What is a private FDR?
Private FDRs are on the increase. They are increasingly becoming the norm and arguably the default in financial cases. But what exactly is a private FDR and what are the pros and cons?
A private FDR is a replication of a formal Court hearing. The FDR (Financial Dispute Resolution) hearing takes place as part of the traditional Court process for resolving financial issues on divorce. It is usually the second hearing to take place during a case and is arguably the most important. It will take place after all the financial disclosure takes place and disputes about valuation of assets have been (hopefully) resolved. An FDR hearing is entirely “Without Prejudice” meaning that no party is allowed to refer to what took place at any subsequent stage. This allows both sides to put forward proposals and make concessions that they know cannot be used against them later on in the process. At the hearing a Judge will provide their opinion on what they think the correct answer to the case is. They are giving their view on what they think will happen if the case proceeds to a trial. This indication could be in quite general terms or directed at a specific issue in the case.
This opinion is not a judgment and therefore is non-binding. Both sides are free to ignore it if they wish. However, having an authoritative and independent third party provide an evaluation of one’s case is an extremely powerful intervention. It will invariably force parties to focus on the strength and weaknesses of their case together with the risks (and potential costs) of proceeding to trial. Once the indication has been given, both sides are encouraged to negotiate further to see if any differences can be bridged and a deal agreed. This is an extremely effective process. I am not privy to any statistics but anecdotally and based on my own experience, I would say 70% to 80% of cases settle at this stage, or shortly afterwards.
A private FDR is exactly the same process. However, rather than waiting your turn for a Judge to be provided to you by the Court system, parties elect to instruct their own Judge. This is usually a senior barrister/solicitor with expertise in dealing with financial cases. The advantages of this are numerous:
1) Time – a Judge conducting an FDR in the Court system will, in all likelihood, be dealing with several other cases on that day. It is common to be granted a slot of around 60 minutes. During this time the Judge is expected to have read the papers (under the rules a Court bundle is allowed to be up to 350 pages long),consider any position statements that have been filed in advance, hear from the parties in person and then consider and deliver an indication. I am frequently in awe at how Judges can perform their duties in such circumstances. A private FDR judge on the other hand will have blocked out the entire day to focus entirely on this case. This means that they can afford to give the case the time and consideration that it deserves;
2) Environment – the facilities provided by the Court system are rarely conducive to assist discussions. There are no allocated rooms meaning it is often a lottery as to whether any kind of private meeting space can be secured. The Courts are busy and understaffed and if you are not able to secure a private conference room(assuming such rooms are even provided), parties are forced to sit in crowded and poorly ventilated public areas which can often have the feel of an A&E waiting room. A private FDR will take place at an agreed venue (usually a barrister’s chambers), where each side will have a guaranteed private room that is quiet, has basic facilities for tea/coffee and lunch (a not unimportant consideration if you are going to be negotiating all day) and a serviceable Wi-Fi connection;
3) The Judge – with a private FDR the parties select their Judge and therefore can ensure that their tribunal is best suited to their case and is a specialist in the area. The range of available of Judges is enormous ranging all the way from retired Court of Appeal justices to more junior barristers and lawyers. Many are keen to expand their practice in this area which means that it is often possible to get exceptionally good lawyers for very reasonable prices;
4) Flexibility and convenience – a Court FDR will take place on a date and time decided by the listing office. While they are sometimes sympathetic to the parties’ availability this cannot be guaranteed given they are being forced to juggle scheduling hundreds if not thousands of other cases. There is, unfortunately a shortage of Judges meaning that I have arrived at Court only to be told on the day that there is no one available to hear it; sadly, this is becoming an increasingly common occurrence. With a private FDR you have the flexibility to schedule it on a date that suits everybody with a guarantee that you will have a Judge available to deal with the case;
5) Process – the only way to get a Court FDR is to issue a formal application for a financial remedy. Understandably, many people do not wish to do this as they prefer to deal with things voluntarily. However, even in these cases it can be possible to get stuck and therefore having a neutral evaluation by way of a private FDR can really help to break the deadlock. Equally, just because you are in a Court process already does not mean you cannot have a private FDR. Judges are extremely supportive of individuals dispensing with the Court FDR on the basis they will attend one privately. This helps reduce the pressures on the Court system;
6) The client experience – all of the above factors coalesce to make a much better experience for the client. Ultimately the FDR is about them. It is a hugely important but often stressful and draining day where they are being expected to make far reaching and life changing decisions. If this is done in an environment where they feel supported and that their case has been given individual and tailored attention, then this only helps to put them in the right frame of mind to approach the day.
So, are there any downsides to a private FDR? The only real disadvantage is cost. For a private FDR there is a fee for instructing the Judge whereas the Court will provide one for free. On balance, I would say that the upsides as set out above more than offset this. Ultimately it can impact a client far more both in terms of financial and emotional cost for a case not to settle and therefore a private FDR is well worth the investment, in my view. This cost (which is usually shared equally) can even be spun as another plus point as it encourages both sides to feel additionally invested in the process.
In many ways, the rise of the private FDR, despite all its advantages is regrettable. They are largely a symptom of the chronic underfunding of our Court system. This has led to the scenario where it is now preferable to pay for something privately that should be offered for free by the state. While the legal profession deserves credit for arriving at a solution that benefits their clients in the meantime, I do not believe that we should lose sight of that fact.
