Family Court Process, designed to help divorcing couples settle financial disputes without a lengthy trial. This article explains what FDR is, how it works, and how to make the most of this opportunity to reach a fair and amicable settlement.

The court process for sorting our financial matters in a divorce

If you find yourself having to go to Court because you and your ex can’t agree how to divide up the assets, it can be quite a confusing process. Firstly, it’s not called ‘going to court to sort out our assets’. Instead, it’s called a ‘financial remedy’ application. Secondly, you can’t even apply to Court straight away because you must show that you’ve tried to settle your case even before you apply to court.

This is the process:

1. Before you can apply to Court, you first need to attempt mediation. This is the Court setting out its stall from the outset, that unless your case is an emergency, you must first have been to a mediator to try and resolve the dispute. Strictly speaking, an attempt at mediation may simply be limited to you or your ex attending a meeting with a mediator to find out what mediation is about. This is called a Mediation Information and Assessment Meeting or (“MIAM”). Our view is very much that mediation should be considered first before you think about setting foot in a courtroom.
2. Assuming that mediation isn’t successful, you can apply to the Court.
3. Next, you and your ex must provide financial disclosure to one another and the Court. This means completing a Form E Financial statement setting out your financial situation and providing the necessary supporting documentation.
4. 1^st Appointment. This is the 1^st Court hearing and whilst the Judge will not actively be involved in settlement at this stage, they will encourage you and your ex to think about whether mediation is appropriate.
5. FDR – the Judge will actively be involved in trying to assist in settling your case. They will give their view as to how they feel the assets should be divided. The Judge’s view is not binding.
6. Final Hearing – if a settlement cannot be reached, then a new Judge (who hasn’t had any involvement in the case previously) will be appointed. They will listen to the arguments put forward by both sides, listen to cross-examination of each party and then make a final decision that will be binding on the parties.

The FDR process

The FDR hearing is all about trying to agree a settlement. The idea behind this is that if you and your ex can negotiate an agreement at the hearing with the assistance of your solicitors, then there hasn’t been a winner and loser; instead, you’ve reached a pragmatic compromise. It’s felt by the Court that this is preferable in family law disputes because in a lot of cases the parties will have to see each another again, i.e. if they have children.

Therefore, if you and your ex can agree the financial settlement between yourselves in which you’ve both been involved, the idea is that there will be less animosity and ill-feeling going forward.

How this is achieved:

1. Both parties will have had to have put their best offers in writing prior to the hearing. This means that you and your ex know exactly what the other is seeking.
2. The Judge listens to the positions of both parties as put forward by their solicitors or barristers. This means that both sides get to have their views heard. This is of course important for both parties as they want to know that the Judge has heard where they’re coming from.
3. Next, the Judge will review the documentation in the case, i.e. any expert evidence. This means that all relevant evidence is considered.
4. The Judge will then give their non-binding views on what they feel would be a fair split of the assets. This gives the parties the opportunity of a ‘reality check’ on their respective positions.
5. The hearing is then adjourned for an hour or so to allow the parties to discuss the Judge’s views with their respective solicitors or barristers and to then try and negotiate a settlement with the other side.

The key to the above is that the Judge gives their view, not their decision. This is because the Court is not wanting to decide for the parties, but instead to guide them towards the right decision. By the Judge giving their view, this means that the parties can assess their positions compared to what decision a Judge is likely to make if the case cannot settle and must progress to a Final Hearing (as set out above).

Do most cases settle at the FDR?

There’s a lot of claims made by Judges that most cases settle at the FDR, and this is why it’s actively encouraged by the Courts. It must surely be the case that it works then, or the Courts would have done away with the process, wouldn’t they?

Actually, research has shown that only approximately 50% of cases that reach FDR. However, if there are approximately 30,000 financial remedy cases each year, settling 50% of those is a large number.

My ex won’t settle – do I still need to go to an FDR?

Whilst settlement is a laudable aim, when a divorcing couple finds themselves the best part of a year into Court proceedings and having spent tens of thousands of pounds on lawyers, settlement is not always high on the list of priorities for the parties. In many cases they just want the Judge to decide and finalise the case so that they can move on. This was the situation in the recent case of GH v GH where the Judge in the case felt that settlement just wasn’t going to happen and so he said that the FDR could be bypassed.

The Judge’s decision to dispense with the FDR was appealed. The appeal Judge overturned the original Judge’s decision and insisted that an FDR must take place, saying:

‘The FDR (which for these purposes includes the increasingly popular Private 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.’

Cleary, the Judge hadn’t looked at the statistics…

However, the Courts are clear that the FDR is here to stay. Therefore, rather than arguing against the process, it’s preferable to use the process to your advantage and make sure that you get the best result you can.

How to get the most out of the FDR

The main advantage of coming to an agreement at the FDR hearing is that it provides you with certainty. You know what the outcome is and what your share of the assets is going to be.

1. Do your homework: The Judge will listen to arguments from both sides. This means that they are open to being convinced by your argument. If you can show the Judge why your position is fair and reasonable
2. Be realistic: If in your opening offer, you’re asking for everything including the kitchen sink, then you’re unlikely to convince the Judge of your position.
3. Be willing to negotiate: It’s unlikely that the Judge is going to say that your offer is perfect and give you what you’re asking for. Therefore, you’re going to have to negotiate. As such, it’s a good idea to think about not only what your best position is, but what the minimum is that you’d be willing to accept.

There’s a saying that a good negotiation is one where both parties come away unhappy. This is because it means that neither party has got one over on the other.

Private FDR

According to statistics from the Court, it takes an average of 55 weeks for a case to get to the FDR hearing. It is possible to bypass these delays by ‘going private’, and there are various options, such as arbitration and early neutral evaluation

How Belderbos Can Help

As a specialist family solicitors, we have been to our fair share of FDR hearings. If you’re facing an FDR hearing, our experienced team of specialist family solicitors is here to guide you through the process. We can help you understand each step, manage your expectations, and develop a strategy to increase your chances of reaching a fair and amicable settlement. Contact us today to get the expert support you need.