Private Financial Dispute Resolution (FDR) for Divorce

Private FDR helps divorcing couples reach a financial settlement

Our specialist divorce lawyers are keen to ensure our divorcing clients achieve cost-effective outcomes as quickly as possible, with minimal conflict, enabling them to get on with their lives.  One of the ways we help our clients is through private financial dispute resolution (FDR).

The divorce team at Osbornes are highly experienced in helping clients resolve matters on divorce in non-court settings, and we have been seeing a rise in private FDR. 

What is a divorce financial dispute resolution (FDR) hearing?

A Divorce Financial Dispute Resolution (FDR) hearing takes place in a family court as part of divorce proceedings, specifically related to the financial settlement agreement. It is a form of alternative dispute resolution (ADR) designed to help divorcing couples resolve their financial issues without resorting to trial.

During an FDR hearing, a neutral third-party, usually a family law judge, reviews the disputed financial issues between the divorcing parties. These include the division of the family home, maintenance payments and child support. The judge listens to arguments from both parties, considers the evidence and then provides recommendations or suggestions to facilitate resolution. The judge does not make a legally binding decision but facilitates the negotiation so that both parties can agree to a settlement. If an agreement cannot be reached during the FDR hearing, the case may proceed to trial, where a judge will make a final decision.

FDR hearings are often considered a less formal, less adversarial, and more cost-effective approach to resolving financial disputes in divorce cases compared to going to trial. They offer an opportunity for the parties to voice their concerns and work towards a mutually acceptable resolution with the guidance of a neutral third party.

What is private FDR?

Traditionally, a divorce financial settlement is dealt with either by mutual agreement between the parties or by application to the family court. 

The court process includes disclosure of the parties’ respective financial positions, and after a first hearing, dealing with what reports etc. are required, or former disclosures. This is then followed by an FDR hearing which focuses on trying to achieve a settlement. If that fails, a final hearing will follow and the judge will determine the final outcome.

A private FDR with an independent and impartial FDR judge is a simple and voluntary alternative to this.  

As a former president of the Family Division succinctly described it: 

“The parties pay for a financial remedy specialist to act as a private FDR judge. That person may be a solicitor, barrister or retired judge… The private FDR takes place at a time convenient to the parties, usually in solicitors’ offices or barristers’ chambers, and a full day is normally set aside to maximise the prospects of settlement. It takes the place of the in-court FDR.”

So, whether or not you’re already going down the court process, you have the option of agreeing to a private FDR hearing. It is confidential and without prejudice, and enables discussions and negotiations to take place freely with the judge’s assistance.

• If a settlement is reached (and usually, it is), this will be drawn up in the form of a court order and submitted to the court for approval. 
• Where an agreement cannot be reached, it will become necessary for a date for a final hearing to be set – though the parties can still work towards trying to resolve the issues ahead of it.

However, we make it clear to our clients that there is the potential for a lengthy delay before there is a court final hearing, given the lengthy backlog currently affecting the family courts, and therefore we, as a team with the clients, take a constructive approach to try, as far as possible, to avoid a court final hearing.

How much does private FDR cost?

Although there is a cost involved – mainly in respect of the private FDR judge’s fees, which are normally split between the parties – our clients find that the advantages of a private FDR far outweigh this, and the costs are not, overall, more expensive because the case is concluded far earlier than in the court process. 

What are the benefits of private FDR?

A private FDR offers clients a number of benefits, including:

1. The private FDR judge will have your full attention. They will have the time to prepare properly and to set aside a day (or more) to hear the case without the pressures of the normal court timetable with competing cases.
2. There is unlikely to be a delay in having the matter dealt with by way of private FDR. This in turn helps the parties focus on preparing for the FDR, narrowing down the issues to be resolved. Ahead of the FDR, each party’s lawyers will prepare and exchange a statement setting out their position on the issues. 
3. The process of private FDRs is more flexible, less adversarial and less formal, making it more likely a settlement can be reached.
4. There is a greater chance of reaching a settlement in a private FDR than in a court-based FDR. This can mean the difference between concluding the case in a matter of weeks – or months or even years if the case is litigated.

How should you prepare for private FDR?