Private FDR’s pros and cons

Posted: 20 September 2024

Do Private FDR’s offer a better alternative than Court-Based hearings in resolving financial matters?  

A Private FDR is a voluntarily entered into process which can run concurrently with, or take place prior to, financial remedy proceedings within the Court arena.

What is an FDR?

The abbreviated term “FDR” stands for Financial Dispute Resolution Hearing which is a key stage of the financial remedy proceedings.

The first Hearing, known as the “FDA” (First Directions Appointment) is the first Hearing which takes place in financial proceedings. At this Hearing, the focus will be brought to what the issues are, and what directions and information are necessary to have an effective FDR.

The FDR is most commonly the second Hearing that will take place in financial proceedings and the parties. At this Hearing, are expected to attempt to settle through negotiations between themselves, or via their respective representatives.

The matter will be called before the presiding Judge who will hear relevant evidence and will give the parties an “indication”. The indication gives the parties an insight into the likely outcome should the case go all the way to the Final Hearing. The indication can therefore be a very helpful tool should the parties be a way off in their negotiations. At this stage, most cases settle.

Those that do not agree at the FDR will go to a Final Hearing where the Judge will decide the outcome. As a point of note, the Judge who presided over the case at the FDR will not be the same Judge at the Final Hearing because they have already heard limited evidence at the FDR.

So, what is a Private FDR?

Owing to the extremely lengthy delays being faced by the Courts at the present time in listing financial cases, some people are opting to go straight to the FDR Hearing. The same evidence will be completed as if in the Court arena, but there will not be an FDA. Instead, the parties will jointly instruct a chosen Judge to conduct the FDR. Similarly to within the Court arena, the parties will go to the FDR expected to attempt to settle through negotiations and will receive an indication from the Judge which can help the parties to settle. Upon an agreement being reached, this will be drawn up into a legally binding Financial Order which will be filed at the Court for sealing.

The pitfall of a Private FDR is that the indication is not legally binding. Consequently, it is possible that the parties leave without reaching a settlement and then they must resort to the standard Court route. It is not appropriate for every case.

There are many benefits to the Private FDR, however, which are:

• It could result in a huge cost saving by not waiting for lengthy Court delays (the estimated wait time between the FDA and FDR Hearing is 1 year)
• There is a high chance of success
• You have flexibility and control over your case
• The Judge presiding over the case has been chosen and agreed by the parties
• It avoids delays
• The purpose of the FDR is to reach an amicable agreement which is preferable

The disadvantages to the Private FDR are:

• It can be expensive to hire a Judge for the day
• It is voluntarily entered into; you cannot force the other party to cooperate with the Private FDR process
• There is no guarantee that you will come out with an agreement, and so may have to make a Court Application anyway
• It does not suit all cases

If you would like more information to speak to one of our family solicitors, please call on 01245 493959 or send email.